1. Role of Science & Technology in Achieving Economic Development August 24, 2010 KC(Kil-Choo) Moon Korea Institute of Science & Technology (KIST)

2. EXPORT is Technology Export: $363 Billion 10,000 times in 50 years Export Day: Established in year 1964, Oct. 30. to celebrate $100 Million export Trade Day: Established in year 1987 to encourage export/technology

3. O History of Economic Growth O Current Scoreboard of R&D O History of S&T Growth O New Paradigm for S&T-driven Society Contents

4. 686.6 (10 th ) 27,168 ( 26 th ) 832.5 (15 th ) 49 (26 th ) Per Capita Income (US$) Trade Volume (US$, billion) GDP (US$, billion) Population (million) Profile of Korean Economy (2009) Main Industries (2008) ( ) : world rank Economic Scoreboard of Korea 99,600 (109 th ) Land (Km 2 ) DRAM Semiconductors (1 st ) TFT-LCD (1 st ) CDMA Mobile phones (2st) Ship-building (1st) Automobiles (4th) Steel & Iron (6th) Petrochemicals (5th) Textiles (2nd) ( ) : world rank

5. Major Economic Indicators -59711,787 25,012 2 2.2 80 -65 32 97 32,241 8 17.2 248 660 1,256 38,124 62 22.9 1,632 -4,384 17,214 21,598 42,869 253 15.2 5,900 -2,004 63,124 65,127 45,985 512 8.8 10,841 172,268 160,481 19601970198019902000 Population (1000) Population (1000) GDP (US$, Billion) GDP (US$, Billion) Growth Rate of GDP (%) Growth Rate of GDP (%) GNI per capita (US$) GNI per capita (US$) Trade Balance Trade Balance (US$, Million) (US$, Million) Exports (US$, Million) Exports (US$, Million) Imports (US$, Million) Imports (US$, Million) 40,449 48,747 832 0.3 19,830 363,534 323,085 2009

6. Change of Korean Top Ten Exports Natural Resources Light Industry Bristles Metal Prod. Rice Iron & Steel Products PlywoodTobacco Natural GraphiteFootwear Live Fish Fruits & Vegetable Cuttlefish Electronics Anthracite Iron Ore Raw Silk Wig Tungsten OrePlywood Iron Ore Textiles 19601970 Electrical Goods Fish Plywood Metal Products Synthetic Fibers Ships Footwear Iron & Steel Products Electronics Textiles 1980 10 9 8 7 6 5 4 3 2 1 Light industry + Heavy & Chemical industries

7. Change of Korean Top Ten Exports Heavy & Chemical industries + High-tech Industry Automobile Home Appliances Audio Textile Fabrics ComputerTextile Products Textile FabricsIron & Steel Products Wireless Telecommunication Equipment TV/VTR Ships Petrochemical Products Footwear Automobile SemiconductorComputers Textile Products Semiconductor 19902000 Textile Fabrics Textile Products Home Appliances Wireless Telecommunication Equipment Automobile Iron & Steel Products Petrochemical Products Semiconductor Machinery and precision instrument Ships 2009 10 9 8 7 6 5 4 3 2 1 High-tech Industry

8. Main Sources & Path of Economic Growth Labor: Natural resources 1960s 1970s Capital/Trade: Heavy & chemical industry 1980s Technology: High technology industry) 2000s Capital: Light industry 1990s Knowledge & Innovation: High-tech & knowledge industry)

9. Driving Force for Economic Growth Clear Goal Setting & Smart Strategy Clear Goal Setting & Smart Strategy - Market-driven & Export-oriented Economy - Primary Goal; Rapid industrialization - Strategy; Catching-up industrialized countries - Roadmap; Heavy reliance on foreign capitals & technologies * Open System, not Self-reliance Other Important Factors Other Important Factors - Government initiatives, and cultivation of private sectors - Mobilize human resources & resource development (HRD) - Drastic structural change in a short period - Rapid growth of high-tech industries

10. R&D contribution to Economic Growth(2000) The 1970 The 2000 Labor∙ Capital (82.4%) S&T (17.6%) Labor∙ Capital (54.9%) S&T (45.1%)

11. O History of Economic Growth O Current Scoreboard of R&D O History of S&T Growth O New Paradigm for S&T-driven Society Contents

12. 163,523(4th) Patent applications: Number of applications filed for residents and non-residents 294,440 (9th)Researchers (Full Time) 18,467 (10th)Number of SCI Papers $ 103,400 M(4th)High-tech exports 3.57 (5th) 29 : 71 $29.7 billion (7th) R&D Expenditure/GDP (%) Government vs. Private GERD (US$, Million) ( ) : world rank Research & Development Scoreboard Scientific/Technological Competitiveness : 5 th / 14 th (’11 IMD) source) IMD World Competitiveness Online, 2011

13. R/D Resources of Major Countries R&D ExpenditureRatio to GDP(%) Researchers (FTE) (million US dollar) based ‘1’ of Korea (person)per 1,000 labor force Korea29,70313.57244,0775.0 U.S.A.398,19413.42.771,412,6394.7 Japan168,1255.663.42682,7575.3 Germany96,4923.252.64301,2953.7 France57,7481.942.02215,7553.4 U.K.47,1381.591.77251,5734.1 Finland9,5160.324.0156,07010.5 China66,4302.241.541,592,4201.2 source) OECD, Main Science and Technology Indicators, 2010/1

14. China 1.50 2.00 2.50 3.00 3.50 U.K. KOREA France Germany U.S.A Japan Finland Average of OECD Total researcher per 1,000 total employment (FTE, persons) Ratio expenditure to GDP (%) source) OECD, Main Science and Technology Indicators, 2010/1 Korea’s Position of R/D Investment 4.00 4.50 1357911131517

15. Enterprise $ 26,961 M (71.1 %) Public Institution $5,558 M (14.65%) University $4,204M (11.08%) Enterprise $28,165M (77.26%) 26.19% 69.3% 4.5% 97.06% 1.76% 18.89% 18.87% 62.24% 1.18% Overseas $ 78 M (0.2 %) Flow of R/D Expenditure Government $ 10,889 M (28.7%)

16. Researchers by Sectors Public InstitutesUniversitiesPrivate Companies No.RatioNo.RatioNo.Ratio Engineering (67.4%) 12,37150.931,09935.1174,44167.4 Natural Science(12.9%) 4,3731813,34615.123,96811.4 Medical Science (5.3%) 1,5416.313,80515.61,8810.9 Agriculture, etc. (2.7%) 2,4199.94,0054.52,2891.1 TOTAL 20,70485.162,25570.3202,57996.3 Social Science & (6.6%) 3,07212.615,25117.22,9421.4 Liberal Arts (5.1%) 5422.211,04812.54,7822.3 TOTAL 3,61414.926.29929.77,7243.7 source) MEST, Survey of Research and Development in Korea, 2010, (unit : Headcount, %)

17. O History of Economic Growth O Current Scoreboard of R&D O History of S&T Growth O New Paradigm for S&T-driven Society Contents

18. 200520001990198019701963 1966 Major R/D Statistics *R&D / GNP 24 : 76 23,580 2.99 234,702 21 11,810 159,97370,50318,4345,628 25 : 75 13,849 2.39 20 7,110 4,676 19 : 81 1.87 16 843 428 64 : 36 0.77* 11 65 33 71 : 29 0.38* 2 - 4 97 : 3 0.25* 0 - GERD (US$, Million) R&D / GDP (%) Government vs. Private Public Institutions Corporate Institutions Researcher (Persons) 2010 29 : 71 29.7 3.57 244,077 27 21,785

19. 40 years History of R/D Expenditure source) OECD, Main Science and Technology Indicators, 2010/1

20. Establishment of Government-supported Research Institutes Policy Objective 1 st Economic Development Plan (1962-1966) 2 nd Economic Development Plan (1967-1971) S&T Infrastructure 3 rd Economic Development Plan (1972-1976) KIST(1966) MOST(1967) KAIS(1971) KRISS, KRICT, ETRI, KERI, KIMM, KAERI, KORDI, KIER, KIGAM Rapid industrialization Build Heavy & chemical industries

21. Construction Plan for POSCO (1969) Development Plan for Automobile Industry (1971) Basic Plan for Shipbuilding Industry (1972) Semiconductor Wafer (1974) LCD & Electronic Clock (1976) 4M/16M DRAM (ETRI) * ETRI spun off from KIST Electronic Telephone Exchanger (1974) TDX/CDMA (ETRI) * ETRI spun off from KIST CFC Manufacturing Process (1977) Early role of KIST & Leading Exports in 2000s - Construction Plan for POSCO (1969) - Development Plan for Automobile Industry (1971) - Basic Plan for Shipbuilding Industry (1972) - Semiconductor Wafer (1974) - Electronic Clock & TV (1976) * 4M/16M DRAM (ETRI) Steel & Iron AutomobilesShipbuilding - Electronic Telephone Exchanger (1974) - TDX (1979) CFC Manufacturing Process (1977) DRAM TFD LCD CDMA Petrochemicals

22. 1990199520002004 843 63,523 2,375 2,270 100,338 6,903 7,11010,270 Progress of Industrial R/D Activity 115,026 10,245 134,300 17,019 19851981 Corporate Research Institutes Researcher (Persons) R&D Expenditures (US$, Million) 183 34,614 751 65 13,167 121 2009 18,772 210,303 281,66

23. R/D Capacity of Private Sector R/D Centers in companies have increased 188 times in 27 years! 100(1982)  18,772(2009) Major companies rank at high position of R&D investment(2010) - Samsung Electronics: $ 9.41 Tr. KRW - LG Electronics : $ 2.48 Tr. KRW - Hyundai Motors : $ 1.28 Tr. KRW - LG Display : $ 1.12 Tr. KRW R&D investment of enterprises increased by 10 times since 1982 - ~ 2.7 trillion(1982)  ~ 28.2 trillion(2009)

24. SCI Papers by Korean Authors Year1996199920052009 SCI Papers, Korea6,42611,32423,04838,651 World Rank21161411 World Share(%)0.801.272.022.54 Proportion of paper cited more than one time (%) World (A)53.71%56.48%61.27%62.85% Korea (B)41.36%45.45%56.32%57.64% A - B12.35%11.03%4.95%5.21% source) NSI (National Science Indicators) DB

25. SCI Papers by Engineering Sectors By Korea World rank World Total World share Computer science 1,3597 (6)24,4545.56 Engineering 5,4555 (8)104,2475.23 Material science 3,4835 (4)56,9276.12 Chemistry 4,96910 (10)134,0773.71 Earth science 50020 (19)33,7561.48 Mathematics 77313 (11)33,9812.27 Physics 5,1319 (9)106,5724.81 Space science 31917 (17)13,5982.35 Biology 1,90010 (11)58,9943.22 Immunology 26117 (16)13,3061.96 Neuroscience 63915 (15)33,5381.91 Pharmacology 1,0948 (8)22,8754.78 source) NSI (National Science Indicators) DB ( ) : world ranking of the previous year

26. Pivotal Event in S/T during Economic Growth 1960s 1970s 1990s 2000s Events in Science & Technology KIST(1966) MOST(1967) KAIS(1971) Other GRIs(75~79) HAN-Project(1992) PCST(1991) NSTC(1999) Deputy Prime Minister for ST(2004) Economic Growth 1980s KIST Promotion Act(1966) S&T Promotion Act(1967) Technology Development Fostering Act(1972) Special Act for Science & Technology (1997) Basic Act on Science & Technology (2001) Basic Science Research Promotion Act (1989) Natural Resources Light Industries Heavy industries Chemical industries Heavy industries Electronics High-Tech Industries Labor Capital Trade Capital Technology National R/D Program(1982)

27. Pioneering Role of MOST in Korea Min. of Env. NRDP (‘92~) Min. of Health. NRDP (‘92~) Min. of Agr.& Forestry NRDP (‘94~) Min. of Cons.& Traffic NRDP (‘94~) Min. of Telecom NRDP (‘89~) Alt. Energy Tech.Program (MOCIE) (‘88~) Ind. Tech. Prog. (MOCIE) (‘87~) Min. of Education Basic Res. Prog. (‘83~) Nuclear Program (96~) Institution specific program (94~) GRI-initiated. program (90~93) SME technology transfer prog. (93~) Basic S&E research program (83~92) Basic S&E Promotion Prog. (93~) R&D Management Project (90~) Government Initiated Projects (82-89) HAN Projects (92~) R&D Globalization Program (96~) International Cooperative R&D program (85~95) R&D evaluation project (85~89) Creative Research Initiatives (97~) Strategic R&D Program (90~) Industrial R&D Partnership Program (82~89) Medium tech. Dev. Program (93) SME innovation program (85~86) Venture technology program (84) MOST NRDP (‘82~)

28. Distribution of Government R/D Budget (2008) (%) source) MEST / KISTEP

29. National System for S/T Administration Korea Institute of Industrial Technology Electronics & Telecommunications Research Institute Korea Food Research Institute Korea Institute of Machinery and Materials Korea Electrotechnology Research Institute Korea Research Institute of Chemical Technology … Korea Research Council for Industrial Science & Technology [14] Korea Institute of Science and Technology Korea Research Institute of Bioscience & Biotechnology Korea Basic Science Institute National Institute for Mathematical Sciences National Fusion Research Institute Korea Astronomy and Space Science Institute … Korea Research Council of Fundamental Science &Technology [13] Ministry-affiliated Organization [15] Ministry-affiliated Organization [2] Science & Technology Policy Institute Agency for Defense Development PCNSTO (Presidents Council of National Science & Technology Organizations) Total 46 Organizations

30. O History of Economic Growth O Current Scoreboard of R&D O History of S&T Growth O New Paradigm for S&T-driven Society Contents

31. Driving Force for Growth in S/T Clear Goal Setting & Smart Strategy - Fusion with Economic Development Plans - Primary Goal; ST as a tool for the “rapid industrialization” - Roadmap; Application-oriented production technology - Strategy; Active import of technology, and then localization * Implantation of western system Other Key Factors - Strong & consistent political leadership & public support - Early investment in infra building( i.e. “KIST”) - Bringing drained brains & their active role - Rapid increase in the R/D input (budget & infra-building) - Human resource development

32. Economic Growth Rate Real Growth Rate TFPLaborCapital ’75~’867.70.31.95.5 ’87~’977.71.51.94.3 ’98~’055.81.90.93.0 ’00~’054.52.20.12.2 ’75~’056.81.51.14.2 Ref: Samsung Institution, CEO Information561 호,”Rev. Korean Economic.2006. 8” Total Factor Productivity (TFP) TFP( 총요소생산성 ) : 생산에 투입되는 노동과 자본을 제외한 모든 요소를 포함하는 개념으로 과학, 기술 및 제도 등의 기여도.

33. Capacity to Implement Top 16 Applications RAND, The Global Technology Revolution 2020 - In Depth Analysis, 2006 1. Cheap solar energy 2. Rural wireless communications 3. Communication devices for ubiquitous 4. Genetically modified crops 5. Rapid bioassays 6. Filters and catalysts for water purification and decontamination 7. Targeted drug delivery 8. Cheap autonomous housing 9. Green manufacturing 10. RFID tagging of commercial products 11. Hybrid vehicles 12. Pervasive sensors 13. Tissue engineering 14. Improved diagnostic and surgical methods 15. Wearable computers 16. Quantum cryptography

34. O History of Economic Growth O Current Scoreboard of R&D O History of S&T Growth O New Paradigm for S&T-driven Society Contents

35. Intellectual Property (IP) becomes more important (2003. 7., Brookings Institute) OECD Countries : Technical innovation contributes 50% on GDP growth and 2/3 on productivity increase Knowledge-based Economy

36.  Educate & train world-class R&D manpower  Expand the base of fundamental technologies  Enhance regional R&D capabilities  Globalize R&D activities  Promote ventures and SMEs  Level up R&D facilities and equipments  Reform policy measures  Tie S&T sector with socio-economic sector  Expand R&D investment  Coordinate S&T policies among Ministries Current Issues in Science & Technology Policy

37. Past Catch-up mode Quantity of resources Manufacturing technologies R&D funding Cultivation of R&D actors Establishment of Institutions Government-led system Unbalance among sectors Centralized system Promotion of S&T Future Knowledge generation Quality of resources Fundamental technologies R&D infrastructure Networking of R&D actors Advance of Institutions Private sector-led system Balance among sectors Decentralized system Beyond S&T

38. S&T as a supporting element to economic growth S&T as a key driving force to economic progress and societal development S&T as an instrument (tool) to achieve other social objectives S&T as a social institution in life and social culture Korea should create new source of competitive edge in S&T in order to strengthen and improve the current potential. - fostering creativity, - improving comprehensiveness, - strengthening knowledge infrastructures, etc.