Technology transfer in bilateral program and lessons learned: The Case of Korea KEMCO, April, 2002 Seoul, Korea Dr. Suk-hoon Woo

Technology transfer or cooperation? n Technology is a good that can be transferred? –Globalization makes the technological competitiveness as a primary factor in world economy system. n Public funding replaces the direct subsidy of each countries’ national economic policy –more R&D expenditure, but the result of research is considered as national strategy factor.

3 n Network effect of technology –A combination of units of technology is “one system of technology. n Path dependency of investments already made. –Choice of one technology is not just a choice of one unit, but a choice of future system n ex) natural gas pipe-line network, electrification and grid network

4 n Transfer activities are multiple and complex –Joint research, FDI, joint-venture, consortium can be used as a implementation tools of technological cooperation. –Public program for demonstration project can be understood as a principal scheme for the technology transfer under UNFCCC n role of government and public sector

Criteria for needs assessment n Market potential : the technology near to commercialization (pre-commercialization stage, pre-standardization stage) n Public oriented technology n Trigger-effect to create a new markets with advanced technology n Technology includes “know-how” of soft technologies like energy management

Selected technologies n ESCO(Energy Service Company) and energy management system n Methane capture and reuse in waste land-fill site n Heat recovery, including heat-pump

ESCO Experiences n Process –Circulation of proposals for the national stake- holders (1999) - phase 1 –Selection of the ESCOs and potential projects n Hyundai Motor Ulsan Factory was selected for the demonstration projects –Co-auditing : Korean ESCO and US partner –Project identification

8 Hyundai Motors : site SempraEPS Korea KEMCONREL Korea side US Side Technology Transfer Scheme ProviderRecipient Energy auditing and ESCO MOU for TCAPP-Korea Technical support

9 n Barriers –Funding : who will pay for the initial survey? n Sempra, EPS Korea, Hyundai Motors, or KEMCO/NREL? –Technological system : the difference of regulation of environment related to the painting process (ex. Treatment of VOCs) –ESCO market structure : difference of auditing tools and system

10 n Limited success in Hyundai ESCO projects –success n Technology transfer throughout a experience of auditing n Detailed auditing report and project identification - heat recovery process in painting process –Failure n EPS Korea has been bankrupted - external cause n Difference of funding system for ESCO project –public funding (Korea) versus private funding (US) –Hedging for the exchange rate

Lessons learned n Technology transfer must be considered in the context of national strategy, including specific circumstances and development stages. n Experience matters : technology it-self is a kind of evolutionary process, not just a good. n History matters : path dependency, network effect must be considered.