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Written by Lall(1996)Presented by Jun, Yoo-Duk

IT Knowledge Creation Opportunities by Joint Collaboration

among APT Countries- Focused on Innovative Cluster

Policy in KoreaSQ 3.7

Rapporteur: Yooduk Jun(jyd@iita.re.kr)

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Content

• IntroductionIntroduction• Cluster and Technological RegimesCluster and Technological Regimes

• Study of Technological Innovation and Study of Technological Innovation and Clusters in the developing Countries Clusters in the developing Countries

• Case Analysis of Mobile Communication Case Analysis of Mobile Communication Clusters in KoreaClusters in Korea

• Conclusion and Policy ImplicationsConclusion and Policy Implications

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Introduction

• Since 1990s, the cluster-based policies for accelerating regional innovation and spreading developed technology have been experimented as successful strategies for nurturing and developing local industry and technology.

• Recently, Korean government has implemented various cluster-based policies to activate local economy. However, it seems likely to degrade the efficiency of the national innovation system which was promoted to chase the developed countries due to the problem that the cluster policies have been only focused on creating physical infrastructures such as attracting the associated companies or establishing research institutions or supporting organizations.

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Introduction of IT Cluster Policy

• Cluster Theory

– to foster the local industry

– to develop technology • Additional factors to affect innova

tive cluster

– Innovation pattern of developing countries

– Sectoral CharacteristicsICT Innovative

Cluster

ICT Innovative Cluster

Cluster theoryOECD(2001), Porter(1998),

Bok(2003)

Cluster theoryOECD(2001), Porter(1998),

Bok(2003)

SectoralCharacteristics

Breschi & Malerba(2000),

Malerba, 2002

SectoralCharacteristics

Breschi & Malerba(2000),

Malerba, 2002

Latecomer’s innovation pattern

Kim, L(1997), Song(2004)

Latecomer’s innovation pattern

Kim, L(1997), Song(2004)

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Cluster and Technological Regimes

• Innovative Cluster concept by OECD

Source : Compiled from Lee (2001)

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Cluster and Technological Regimes

• Sectoral innovation system & Technological Regimes

Source : Breschi (2000) Malerba (2002)

TR

TR

Opportunity

Appropriability

Cumulativeness

Knowledgebase

Source

Accessibility

Learning processOrga. capacity

Market feedback

Kn

owledg

e

Nature

InstitutionInstitution

AgentsAgents

Firms Non-Firms

Schumpeter petterns of innovationSchumpeter petterns of innovation

Geographicaldistribution

of innovators

Geographicaldistribution

of innovators

Knowledgespatial

boundaries

Knowledgespatial

boundaries

When the appropriability, opportunity and accumulativeness of technology are high, innovation leaders, especially industrial business groups, get together geographically, while they locate separately from each other when the same features are low, according to him.

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Study of Technological Innovation and Clusters in the developing Countries

Innovation ratio Process

innovation

Product innovation

Fluid Phase

(Variation)

Transitional Phase

(Selection)

Specific Phase

(Retention)

Time(reverse)

Acquisition

assimilationAcquisitionassimilation

UpgradeCreation UpgradeTechnology transfer

Technology transfer

Technology transfer

Utterback & Abernathy(1994)

Kim, L.(1997)

• Innovation Pattern of developing countries

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Assumptions

• The formation and evolution of clusters in Korea are assumed by means of the relationships of technology, the characteristics of technological changes

• The formation and evolution of clusters in the developing Korea are assumed to be established by means of national innovation system and its inherent technological innovation patterns.

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Case Analysis of Mobile Communication Clusters in Korea• R&D cluster for mobile communication

Source :  J -Y Choung(2002)

Evaluation of Research Output

Policy Suggestion

Annual Project Plan

PolicySupport

System Development &Commercialization

SupportTechnicalSupport

ResearchFund

Research FinancialSupport and

Manpower Dispatch Parts & Technology

Development

ResearchConsignment

Core Technology Offer

ResearchManpower

Cooperation

MIC

Mobile Telecomm-unication Carrier - SKT- Shinsegi Telecom (94.7.)

Institute of InformationTechnology Assessment (IITA)

Domesticjoint Development

Manufacturer- LGIC- Samsung- Hyundai - Maxson

Cooperation of ETRI Division

-Semiconductor Tech. Group-Switching Tech. Group-Information Tech. Group-Code Technology Department

Cooperation Researchwith Qualcomm(U.S.A.)

MobileTelecommunication

TechnologyResearch Lab.

(ETRI)

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Case Analysis of Mobile Communication Clusters in Korea

Samsung LG Pantech ETRI others

1992 1 2 1

1993 1 2 2 2

1994 0 2 1 2

1995 5 5 1 6

1996 10 5 1 2 7

1997 30 5 5 1 16

1998 26 3 0 26

1999 34 8 7 2 50

2000 14 21 6 9 62

Total 121 53 19 19 171

Source :  KIPO(1992~2000)

• Mobile phone patents

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Case Analysis of Mobile Communication Clusters in Korea• Regional Mobile industry production

Source :  KAIT(2003)

Region Mobile Phone production Ratio(%) Mobile system Production Ratio(%)

Seoul 3,101,595 14.2 308,972 12.5

Kyonggi 3,402,439 15.5 562,216 22.8

Incheon 30,874 0.1 92,807 3.8

Pusan 815 - 21,772 0.9

Taegu 2,813 - 788  

Kwangju - -    

Daejon 24 - 11,173 0.5

Ulsan - - 687  

Kangwon   -    

Chungbuk 1,258,113 5.7 30  

Chungnam 359,330 1.6    

Chonbuk - -    

Chonnam - -    

Kyungbuk 10,807,660 49.3 1,464,506 59.5

Kyungnam 2,947,726 13.5    

Cheju - -    

Total 21,911,389 100.0 2,462,951 100.0

(Unit: Million won)

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Case Analysis of Mobile Communication Clusters in Korea• Value Chains of Mobile Communication Clusters

Manufacturer(Brand)

Hardwareprovider

Softwareprovider

Developer

Test

IP

TelecommunicationService

Contents Service

•LCD•Memory•Battery•Modem chip•Camera Module

•Device controller: Memory, In/out•Modem controller•Middleware: WAP•OS: Brew, WIPI

Customer

Venture

Firms

Venture Firms

Operator, TTA, Firms

SKT, KTF, LGT

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Case Analysis of Mobile Communication Clusters in Korea

(Unit: No. of firm)

RegionManufacturer

(Brand)Developer Test Hardware Software

Contents and Service

Total

Seoul 2 36   49 17   93

Incheon       3     3

Kyonggi 3 10   13 1 1 28

Taegu   20   2     21

Kyungbuk 1 20         21

Kwangju   1     1   2

Daejon       5 2   7

Pusan       3     3

Chungnam   1         1

Ulsan   1   1     2

Cheju       1     1

Source :  KOITA(2003)

• Regional distribution of Mobile firms

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Case Analysis of Mobile Communication Clusters in Korea• Mobile Communication Cluster in Kumi Area

KyungbukNational

Univ.

Samsung Electronics

Hub FirmTechno

pole

IT CRC

V4 V5

V2 V3

V7

Venturefirm1

V6

ETRI

S4 S5

S2 S3

S7

SME1

S6

Spin-offs

R&D collaborati

on

CDMA

Development

partnership

R&D collaborati

on

R&D Collaboration

Joint Developme

nt

Components

suppliers

Kumi R&D center

SamsungSuwon R&D center

<International>IntelIBM

YeungnamUniv.

Gov.

Local Gov.

Incubating center

Embedded SoftwareR&D Collaboration

SDI, SEM

Core Components suppliers

(Display, Camera module, battery)

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Conclusion and Policy Implications

• Conclusions– Clusters evolve in compliance with the

technology and technological changes – The formation and evolution of clusters

in the developing Korea are established by means of national innovation system and its inherent technological innovation patterns

• Policy Implications– there comes a necessity to investigate

Korean style cluster model in terms of technology and technological changes rather than to follow the successful cases of the past