The Republic of Korea (South Korea) holds the number one spot in the recently released 2016 Bloomberg Innovation Index, which scores economies using factors including research and development (R&D) spending and concentration of high-tech public companies.
South Korea notched top scores worldwide for manufacturing value-added, as well as for tertiary efficiency - a measure that includes enrollment in higher education and the concentration of science and engineering graduates. It was ranked second for R&D intensity, high-tech density and patent activity, and ranked sixth for researcher concentration.
Over the past four decades South Korea has demonstrated incredible economic growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion-dollar club of world economies.
Who better to ask for recommendations on R&D policy direction for developing countries than Professor Heui Jae Pahk, President of the Office of Strategic R&D Planning in South Korea’s Ministry of Trade, Industry and Energy? In March, Professor Pahk delivered a seminar on this subject at the United Nations Industrial Development Organization (UNIDO) in Vienna.
Pahk, who has taken on the mission of leading the national R&D planning in the area of industrial technologies, began by stating that R&D is an integral driver for economic growth and industrial development in both developed and developing countries. In particular, he said, it is a key factor to enhance the technological competitiveness of developing countries and thus serves to help them escape from being trapped in a vicious cycle occupying the lowest value-added parts of global value chains – commonly referred to as the middle-income trap.
Pahk has been a professor of mechanical engineering at Seoul National University since 1993, and in 1998 he founded SNU Precision Co, a highly R&D-intensive company producing LCDs, OLEDs, photovoltaics and semiconductors. Based on his knowledge in engineering and his experience in the business world and with the formulation of the national R&D strategy, Pahk outlined developing countries’ current R&D capacity and highlighted the approaches that their policymakers need to consider in related policy formulation.
Noting that every country’s needs are different, Pahk nevertheless acknowledged that for least developed countries the priority is job creation, while low income countries need to diversify their economies. Moving up, he said, “Middle income countries need more sophisticated industries and skilled jobs, while upper middle income countries need technology-intensive industry.”
For all developing countries, he recommended a number of issues that should guide a successful R&D policy direction.
Firstly, he noted that the acquisition of experience and knowledge takes time and effort, insisting that these things cannot be bought or brought in at a later date. In the early stages, Pahk said, “Government-driven R&D is effective but, after the growth phase takes off, it is advisable to change to private sector-driven R&D.”
Successful innovation cannot happen in isolation, Pahk stressed, noting that it must be an open process involving cooperation at an early stage. This cooperation must be between academia, the government and the private sector at a local level, and ideally there will also be cooperation with more advanced countries.
A further step of great importance is, said Pahk, to always aim for the market. “Technology is of no use on its own. It is useless if it does not have a market.”
The final stages of a successful R&D policy are the need to advance into the global market and to ensure the maximum autonomy and creativity of the private sector.
During his concluding remarks, Pahk said that R&D is an important part of Korea’s Official Development Assistance (ODA) and gave some examples of Korean initiatives to develop innovative technology in developing countries.
Applauding Professor Pahk’s enthusiastic presentation, Ludovico Alcorta, Director of the UNIDO’s Department of Policy, Research and Statistics, remarked, “The Republic of Korea is a rare country that acknowledges the importance of ODA in the area of industrial technology. ODA helped Korea and now it wants to help other countries.”
Smeeta Fokeer, an industrial research officer at UNIDO, said that, for her, one of the important takeaways from the seminar was that “technology presents a number of opportunities and the need to steer this to the benefit of the country.” “However”, she added, “technology can not only help countries to climb up the value chain, but also presents a chance to push back some of the environmental limits with new technologies for radically increased resource productivity. All countries have a part to play, whether it is in adopting, adapting or developing such technologies.”
Reflecting on the seminar, Seung Chul Oh, a senior industrial development advisor at UNIDO, said, “Strong technological capability provides a variety of possibilities to ensure the realization of inclusive and sustainable industrialization in a country. However, in comparison to its strategic importance, it is observed that a systematic and coherent R&D strategy is non-existent or very weak in many developing countries and this could certainly be improved with UNIDO’s intervention.”