Photonics Cluster South Korea/Gwangju Jeong Hyop Lee (STEPI, S. Korea) 1

Short description of the case (1) Description of the domain and policy level – Agglomeration of photonics industry, research institutes, universities in and around Gwangju – Triggered by local strategic industry promotion program of the central government since late 1990s, which has served as a refuge for domestic photonics producers during the mid 2000s global photonics industry downturn Rapid growth – Sales: 110 billion KRW (1999) to 2,500 billion KRW (2010) – Employees: 1,900 (1999) to 8,000 (2010) – Companies: 47 (1999) to 360 (2010) 2

Short description of the case (1) Key players (+ leading actors) and international position – On the business side LED: Samsung LED, LG Innotek, Seoul Semiconductor, etc for domestic market Optical Communication: Samsung Fiberoptics, Taihan, LSIS, etc for global system companies like Lucent, Cisco, etc – On the research side: Gwangju Institute of Science & Technology (GIST), Korea Photonics Technology Institute (KOPTI), Gwangju Technopark (GT), Honam Leading Industry Office (Leading Industry Development for Economic Region), Korea Association for Photonics Industry Development (KAPID) – On the government side: Gwangju Metropolitan City, Honam Regional Development Committee, Ministry of Knowledge Economy 3

Short description of the case (2) What are the key challenges in the cluster/domain and the region in international perspective for improving the differentiation of the region in growth areas – Weak capacities in the emerging areas of optical lens, sensor, laser, etc, which also serve as a source of new fusion industry – Shrinkage of LED domestic market at the moment especially in the LED TV with uncertain domestic and international procurement market for green growth (reliability, price, etc) – Rapid catch-up of Chinese companies in the area of LED and optical communication parts and modules – Weak local linkages for next generation industry in the region and with global players 4

Short description of the case (2) Main competitive advantages in the domain / region for smart specialisation – Strong engineering capabilities which surpass the Chinese and almost equal to western countries with price competitiveness – General Purpose Technologies for next generation photonics industry are partially available through GIST – Diverse engineering extension networks such as product development, test, and pilot production with local universities, research institutes, etc 5

Ambitions and strategic actions in the case in the coming year (1) Plans for new strategy development and new internationalisation – Photonics 2020, New vision for photonics industrial development (2010) – Leading industry promotion ( ) – Three phases of local strategic industry promotion ( ) Methods and tools foreseen to implement the process of entrepreneurial discovery – Photonics 2020: creation of industry, universities, research institutes, government association – Leading industry promotion: technology development and industrial ecology cultivation through domestic and international networking, HRD, etc in Economic Region (Gwangju and two adjacent provinces) – Local strategic industry promotion first phase ( ): infrastructure and complex second phase ( ): promotion of LED, optical communication, etc third phase ( ): searching for next generation 6

Ambitions and strategic actions in the case in the coming year (2) Interaction between government and cluster organisations – Regional: fine-tuning of governing mechanism of local and economic region for intensifying current networks – National: support for nation-wide expansion of new photonics product development – International: strategic FDI inducement, global marketing, etc Cross-border activities and cooperation foreseen – Expansion of various research and marketing collaboration – Reach out to developing/less developed countries through benchmarking visits and ODA support (to set up LED lighting in the Mongolian villages) 7

Expected outcome/contribution of the case What do the stakeholders expect from the case study? – Global re-positioning of the local industry to mobilize global resources to develop next generation products What do regional/national policy makers expect from the case study? – Multi-scalar governing mechanism to coordinate various stakeholders and consensus development process What do you expect to learn in the project? – Searching for appropriate approaches and tools for practical solutions with local system diagnosis 8