The global competitiveness of South Korea: the role of government-funded research institutes

Abstract

We analyse the components of South Korea's world competitiveness, the driving forces of its impressive growth until 2008 and the reasons for its decline in 2009. We discuss the evolution of South Korea's national innovation system (NIS), and conclude that it was functioning well for large companies and the chaebol conglomerates, but not for SMEs. We discuss the new role of Korean Government-Funded Research Institutes (GRIs) and their contributions to technological development, presenting the case study of successful technology transfer from the Korea Institute of Machinery and Materials to two entrepreneurial SMEs. We conclude that, after the present economic crisis, Korean industry will evolve from the chaebols, an obsolescent corporate organisation, to a more balanced structure of entrepreneurial SMEs and mature multinationals. We propose a new mission for the Korean GRIs, namely a proactive technological search, selection, transfer and implementation assistance to SMEs and the creation of independent liaison offices in parallel with the strengthening of the existing technology licensing offices.