OECD workshop on measuring the link between public procurement, R&D and innovation. "Impacts of...

Impacts of Korean innovative

procurement policies

2013. 12.

Dr. Woosung Lee

Research Fellow

Science and Technology Policy Institute

1

목 차

I. KEIT (2013) Performance Analysis Report

II. Report on the Korean Innovation Survey(2012)

III. Cases

2

목 차

I. KEIT (2013) Performance Analysis Report


III. Case

3

4

Case1: New Technology Purchasing Assurance

Overview

“In an effort to further commercialize new technologies, government agencies, public institutions including Defense Ministry, KEPCO (Korea Electric Power Corp.). KOGAS (Korea Gas Corporation), and Korea Railroad Corporation and private business commission SMEs to develop a new technology with the assurance that they will purchase the technological products. Under this program, the SMBA finances the technological development of SMEs, while public institutions purchase the products for a certain period of time.

Certification (NEP, NET etc.)

NTPA R&D grants

Public/Private Procurement

Targeting 10%

5

Case1: New Technology Purchasing Assurance

Trends: New Technology Purchase Assurance Program

Data Source: The Small & Medium Business Administration

(Note: Total numbers indicate accumulated figures)

Subsidy (100million, KRW) # of Purchasing Organizations # of Firms

Supported Total Public Organizations Large Firms

2002 9 1 1 0 13

2003 40 1 1 0 49

2004 40 8 8 0 40

2005 100 26 18 8 87

2006 160 45 25 20 154

2007 300 83 32 51 230

2008 400 127 36 91 254

2012 645

Purchasing Organizations

Data Source: Hong (2008), “Trend & Issues on SME Public Purchasing R&D Promotion”, KIET Industrial Economy Analysis

Participating Organizations (Purchasing Party)

Public Organizations (32)

National Organization

National Police Agency, Defense Department, National Emergency Management Agency, Defense Acquisition Program Administration, Korea Coast Guard, Korea Meteorological Administration, Ministry of Maritime Affairs and Fisheries

Local Government

Daejeon, Samcheok

Public Organization

Korea Coal Corporation, Korea Gas Corporation, Korea Airports Corporation, Korea South-East Power, Korea Southern Power, Korea Rural Corporation, Korea East·West Power, Korea Western Power, Korea National Oil Corporation, Korea Hydro & Nuclear Power, Korea Electric Power Corporation, Korea Minting and Security Printing Corporation, Korea Midland Power., Korea District Heating Corp., KORAIL, Korea Rail Network Authority, Environmental Management Corporation, Seoul National University of Technology, Korea Research Institute of Bioscience and Biotechnology, Korea Electrical Safety Corporation

Local Public Utility

Seoul Metro, Seoul Metropolitan Rapid Transit Corporation

Large Private Firms (Total 51)

Keumho Tire, Daewoo Electronics, Daewoo Shipbuilding & Marine Engineering Co., Ltd., LG Dacom Corporation, Doosan Engine Co., Ltd, Doosaninfracore, Samsung Electro-mechanics Co., Ltd., Samsung Electronics, Samsung Heavy Industries, Samchully Co., Ltd., Korea Delphi Automotive Systems Corporation, Hyosung Co., Ltd., KT, LG International Corp., LG Electronics, POSCO, SKC, STX Engine, STX Group, STX Shipbuiliding, Dae Dong Industrial, Dae Won Kang Up Co., Ltd., Dongwon Systems, Meister, Magna Chip Semiconductors, Samsung Fine Chemicals, Samsung Corning, Samsung Techwin, Saehan, Semes, Sebang, Secron, Shinheung, Amore-Pacific, Asiana IDT, IDS, Inkel, GMB Korea, Cuckoo Electronics, Clark Material Handling Asia, Hynix Semiconductors, Alcatel-Lucent Korea, Fuji Film Korea, Hanwha L&C, DK UIL, KT Networks, KTFT, LG Life Science, LG Innotek, LG Philips LCD, S&T Daewoo

Performance analysis scheme

7

Division Indicators of analysis Definition

Input R & D manpower Research manpower put into and related to technology development to perform tasks

Employee Company's total number of employees for performing tasks

Building the basis for technology developments Retention rate for research facilities and equipment as the default of infrastructure for research and development

Implementation

Planning Improvement of ability for the research and development planning due to task performance

Administration Systematic management for research achievements and the empowerment of intellectual property management due to task performance

Network The degree of contribution to Network Construction for joint research with other agencies due to task performance

Achievements creation Impact for the creation of research and development achievements

Exchange activities Information of research and development and the degree of human resources exchange activities

Promoting a joint research Intentions of a promotion for the future collaborative research

Quantitative

performance

Academic ability Presentations and papers published on the national and international professional journals related to the technology development for performing tasks

Patent The national and international patent application and registration related to the technology development for performing tasks

Other Intellectual Property Rights Application and registration of domestic and international utility model and design other than patents

Technical

performance

Technology gap The difference between the world best technology and the technology for task performance

Changes in technology level The difference between the world best level of technology and the level of technology developed through performing projects

Degree of the technology independence The degree of relative independence of technology developed through performing projects

Economic

performance

Sales amount Total sales due to technology or product developed through performing projects

Export amount Total exports due to technology or product developed through performing projects

Amount of import substitution The expected total amount of import substitution in the case of substitution with products developed through performing projects for existing import

goods

Reduce ratio of the production cost Reduction ratio of the production cost due to technology development through performing projects

Additional cost required to commercialization Additional costs putted into for realizing a commercialization and the public applying

Operating Profit Operating Profit of the product developed through performing projects

Number of new employees Number of new employment induced to produce product developed through performing projects

Contribution/

ramifications

Technical contributions The contribution of technology developed through performing projects

Contribution to total sales The contribution to the total sales of the technology or product developed through performing projects

Contribution to creation of new jobs The contribution of new employment due to technology or product developed through performing projects

Ability improvement of information gathering Improvement of ability for information gathering due to performing projects

Improvements of technology Improvement of technology due to performing projects

Product improvement The effect of product improvement due to performing projects

Process Improvement The effect of process improvement due to performing projects

Environment for research and development Improvement and enhancement of the environment for research and development due to performing projects

research manpower The ability improvement of research manpower due to performing projects

Company Image Improvement and enhancement of the company's public image and awareness due to performing projects

<Table> the configuration of analysis indicators

Target populations for analysis

8

<Table> distribution of population and respondents

Category

# of population # of respondent surveyed response rate

successful

project

failed

project total

successful

project

failed

project total

successful

project

failed

project total

All 395 33 428 283 15 298 71.6 45.5 69.6

Enterprise

public 139 11 150 96 6 102 69.1 54.5 68.0

private 229 20 249 165 8 173 72.1 40.0 69.5

overseas 27 2 29 22 1 23 81.5 50.0 79.3

Support year

2007 149 14 163 105 5 110 70.5 35.7 67.5

2008 148 12 160 98 8 106 66.2 66.7 66.3

2009 98 7 105 80 2 82 81.6 28.6 78.1

Technical field

Mechine·material 145 13 158 106 7 113 73.1 53.8 71.5

BioㆍHealth 15 1 16 12 1 13 80.0 100.0 81.3

Electricㆍelectronic 130 11 141 88 4 92 67.7 36.4 65.2

Information and

Communications 62 7 69 40 2 42 64.5 28.6 60.9

Information service 9 0 9 9 0 9 100.0 - 100.0

Chemistry 34 1 35 28 1 29 82.4 100.0 82.9

(Unit: number, %)


9

<Table> Technical steps

category Technical

development Introduction of

technology Technical

growth Technology

maturity Technical

decline n/a Total

total project # of project 21 68 134 59 9 7 298

Ratio (%) 7.1 22.8 45.0 19.8 3.0 2.4

successful

project

# of project 14 64 131 59 8 7 283

Ratio (%) 5.0 22.6 46.3 20.9 2.8 2.5

failed project # of project 7 4 3 0 1 0 15

Ratio (%) 46.7 26.7 20.0 0.0 6.7 0.0

(Unit: number, %)

Technical steps


10

<Table> Commercialization step (Unit: number, %)

category failed

commerciali

zation

progress of a commercialization end of a

commercialization

total complete

pro-type of

production

prototype

production purchase

planning

closing a

delivery

contract

entry

commercial

production line on sale

sale

suspension

total project # of project 42 19 35 30 23 14 122 13 298

ratio(%) 14.1 6.4 11.7 10.1 7.7 4.7 40.9 4.4

successful project # of project 33 18 33 29 23 14 121 12 283

ratio(%) 11.7 6.4 11.7 10.3 8.1 5.0 42.8 4.2

failed project # of project 9 1 2 1 0 0 1 1 15

ratio(%) 60.0 6.7 13.3 6.7 0.0 0.0 6.7 6.7

<Table> definition of commercialization step

commercialization step definition

failed commercialization stage 0 : give up commercialization due to internal and external factors

progress of commercialization

stage 1 : complete pro-type of production

stage 2: produce prototype production after a pilot

stage 3: purchase planning with purchase organization

stage 4: close a delivery contract with purchase organization

stage 5: entry commercial production line

successful commercialization stage 6: continues to sell the product or process in the current

stage 7: while selling the product or process is now aborted

Commercialization step

Increase of research

development planning

capability

Systematization of research

performance management Increase of IP

management capacity Contribution on cooperative

construction with other agencies

Total Projects 4.05 3.83 3.64 3.41

Projects succeeded 4.06 3.83 3.65 3.40

Projects failed 3.87 3.80 3.47 3.80

<Table> Degree of increases on Research project managing ability of new product development project

with purchasing condition

(Unit: point)

Analysis of Program Performance

Degree of effect on

creation of research

development

performance

Degree of research development

information exchange activities

Degree of research

development manpower

exchange activities

Inclination to promote

future joint research

Total Projects 3.44 3.35 3.25 3.48

Projects

succeeded 3.43 3.35 3.25 3.48

Projects failed 3.80 - - -

<Table> Effects of joint research project on new product development project with purchasing condition

(Unit: point)

Performance of Technology development

2007 2008 2009 Total # of projects

generated # of articles

generated # of article per 100 million

won(government support) Total 2 2 4 8 8 1.00 0.43

Project Field Public 0 1 0 1 1 1.00 0.59 Private 2 1 4 7 7 1.00 0.41 Foreign 0 0 0 0 0 - -

Phase of

Commercializati

on

Success 0 0 1 1 1 1.00 0.59 Progress 1 2 3 6 6 1.00 0.41 Failure 1 0 0 1 1 1.00 0.42

Technology

Field

Machinery·Material 0 0 3 3 3 1.00 0.40 BioㆍHealth 2 0 0 2 2 1.00 0.41

ElectricityㆍElectronics 0 0 0 0 0 - - Information&

Communications 0 0 0 0 0 - -

Knowledge service 0 1 0 1 1 1.00 0.59 Chemistry 0 1 1 2 2 1.00 0.43

Technology base 0 0 0 0 0 - -

<Table> Number of articles of new product development project with purchasing condition

(Unit: number)

(Unit: number)


Quantitative Performance

(Unit: number)


2007 2008 2009 Total # of projects

generated # of articles generated

# of article per 100 million

won (government support)

Patent Application 1 10 13 24 15 1.60 0.50

Registration 1 3 3 7 7 1.00 0.40

Utility model Application 0 0 0 0 0 - -

Registration 0 0 3 3 1 3.00 1.45

Design Application 0 0 5 5 1 5.00 1.23

Registration 0 0 1 1 1 1.00 0.48

Total 2 13 25 40 25 1.60 0.60

<Table> Performance of intellectual property right of new product development project with purchasing condition

(Unit: number)

Quantitative Performance

Number of projects Before the projects After the projects Improvement of technological gap

Total 283 4.27 2.73 1.54

2007 105 4.39 2.46 1.93

2008 98 4.26 3.15 1.11

2009 80 4.14 2.58 1.56

Commercialization-Success 133 4.70 2.83 1.87

Commercialization-Progress 117 4.00 2.80 1.20

Commercialization-Failure 33 3.52 2.09 1.42

Public 96 4.97 3.02 1.95

Private 165 3.87 2.58 1.28

Foreign 22 4.27 2.59 1.68

Machinery·Material 106 4.64 2.44 2.20

BioㆍHealth 12 2.83 2.50 0.33

ElectricityㆍElectronics 88 4.17 2.59 1.58

Information& Communications 40 3.28 2.85 0.43

Knowledge service 9 5.44 2.78 2.66

Chemistry 28 4.86 4.18 0.68

<Table> Performance of intellectual property right of new product development project

with purchasing condition

(Unit: number)


Technical Performance

Before the projects After the projects Degree of Increase

All 60.7 86.9 26.2

2007 57.8 87.0 29.2

2008 61.2 86.1 24.9

2009 63.8 87.8 24.0

Commercialization-Success 61.5 88.7 27.2

Commercialization-Progress 58.8 85.9 27.1

Commercialization-Failure 64.3 83.2 18.9

Public 60.2 87.9 27.7

Private 60.5 86.3 25.8

Foreign 64.4 87.1 22.7

Machinery·Material 59.4 88.1 28.7

BioㆍHealth 71.8 88.0 16.2

ElectricityㆍElectronics 59.5 87.3 27.8

Information& Communications 63.3 84.5 21.2

Knowledge service 58.8 81.6 22.8

Chemistry 61.4 85.9 24.5

<Table> Improvement of technology level of new product development project with purchasing condition

(Unit: %)



Before the projects After the projects Degree of Increase

Total 64.1 87.4 23.3

2007 61.5 87.4 25.9

2008 60.2 86.3 26.1

2009 62.7 88.9 26.2

Commercialization-Success 61.5 88.8 27.3

Commercialization-Progress 60.5 87.0 26.5

Commercialization-Failure 64.0 83.1 19.1

Public 62.5 88.6 26.1

Private 60.1 86.4 26.3

Foreign 66.4 90.0 23.6

Machinery·Material 58.4 87.8 29.4

BioㆍHealth 67.6 93.0 25.4

ElectricityㆍElectronics 63.3 87.4 24.1

Information& Communications 61.6 85.6 24.0

Knowledge service 67.2 87.2 20.0

Chemistry 61.9 86.4 24.5

<Table> change of technical self-reliance of new product development project with purchasing condition

(Unit: %)



<Figure> Comparison of sales (Unit: number, million won)

(a) Number of projects (b) sales per projects (c) sales per 100 million won (government support)


# of projects Avg. of Sales Total Sales of

projects Total government

support Sales per 100 million won

(government support)

Total projects 283 1,263.12 357,462.96 55,796.00 640.66

Projects generated 144 2,482.38 357,462.72 28,852.00 1,238.95

<Table> Sales

(Unit: number, million won)

Economic Performance

<Figure> Comparison of export amount


(a)Number of projects (b) Export amount per projects (c) Export amount per 100 million won (government support)


# of projects Avg. of export

amount per project Total export

amount Total government

support Export amount per 100 million

won(government support)

Total projects 283 181.27 51,300.00 55,796.00 91.94

Projects generated 43 1,193.02 51,299.86 8,605.00 596.16

<Table> Export amount (Unit: number, million won)


<Figure> Comparison of import substitution amount


(a) Number of projects (b) Import substitution amount per projects (c) Import substitution amount per 100million won

(government support)


# of projects Avg. of import substitution

amount per project Total import

substitution amount Total government

support Import substitution amount per 100million

won(government support)

Total projects 283 585.26 165,629.00 55,796.00 296.85

Projects generated 56 2,957.66 165,628.96 10,971.00 1,509.70

<Table> Import Substitution amount (Unit: number, million won)


<Figure> Comparison on percentage of production cost saving of developing product

(Unit: number, %)

(a) Number of projects (b) Percentage of production cost savings per project (c) Percentage of production cost saving

per 100million won government contributions


category # of projects Average

(%)

Total sum of Percentage of

production cost saving of the

pertinent project (%)

Total sum of the

contributions (million won)

Percentage of production cost saving per

100million won government

contributions (%)

Total projects 283 5.56 1,574.00 55,796.00 2.82

Pertinent

projects 90 17.49 1,574.00 16,630.00 9.46

<Table> percentage of production cost saving

(Unit: number, million won, %)


<Figure> Comparison on additional costs spending on commercialization


(a) Number of projects (b) Additional costs on commercialization per project (c) Additional costs per 100million won contributions


category Number of

projects Average

additional cost

Total sum of additional cost

spending on

commercialization of the pertinent project

Total sum of the


Additional cost per


contributions

Total projects 283 63.71 18,029.00 55,796.00 32.31

Pertinent projects 99 182.11 18,029.00 19,940.00 90.42

<Table> Additional costs spending on commercialization


Commercialization result

<Figure> Comparison on operating profit


(a) Number of projects (b) Operating profit per project (c) Operating profit per 100million won government contributions


category # of projects Average

operating profit

Total sum of

operating profit of the

pertinent project

Total sum of the


Operating profit per


contributions

Total projects 2,373 65.79 156,114.00 359,928.55 43.37

Pertinent projects 880 177.40 156,114.00 129,655.00 120.41

<Table> Operating profit



<Figure> Comparison on new employment

(Unit: number, person)

(a) Number of projects (b) New employment (c) New employment per 100million won government contributions


<Table> Operating profit

(Unit: number, mission won person)

category Number of

projects Average new

employment

Total number of

employees of the

pertinent project

Total sum of the


Employment per 100million won

government contributions

Total projects 283 0.80 226 55,796.00 0.41

Pertinent projects 92 2.46 226 18,998.00 1.19


<Figure> Comparison for the contribution


<Figure> Ramifications

<Figure> Research and Development Environment <Figure> Research manpower and images of purchase-

conditional new product development projects

Contribution and ramifications

<Figure> The factors of a participation in purchase-conditional projects for new product development


<Figure> The factors of a re-participation in purchase-conditional projects for new product development

Diagnosis

<Figure> The factors carried out successfully on purchase-conditional projects for new product development


<Figure> The difficulties factors of purchase-conditional projects for new product development

Diagnosis

<Figure> The difficulties on the production side of purchase-conditional projects for new product development


<Figure> The difficulties on the selling side of purchase-conditional projects for new product development

Diagnosis

<Table> Variables to analyze influencing factors upon the sales generated

Name of Variables Attribute or Unit

Dependent Variables Whether the sales are generated or not 0: yes, 1 : no

Total amount of sales generated 1,000,000 KRW

Independent

Variables

Inputs

Number of researchers in the R&D project Number Number of doctors in the R&D project Number Number of masters in the R&D project Number

Number of bachelors in the R&D project Number Number of other personnel in the R&D project Number

Research facilities and equipment retention rate before the R&D project Five point scale

Research facilities and equipment retention rate after the R&D project Five point scale

Spending in the R&D in 2011 1,000,000 KRW

Academic achievements

(theses and intellectual

property rights)

Number of foreign theses Number Number of local thesis Number

Number of registered patent application Number Number of registered utility model application Number

Number of registered design application Number

Technological achievements

Years of technology gap before the R&D project Number Narrowing years of technology gap after the R&D project Number

Current technology gap Five point scale Change in technology gap Five point scale

Technology independence before the R&D project Five point scale Technology independence after the R&D project Five point scale

Whether the technology is eco-friendly or not 0: no, 1: yes

Economic achievements

Amount of the export of developed products in 2011 1,000,000 KRW

Amount of the sales of products which substituted import in 2011 1,000,000 KRW

Percentage of reduction in product costs in 2011 % Additional expense for commercialization in 2011 1,000,000 KRW

Number of newly employed personnel for the R&D project in 2011 Number

Control Variables Technological sectors

Machinery and materials, bio technology and medicine, electronics

and electrics, information and communications, chemicals

The year when support was made 2007, 2008, and 2009

Empirical Analyses : logistic Regression

Introduction to the Analyses

<Table> Variables which influence the successful performance of innovative firms

Name of Variables Attribute or Unit

Dependent Variables Whether the performance of innovative firms is successful or not 0: not successful or not yet

delivered 1: successful

Independent

Variables

Ability to manage the R&D

Improvement in the ability to design the R&D Five point scale

Systematic management of R&D achievements Five point scale

Improvement in the capacity to manage intellectual property rights Five point scale

Contribution to the establishment of the shared network with other

organizations Five point scale

Level of contribution Level of technological contribution to the R&D project Five point scale

Level of contribution to the total sales Five point scale Level of contribution to the creation of jobs Five point scale

Ripple effects

Technological

improvement

Improvement in the ability to collect the information about advanced

technologies and market trends Five point scale

Securing core technologies Five point scale

Enhancement of the ability to improve existing products Five point scale

Enhancement of the ability to develop new products Five point scale

Enhancement of the ability to improve existing manufacturing

processes Five point scale

Enhancement of the ability to improve new manufacturing processes Five point scale

Shortening the period to develop technologies Five point scale

Research

environment and its

image

Improving research atmosphere Five point scale Increase in the investment in the R&D Five point scale Expansion of the group for the R&D Five point scale Equipment of facilities for the R&D Five point scale

Improvement of the status of R&D personnel Five point scale Increase in the number of R&D personnel Five point scale Enhancement of the capacity for the R&D Five point scale

Improvement in the image and awareness of the public Five point scale


Introduction to the Analyses

<Table> Relationship between the likelihood of the generation of the sales through the R&D project and inputs

Variables Regression

coefficient Standard error

Chi-squared

value P-value

Standardized

regression

coefficient

Intercept 0.240 0.613 0.15 0.70

Total number of researchers in the R&D project -0.013 0.010 1.75 0.19 -0.12

Number of doctors in the R&D project -0.189 0.137 1.90 0.17 -0.12

Number of masters in the R&D project 0.143 0.093 2.37 0.12 0.14

Number of bachelors in the R&D project -0.031 0.040 0.60 0.44 -0.06

Number of other personnel in the R&D project 0.184 0.083 4.95 0.03 0.23

Research facilities and equipment retention rate

before the R&D project -0.003 0.149 0.00 0.98 0.00


after the R&D project 0.171 0.132 1.69 0.19 0.10

Spending in the R&D in 2011 0.000 0.000 0.24 0.62 0.04


Result of the Overall Analyses

<Table> Relationship between the sales generated through the R&D project and inputs



Chi-squared

value P-value

Standardized

regression

coefficient Intercept 2400.964 5002.968 0.48 0.63 0.00

Total number of researchers in the R&D project 255.580 119.952 2.13 0.04 0.26 Number of doctors in the R&D project 192.967 1154.424 0.17 0.87 0.02 Number of masters in the R&D project -832.656 714.799 -1.16 0.25 -0.13

Number of bachelors in the R&D project -585.343 323.524 -1.81 0.07 -0.19 Number of other personnel in the R&D project 434.119 452.736 0.96 0.34 0.09 Research facilities and equipment retention rate

before the R&D project 1334.373 1234.934 1.08 0.28 0.11


after the R&D project 392.033 1159.579 0.34 0.74 0.03

Spending in the R&D in 2011 -1.145 1.456 -0.79 0.43 -0.08


<Table> Relationship between the likelihood of the generation of the sales through the

R&D project and academic achievements (theses and intellectual property rights)



Chi-squared

value P-value

Standardized

regression

coefficient Intercept 0.8944 0.4737 3.5655 0.059

Number of foreign theses -15.212 1368.200 0.00 0.99 -0.69 Number of local thesis -1.264 1.253 1.02 0.31 -0.08

Number of registered patent application 0.075 0.296 0.06 0.80 0.02

Number of registered utility model application -5.237 667.600 0.00 0.99 -0.50

Number of registered design application 0.000 . . . .


<Table> Relationship between the sales generated through the R&D project and academic achievements

(theses and intellectual property rights)


coefficient Standard error Chi-squared value P-value

Standardized regression

coefficient Intercept 4584.17494 3740.79434 1.23 0.2226 0

Number of foreign theses 0.000 . . . . Number of local thesis 417.114 13432.000 0.03 0.98 0.00

Number of registered patent application 171.094 1840.626 0.09 0.93 0.01

Number of registered utility model

application 0.000 . . . .

Number of registered design application 0.000 . . . .





coefficient Intercept -1.1927 0.9398 1.6108 0.2044

Years of technology gap before the R&D

project 0.011 0.051 0.05 0.83 0.02

Narrowing years of technology gap after the

R&D project -0.482 0.251 3.70 0.05 -0.21

Current technology gap in years -0.013 0.045 0.08 0.77 -0.03 Current technology level 0.659 0.307 4.63 0.03 0.23

Technology independence before the R&D

project 0.118 0.243 0.24 0.63 0.05

Technology independence after the R&D

project 0.159 0.299 0.28 0.59 0.06

Whether the technology is eco-friendly or not 0.169 0.308 0.30 0.58 0.04

<Table> Relationship between the likelihood of the generation of the sales through the R&D project and technological achievements


<Table> Relationship between the sales generated through the R&D project and technological achievements



Chi-squared

value P-value


coefficient Intercept 9561.882 8255.291 1.16 0.25 0.00

Years of technology gap before the R&D project -190.884 450.674 -0.42 0.67 -0.05 Narrowing years of technology gap after the R&D project 2693.892 2331.697 1.16 0.25 0.16

Current technology gap in years 25.073 388.244 0.06 0.95 0.01 Current technology level -1840.963 2620.563 -0.70 0.48 -0.08

Technology independence before the R&D project 1263.323 2021.160 0.63 0.53 0.08 Technology independence after the R&D project -1930.531 2618.960 -0.74 0.46 -0.09

Whether the technology is eco-friendly or not -391.607 2536.430 -0.15 0.88 -0.01


<Table> Relationship between the likelihood of the generation of the sales through the R&D project and economic achievements



Standardized

regression coefficient

Intercept -0.00919 0.5215 0.0003 0.9859

Amount of the export of developed products in 2011 0.003 0.001 6.13 0.01 1.19

Amount of the sales of products which substituted import in

2011 0.006 0.003 4.69 0.03 11.19

Percentage of reduction in product costs in 2011 0.028 0.013 4.81 0.03 0.22

Additional expense for commercialization in 2011 0.001 0.001 0.62 0.43 0.12

Number of newly employed personnel for the R&D project in

2011 0.050 0.081 0.39 0.53 0.06


<Table> Relationship between the sales generated through the R&D project and economic achievements




coefficient

Intercept 4901.988 3743.670 1.31 0.19 0.00

Amount of the export of developed products in

2011 0.770 1.113 0.69 0.49 0.07

Amount of the sales of products which substituted

import in 2011 0.213 0.249 0.86 0.39 0.08

Percentage of reduction in product costs in 2011 -15.207 77.026 -0.20 0.84 -0.02

Additional expense for commercialization in 2011 -2.101 4.532 -0.46 0.64 -0.04

Number of newly employed personnel for the R&D

project in 2011 -220.512 560.131 -0.39 0.69 -0.04



목 차

I. KIAT(2013) Performance Analysis Report


III. Case

35

<Figure> state of use government support system

(Unit: %)

Report on the Korean Innovation Survey(2012)

Manufacturing sector

Utilization status of government support system

Tax

exemption on

technology

development

Technology

development/Co

mmercialization

support

Participation in

governmental

R&D project

Governmental

technical support

and guidance

Providing

technical

information

Technical

manpower and

educational

research support

Gov./public

sector purchasing Marketing

support

Total 5.4 13.9 5.5 3.9 3.5 3.1 1.9 4.1 10. Food 2.9 10.1 3.6 3.3 1.7 2.7 0.6 4.5 11. Beverage 6.4 12.7 6.4 6.4 6.4 0.0 0.0 0.0 13. Textile 4.3 9.5 5.4 5.9 4.9 2.5 1.8 2.0 14.Clothes 1.0 2.2 2.5 0.6 1.9 1.6 1.2 1.6 15.Leather 0.0 3.2 3.2 3.2 0.0 0.0 0.0 0.0 16. Lumber 8.0 9.5 3.2 6.3 6.3 3.2 3.2 9.5 17. Wood pulp 3.8 6.2 0.0 0.9 0.9 0.6 0.6 1.5 18. Printing 0.0 0.0 0.0 0.0 0.0 1.7 0.0 0.0 19.Cokes 9.0 0.0 0.0 0.0 0.0 0.0 0.0 9.0 20.Chemical 12.9 19.8 8.4 4.5 3.9 4.6 3.9 7.0 21.Medicine 27.0 40.4 26.3 23.8 5.2 9.7 0.0 23.4 22.Rubber product 3.3 6.3 3.0 2.0 2.6 1.2 0.6 1.2 23. Non-metal 3.1 12.3 2.9 2.9 0.9 2.0 6.2 2.0 24. Primary metal 1.8 8.8 1.7 0.6 3.4 1.6 0.3 0.3 25.Metal processing 3.3. 15.8 2.1 3.3 2.8 1.4 1.3 2.3 26.Electronic 6.6 14.8 10.8 4.5 5.3 3.7 0.8 3.2 27.Medical 16.5 19.1 10.1 7.1 3.4 5.8 4.6 12.4 28.Electrical

equipment 6.6 21.1 8.7 3.9 3.4 3.5 2.3 6.3

29.Other machine 7.5 19.6 8.5 5.6 5.3 5.3 3.2 6.7 30.Wheels 4.5 19.0 5.9 3.4 3.1 2.6 0.2 2.3 31.Other

transportation 4.1 13.4 10.9 6.8 7.6 7.8 4.1 9.0

32.Furniture 5.4 11.8 3.1 2.4 2.4 3.4 4.7 7.8 33.Other products 3.4 10.8 4.3 4.4 4.4 6.4 0.0 3.2

<Table> utilization status of government support system: type of business (Unit: %)


Manufacturing sector Utilization status of government support system


<Table> utilization status of government support system: number of employees and legal forms of business

Category Tax exemption

on technology

development

Technology

development/

Commercializ

ation support

Participation in Gov. R&D proj

ect

Gov. technical

assistance and

guidance

Providing

technical

information

Technical

manpower and

educational

research

support

Gov./public

sector

purchasing

Market

ing

support

Total 5.4 13.9 5.5 3.9 3.5 3.1 1.9 4.1

Number

of

workers

10~49 4.7 13.4 4.3 3.4 3 2.7 1.8 3.9 50~99 7.4 15.1 9.1 5.6 4.9 3.9 2.6 3.8

100~299 10.6 17.3 14.7 7.9 7.5 5.7 2.1 5.8 300~499 18.9 22.7 24.4 5.4 6.3 9 4.1 17.1

Above 500 21.3 31.2 22.5 8.2 10.7 10.1 5 10.3

Legal

forms of

business

Large

company 20.9 27.5 21.9 7.5 9.8 10.4 5.4 14.8

Medium

company 9.9 17.2 10 6.3 5.4 5.2 2.5 5.4

Small

company 4 12.8 4.1 3.2 2.9 2.4 1.7 3.6

(Unit: %)





The Importance of Government support system

Tax exemption on

technology

development

Technology

development/Co

mmercialization

support

Participation in

governmental

R&D project

Governmental

technical support

and guidance

Providing

technical

information

Technical

manpower and

educational

research support

Gov./public

sector

purchasing

Marketing

support

Total 44.4 51.2 44.2 33.5 22.7 30.9 32.3 43.1 10. Food 73.4 47.4 30.6 8.0 7.7 23.0 100.0 32.7 11. Beverage 0.0 50.0 0.0 0.0 0.0 - - - 13. Textile 46.5 46.9 45.6 41.8 26.8 26.8 36.7 66.7 14.Clothes 0.0 72.1 25.0 0.0 33.3 61.3 50.0 61.3 15.Leather - 400.0 100.0 100.0 - - - 16. Lumber 50.0 33.3 0.0 50.0 50.0 0.0 0.0 66.7 17. Wood pulp 49.5 24.6 - 0.0 0.0 100.0 0.0 0.0 18. Printing - - - - - 0.0 - - 19.Cokes 0.0 - - - - - - 0.0 20.Chemical 44.1 61.2 71.0 86.4 16.6 42.7 16.6 38.7 21.Medicine 53.8 65.0 47.7 76.3 7.7 79.0 - 79.3 22.Rubber product 30.3 44.9 32.6 0.0 27.1 33.3 50.0 25.0 23. Non-metal 58.1 56.4 35.1 31.6 27.8 100.0 68.0 80.0 24. Primary metal 52.9 42.3 0.0 0.0 22.1 58.1 0.0 0.0

25.Metal processing 33.7 40.5 43.1 42.7 16.9 21.7 0.0 37.1

26.Electronic 51.3 48.6 50.6 15.8 19.8 38.4 29.5 45.7 27.Medical 39.9 50.6 37.1 47.5 75.0 35.4 44.7 36.8 28.Electrical

equipment 35.7 51.0 42.3 19.4 0.0 13.5 41.4 39.6

29.Other machine 44.6 62.1 46.0 31.8 16.5 25.3 9.8 48.0 30.Wheels 42.7 43.3 35.6 17.3 60.4 16.3 0.0 25.8 31.Other

transportation 45.2 83.2 71.8 27.4 35.2 23.7 90.4 24.9

32.Furniture 86.5 20.0 23.8 0.0 0.0 0.0 50.0 60.4 33.Other products 65.9 70.2 0.0 26.3 0.0 50.0 - 0.0

<Table> the importance of government support system(‘high’) : by business (Unit: %)




<Table> the importance of government support system(‘high’) : number of employees and legal forms of business

(Unit: %)

Category

Tax

exemption on

technology

development

Technology

development/ Commercializati

on support

Participation

in Gov. R&D

project

Gov. technical

assistance and

guidance

Providing

technical

information

Technical

manpower and

educational

research

support

Gov./public

sector

purchasing

Marketi

ng

support

Total 44.4 51.2 44.2 33.5 22.7 30.9 32.3 43.1

Number of

workers

10~49 43.9 41.6 43.9 32 24 31.9 35.5 44.2 50~99 45.9 48.4 41.1 43.6 9.5 22.4 16.7 34.9

100~299 47.8 48.1 47.1 28.7 29.8 32.1 28.4 45.7 300~499 33.7 52 58.1 46.2 15.5 38.6 15.7 32.9

Above 500 45.8 55 39.6 45.1 33.9 36.5 22.6 39.2

Legal forms of

business

Large

company 43.5 56.3 59.1 34.4 34.1 30.4 28.3 34.2

Medium

company 50.3 48.2 43.2 29.9 17.4 30.2 23.3 38.9

Small

company 40.4 41 43.7 35.5 24.9 31.4 35.9 45.3

<Figure> state of use government support system

(Unit: %)


Service Sector



<Table> utilization status of government support system: number of employees and legal forms of business


on technology

development

Technology

development/

Commercializ

ation support

Participation in Gov. R&D proj

ect

Gov. technical

assistance and

guidance

Providing

technical

information

Technical

manpower and

educational

research

support

Gov./public

sector

purchasing

Market

ing

support

Total 5.4 13.9 5.5 3.9 3.5 3.1 1.9 4.1

Number

of

workers

10~49 4.7 13.4 4.3 3.4 3 2.7 1.8 3.9 50~99 7.4 15.1 9.1 5.6 4.9 3.9 2.6 3.8

100~299 10.6 17.3 14.7 7.9 7.5 5.7 2.1 5.8 300~499 18.9 22.7 24.4 5.4 6.3 9 4.1 17.1

Above 500 21.3 31.2 22.5 8.2 10.7 10.1 5 10.3

Legal

forms of

business

Large

company 20.9 27.5 21.9 7.5 9.8 10.4 5.4 14.8

Medium

company 9.9 17.2 10 6.3 5.4 5.2 2.5 5.4

Small

company 4 12.8 4.1 3.2 2.9 2.4 1.7 3.6

(Unit: %)

Utilization status of government support system Service Sector

<Table> the use degree of the government support system: the size and legal forms of business (Unit: %)


Utilization status of government support system Service Sector

Category Tax exemption on

technology

development

Technology

development/ Commercialization

support

Participation

in Gov. R&D

project

Gov.

technical

assistance

and guidance

Providing

technical

information

Technical

manpower

and

educational

research

support

Gov./public

sector

purchasing

Marketing

support

Total 3.2 9.0 3.4 2.4 2.8 3.9 1.8 2.5

Number

of

workers

10~49 2.7 8.7 3.3 2.2 2.9 3.9 1.6 2.5

50~99 4.2 7.5 2.7 2.8 3.3 3.6 1.9 1.9

100~299 4.1 10.2 3.7 2.3 1.5 3.5 1.7 2.7

300~499 5.7 13.8 5.4 2.6 3.1 4.7 3.2 2.3

Above 500 4.2 10.4 7.9 4.3 4.9 6.4 4.2 5.1

Legal

forms of

business

Large

company 5.7 12.1 10.4 4.5 4.7 5.6 5.1 5.2

Medium

company 5.5 10.0 5.6 3.3 2.9 5.6 2.6 3.2

Small

company 2.5 8.7 2.7 2.1 2.7 3.3 1.5 2.1



<Table> The importance of government support system (‘high’) : type of business (Unit: %)

Service Sector

Category Tax exemption on

technology

development

Technology

development/Comm

ercialization support

Participation in Gov. R&D

project

Gov.

technical

assistance

and

guidance

Providing

technical

information

Technical

manpower

and

educational

research

support

Gov./public

sector

purchasing

Marketing

support

Total 34.7 43.5 43.3 19.5 21.3 32.3 27.7 37.5

Wholesale/Retail 36.2 24.1 57.1 27.2 27.4 33.0 42.3 48.6

Transportation 45.4 54.7 4.9 10.9 12.1 3.5 18.5 0.0

Lodging/Food 50.4 50.0 0.0 0.0 0.0 0.0 43.0 0.0

Publishing/Broadcasting 42.5 52.5 46.4 13.3 3.2 32.4 11.0 32.2

Financial/Insurance 12.9 23.6 14.1 16.6 16.9 37.3 19.4 23.6

Real estate/Leasing service 100.0 29.8 100.0 33.6 100.0 42.3 38.5 45.0

Science/technology 29.1 44.9 41.7 33.1 38.5 20.7 22.6 12.6

Facilities management 0.0 58.1 50.0 18.3 26.3 17.5 0.0 0.0

Education 40.0 26.5 50.7 17.2 11.7 59.4 35.0 49.8

Health/Welfare 19.3 46.7 24.6 3.9 18.9 23.1 5.2 30.5

Art/Leisure 0.0 100.0 65.2 - 0.0 69.9 100.0 100.0

Repair/Private - 58.0 100.0 100.0 66.7 81.6 - 100.0



<Table> the importance of government support system (‘high’): the size and legal forms of business

(Unit: %)

Service Sector


on technology

development

Technology

development/Comm

ercialization support

Participation in Gov. R&D project

Gov. technical

assistance and

guidance

Providing

technical

information

Technical

manpower

and

educational

research

support

Gov./public

sector

purchasing

Marketing

support

Total 34.7 43.5 43.3 19.5 21.3 32.3 27.7 37.5

Number of

workers

10~49 28.7 37.9 42.9 14.4 18.3 30.8 24.7 35.8

50~99 49.7 53.6 56.6 27.5 17.6 33.3 18.2 53.3

100~299 38.6 52.6 36.8 35.3 48.2 42.4 50.2 51.5

300~499 44.3 59.0 36.1 29.8 36.3 33.7 38.2 17.5

Above 500 31.8 69.7 51.5 29.5 34.1 33.9 31.5 23.7

Legal forms

of business

Large company 45.3 56.6 43.8 15.7 19.1 33.0 29.1 24.4

Medium

company 38.1 51.5 40.7 18.8 21.2 26.4 30.3 34.8

Small company 32.0 40.2 44.9 19.8 19.2 33.8 26.0 37.1

목 차

I. KIAT(2013) Performance Analysis Report


III. Case

46

Case - WooJin INC.

Foundation : 1980

Business sales : 4.4 billion won in 2007 and 11 billion dollars in 2010 This company has concentrated its energy on research and development field, and made research in domestic key industries

including the steel industry, semiconductor industry and nuclear industry since 1987 in which it set up the first measurement

technology laboratory. WooJin has made an investment in R & D field (research and development field) amounting to 5.8%

of the total sales since 2007. Its major technical field is measurement field and new material field.

1. measurement field

- development of TMS(Tele Meter System) data logger and monitoring software - development of device to measure thickness of slag for molten metal - development of digital measuring instrument for molten metal - development of NIMS ( NSSS (Nuclear Steam Supply System) Integrated Monitoring system. ) - development of a digital indicator of safety class for nuclear station. - development of digital M/A Station for nuclear station.

2. new material field

- development of high damping alloy (It is included in ferro-alloy and a new kind of alloy which can convert outside vibrational energy into thermal energy

through phase change of metal.) - development of high silicon cast iron with acid proof preventing various corrosion responses by making efficient oxide film.

option to purchase project As for WooJin, it can be a significant opportunity for growth to succeed in developing a measuring instrument

system used for nuclear reactor with Korea Hydro & Nuclear Power co., ltd. through research and development in

the long term in order to devise a new business plan during the foreign exchange crisis. In particular, with the

governmental technology development project with an option to purchase deciding buyer company in public in advance,

WooJin can succeed in developing a new measuring instrument in nuclear reactor field thanks to funding for research

and development. Moreover, Woojin is scheduled to make progress in development of technology through strategic

partnership with POSCO.

Company outline

Case - SeHwa Electronics

Foundation : established in 1987 and started an LCD Window department in 2000 SeHwa Electronics has dealt with an order of 'development of touch window using four wire resistance' from LG

Electronics for 12 months (from December 2007 to November 2008). Through this process, it was provided support

fund of 247 million won from the government. Before this task was completed, touch window using resistance

method used for mobile cellular phone from LG Electronics had to be entirely imported from foreign countries and

lagged behind developed countries like Japan in producing technology by more than 5 years.

Option to purchase project SeHwa Electronics to develop new touch window products used for

mobile cellular phone that would apply and combine touch screen basic technology, making integrate flat window

and touch screen with LG Electronics. In the process, a variety of core processes were utilized : technology to design

electrode pattern, to etch metallic oxide dealt with ITO deposition and to print high detailed patterns.

In addition, the company had to materialize simpler product structure by combining adhesive tape bonding technology,

UV printing and bonding technology, CNC detailed-operating technology.

Through this project, LG Electronics could reduce costs by using domestic parts and jumped to the same level of quality

and productivity of industrialized countries, as a result of which the major company had competitive price and quality

compared to developed countries. SeHwa Electronics also turned over 34.4 billion won for four years (from 2008 to 2011)

and secured technology with the same product. Moreover, this company added a new production line and brought about 100

new jobs.

Company outline

End of Document

Dr. Woosung Lee

Research Fellow

Economic Analysis Division

Science and Technology Policy Institute

82-2-3284-1781

[email protected]

49

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