Development of innovation cluster in Mongolia for ICT sector

/role of High education system/

N.Munkhuu*, B.Tsetsgee*, T.Narantuya†

* SICT MUST, Ulaanbaatar, Mongolia † CSMS MUST, Ulaanbaatar, Mongolia

* munkhuu@sict.edu.mn † tsetsgee@sict.edu.mn

Abstract: This paper examines the role of regional clusters in

regional entrepreneurship. We focus on the distinct influences

on growth in the number of start-up firms as well as in

employment in these new firms in a given region-industry.

Mongolian government has approved several policy documents

to enhance national capacity building. Within the framework of

these policy documents, some efforts have been made at initial

level from creating legal environment for science and

technology oriented activities. The National Development

Policy and Action plan of Government of Mongolia specified implementation of different large scale projects, such as high-

tech innovation cluster for ICT (Silicon Valley) and other

sector, launching of national industry, improving capacities of

human resources, which can be implemented together and in

cooperation with different organizations. Concept of developing

innovation cluster in Mongolia aimed to build a knowledge

driven society to enhance living standards of Mongolian people.

I. INTRODUCTION

Mongolia has determined an objective to introduce

an innovation in all the social and economic sectors

widely, to promote high-technology industries and to

create acknowledge-based economy, and developed

several policy documents including “Millennium

Development Goals-based Comprehensive National

Development Policy in 2008-2021”, “State Policy on high

technology industries, in 2010”, “State Policy on

information, communication and technology (ICT)”

/proposal/, “Master plan to develop science and

technology of Mongolia between 2007-2010” and

“Program to develop National innovation system in

Mongolia between 2008-2015”, “Law about of

innovation”, . In these documents it is reflected that …..to

support high technology products and industries, which

are made as a result of studies and innovation and to

develop high technology industries as a Science and

Technology Park and cluster.

There are some start-up operations to create a legal

environment for science and technology actions and to

develop their management and organizations but an issue

to involve results of research works in economic cycle, to

have a optimal mechanism, to regulate relations between

parties – subjects of science, state and business and to

strengthen their collaboration, has not solved yet.

It is very important for information and

communication sector to intensify its development, to

strengthen its position in society and economy and to

increase its contribution to the country through

harmonizing activities of universities, institutes, research

organizations, National Information Technology Park,

small and medium sized enterprises and companies, which

have an effective cooperation and good introduction of

innovation.

Therefore according to the initiative of the

Information, Communications Technology and Post

Authority (ICTPA), the research works to make a model

for developing a high technology of information and

communications based on a partnership of the state,

universities, institutes and private sector, are started.

So, we prepared paper in purpose to define the role

of higher education institutions for establishing ICT

cluster.

II. DEVELOPMENT PROSPECTS OF

MONGOLIAN INFORMATION AND COMMUNICATIONS SECTOR

Mongolian telecommunications and information

sector will increase by its percentage of GDP, service

revenue and investment scenario and it will be a key

factor in economic development.(Table №1)

TABLE I. MONGOLIAN INFORMATION AND COMMUNICATIONS SECTOR

INDICATORS, BY YEARS

Indicator 2010 2011

Percentage of GDP 2,9 2,6

Total revenue from services,

billion.tug. 470,9 538,9

Investment for sevices,

billion.tug 89,9 107,7

Gross income in state budget,

billion.tug. 81,9 96,5

Total service revenue of Information and

Communications sector reached 538.9 billion tugrugs,

69.3% of which comprised of mobile communications

service, 6.8% - content service, 6.4% - internet service,

4.4%- network service, 4.0%- television broadcasting

service, 3.5%- fixed telephone communications service,

2.4%- cable television service, 2.0%- postal service,1.2%

- international call service.

By the end 2011, 736 licences were issued for

carrying out 29 differents types of 11 categories of

telecommunication operations, 464 special licences for

radio frequency use, 736 owners certificate in the

Mongolian Telecommunications sector.

From 2011, digital content service and its

regulation has been organized intensively by governing

organizations of Mongolian information and

communications.

Mobile and Fixed communication services. There are 4 major telecom carriers and they are

providing mobile services for 95% of total population, in

350 regional areas and towns. The number of mobile

service subscribers reached 2.9 million by the end of

2011. This leads to mobile service subscribers density of

103.8 per 100 subscribers which exceeds the world

average by 19 units.

Third generation technology or 3G technology has

been implemented in mobile communications services

since 2009. As of the end of 2011, it is providing mobile

communications services to 28282 subscribers of

Ulaanbaatar city and 23 province centers. Number of

subscribers has increased by 84.5 % compared to the last

year.

The number of fixed telephone communications

carriers service subscribers reached 143856 at the end of

2011 and wireless fixed telephone communications

carriers service subscribers are 43705.

Internet service

Internet service has been playing an important role for

recent economic and social development, since it began

in Mongolia in 1995. The number of internet service

subscribers has drastically increased due to the open and

free competition in the internet service market, and

implementing 3G technology for mobile communications

carriers. By the end of 2011, 85 special internet service

licenses were issued and the number of internet service

subscribers reached 457642 increasing by 1.3 times

compared to 2009.

Population and housing Census of Mongolia conducted

by National statistical Office states that 30.6% of

population aged 6 and over use the internet.

Companies with special licenses , such as state–owned

Information Communications network company,

Mobicom corporation, Gemnet company, Railcom

business service center and Sky networks company,

provided Information and Communications network

services in 2011. These internet service carriers access

the Trans telecom, Russia connection and China telecom,

China Unicom, China gateway. Total length of optic fiber

transmission network of these network service carriers is

16838.8 km.

TV and radio multi-channel broadcasting services As of the end of 2011, 82 entities and individuals

have TV and radio multi-channel service licenses.They

use satellites, remote and earth stations for broadcasting

services. Government of Mongolia has approved the

National Programme to implement full digital terrestrial

broadcasting of television programs. The shift to digital

technology would be accomplished by July 2014.

47.35% of cable TV subscribers are located mainly

in Ulaanbaatar, 14.23% of them are in the remote areas

and 38.4% receive the satellite TV broadcast. 52.6% of

TV broadcasting subscribers receives digital technology

services and 47.4% of them receive analog technology

services. 40.55% of TV broadcasting subscribers use

cable TV services, 18.56% - mmdS multi-channel service

via the multi-terminal system, 38.0%- satellite antennas,

2.49%-internet protocol /IPTV/.

In telecommunication sector, high-speed

bandwidth capacity of data transmission is on focus for

the development of services of next generation

technology.

For half-year 2012, there are a total of 7800

employees working in the Mongolian Information and

Telecommunications sector, over 380 of which are

professors and researchers,123 of them are scientists

/Sc.D - 8/. It is obvious from this that there is not

sufficient competitive human resource in the information

and telecommunications sector. For the past 5 years, 7100

students in total graduated from the 44 universities. It is

clearly seen from the human resource market research

that Information and Communications sector affects the

development of the various sectors in different ways.

We face the increasing trend to show the value in

competitive scientific research to produce high-

technology products in Information and Communication

sector.

III. HIGH-TECH INNOVATION CLUSTER FOR ICT

Cluster development strategies have been implemented in technology transmitting centers, science and technology parks including business and technology incubators, clusters, techno-polis, science and technology towns and regions.

Information Communications Technology and Post Authority /ICTPA/ and National Development and Innovation Committee /NDIC/ are planning to implement the cluster “Government-Universities/Science organizations-Manufacturers” (Table 1)

For the future development of HTIC in ICT, software and electronics, it is willingly to choose the further research study, based on global ICT market, technology development tendency and domestic resources.

TABLE II. FUTURE TENDENCY OF HTIC ADVANCED TECHNOLOGY

Software

� System development, software engineering

� Cloud calculating,

� Internet, Mobile communication development technology

Electronics

� Developing special purpose integral scheme

� Micro-electro-mechanic system,(mems) and sensor � Manufacturing solar generator battery

Telecommunication

� Types of satellite services, band planning

The survey team realized there is an urgent need to

establish Science and Technology Park in Mongolia in the earliest stage of HTIC development. Structure of Science and Technology Park, which has 4 sections and objectives of each sections, their course of actions, required facilities and internal management of each sections are determined accurately by the survey team. Also, the investment estimation has been done successfully.

1) Report of survey, ordered by Information

Communications Technology and Post Authority and

National Development and Innovation Committee,

provides 3 stages of implementation and development of

HTIC. Also, project implementation plan of HTIC has

been developed.

TABLE III. STAGES OF CLUSTER DEVELOPMENT

Preparetion stage: 2012- 2014 GOAL: To ensure HTIC, ICT preparation Plan &infrastructure: To develop a feasibility study, Master plan,

Business plan and a drawing of STP infrastructure and construction, To develop a plan to prepare human resource Activities:

� To intensify cooperation between university and private

sector

� To develop a policy to learn new technologies

� To improve quality of universities � To strengthen capacity of small and medium-sized industries

� To prepare professionals

� To determine detailed topics of high technology research

� To involve attendance of U and SO at the NITP

� to establish pre-incubators

� to support private R&D

� to support innovation 1st stage: 2015- 2017

GOAL: To build a infrastructure and construction of STP Plan &infrastructure: To build an infrastructure and construction of

STP , To develop a program to attract specialist Activities:

� STP construction � To set up a temporary commission of cluster and assignment

of management structure

� To prepare cluster human resource

� To involve attendance of U and So at the NITP

� Research on raw materials used for industries

� To strengthen small and medium sized industries

� To prepare professionals

� To establish cluster fund and harmonize activities

� To develop a network of professionals � To support operations of pre-incubators

� To support private R&D

� To support

� innovation

� To attract foreign high technology companies

� To have entrepreneur arts

2nd stage: 2018-2020 GOAL: To operate activities of STP

Activities:

� To establish cluster fund and harmonize activities

� To develop a network of professionals

� To conduct operations of pre-incubators

� To implement a project at R&D center

� To conduct trainings

� To conduct market research and evaluation

� Patent and license service

� To support cooperation between participating parties � To grow up entrepreneurs

� To invent a new technology

� To prepare human resource

� To develop cluster management

� To grow up a start-up

� To attract foreign high technology companies

� To implement a joint project 3rd stage: 2021-

GOAL: To smooth activities of HTIC Activities:

� To establish cluster fund and harmonize activities

� To develop a network of professionals

� To establish high technology manufacture

� Venture company activities

� To attract foreign high technology companies

� To implement a joint project

The research has been done on the management of

activities and cluster responsibilities of the parties

concerned in different stages of cluster development.

HTIC and high-tech industrial development is the

main source of producing value-added products. High

education institutes are considered an important source of

developing HTIC and they play a big role in HTIC

development. We have reviewed the role of higher

education and research institutions.

IV. ROLE OF HIGHER EDUCATION

INSTITUTIONS IN HTIC DEVELOPMENT

The documentation of European Federation Commission, “Role of higher education institutions in European knowledge world” discussed within science and higher education institutions says:

The most important 4 elements that provide knowledge driven society and knowledge economy are the following: (i) to build knowledge driven from the major scientific research studies, (ii) to offer good education based on scientific knowledge, (iii) to distribute knowledge in society using ICT technology, (iv) to implement, innovation and new technology, to apply newly obtained knowledge in manufacturing the products as soon as possible. It emphases the role of higher education institutions in flexible interconnection of these 4 elements. In developed countries, different projects have been developed and implemented to support higher education institutions.

TABLE IV. STAGES OF CLUSTER DEVELOPMENT AND ROLE OF HIGHER EDUCATION

AND RESEARCH INSTITUTIONS IN DEVELOPING HTIC

Stages of cluster

development Role of high education institutes

Stage 1

-To develop

To elaborate long-term projects in

developing state innovation policy, strategy,

infrastructure and

ICT architecture,

- To create legal

environment for

science and

technology oriented

activities and

investment -To provide

training and

consulting services

science and technology.

to build a knowledge driven society to

enhance living standards of Mongolian

people

To develop spirit of innovation and innovation system in society by

disseminating and advertizing science,

technology and the innovation knowledge.

To start business incubation activities, to

write business plan

To change the syllabus of bachelor, master

and doctoral education in engineering and

business (to develop Entrepreneur trendy

syllabus of HTIC sector )

To enable the teachers and students to work as a team, to allow students to choose the

adequate topics of self-assessment work,

course work and diploma thesis that suit their

their own needs and interests

To have the certain policy to receive minimal training in high-technology

To set out an educational foundation for

student researchers,

To establish and promote fair and open

research paper competition

Stage 2. Technology

business incubator,

research and

development work, innovation,

program,

technology

transmission,

development of

funding system,

cluster system,

To develop

Entrepreneurs

To take initiative for technology

transmission

To expand the cooperation between higher

education institutions, science and research organizations and private sectors.

To release new technology, to provide

required technology transmission, to prepare

human resources

To improve quality of training of higher

education institutions

To contribute to the development of external

and internal integration of National

innovation system.

To prepare research work and training

resources within innovation technology

management and national innovation system,

scientific knowledge and information

distribution

To establish technology and business

incubators in higher education institutions, to

measures promoting entrepreneurship

To establish productive scientific and

research team, to corporate effectively in

science-education-business field, to develop

cooperation in innovation, to promote

partnership.

To do business assessment and to determine

growth strategies of business and

possibilities of coming on a global market

To establish start-up companies by the higher

education institutions and scientific and

research organizations

To apply available resources and

opportunities in innovation program

Stage 3. High-tech

To do the basic and applied research , to

implement research results, circulation of

manufacturing,

start-up companies,

venture companies,

to attract foreign

companies, to

establish branch

offices

economic activities

To prepare engineering and innovation

human resource

To choose Entrepreneurs, managers who will

work in research and development sector, to

do technology research, to train specialists

who will implement innovation projects and negotiate science and technology contracts,

and to train managers who will work in

venture investment foundations, companies

and techno-parks, technology and business

incubators, to distribute science and

technology knowledge and information

CONCLUSION

Working outcomes of government, higher education institutions, scientific and research organizations, private sectors and manufacturing is not sufficient enough to develop science and technology, knowledge-based economy and technology-based manufacturing. It is possible to improve it by using innovation cluster and principles of cooperation. It enables us to pull out of technology backwardness and produce value-added products that are able to compete in the global market.

Cluster development, its stability and independence starts as big companies with high technology comes into the market of that country. The main factor to attract foreign investment and high technology is high skilled human resource, continuous training of specialists and higher education institutions and science and research organizations that are able to do high-level research.

Developing the cluster based on own internal resource is considered as the most cost and time effective version at present. There is also a real opportunity to develop manufacturing technology park relying on natural resource.

Research activities of higher education institutions and science and research organizations should be supported by the government policy. It will play an important role in developing companies with modern technology and in establishing human resource as well as in developing knowledge economy based on human resource.

REFERENCES

[1] Report of Pre-feasibility Study to Establish High-Technology

Innovation Cluster of Information and Communications Technology, Mongolia, ICPTA, 2011.

[2] Statistical yearbook 2012, Mongolia, 2012.

[3] Role of higher education institutions in European knowledge world, UNESKO, 2010

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[5] Bergek, A., Jacobsson, S., Carlsson, B., Lindmarki, S., Rickne, A., 2005. Analysing the dynamics and functionality of sectoral innovation systems – a manual. In: 10 Year Anniversary DRUID Summer Conference, Copenhagen, June 27–29.

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