University-Industry Collaboration Policy in Korea: Public policy implementation and implication,
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1 University-Industry Collaboration Policy in Korea: Public policy implementation and implication, Mun Su Park (Research Professor, Dept. of Technology & Society, University of SUNY Korea, the State University of New York) Tae-Sik Park (Researcher, National Research Foundation of Korea) Seung Ouk Jeong (Senior Staff Researcher, POSCO Liaison Center at POSTECH) BIOGRAPHY Mun Su Park is currently a research professor at Department of Technology & Society, State University of New York Korea. He received Ph.D in public administration from Sung Kyun Kwan University. He was previously a research assistant professor at the Industrial Collaboration Research Institute, Pohang University of Science and Technology, Pohang, Republic of Korea. Tae-Sik Park is Researcher at National Research Foundation of Korea(NRF). Seung Ouk Jeong is Senior Staff Researcher at POSCO Liaison Center, Pohang University of Science and Technology, Pohang, Republic of Korea. He earned a Master in Public Administration from Sawyer Business School at Suffolk University and Master of City Planning from Boston University. He previous worked in various positions and projects in an engineering firm and KT Consortium. Abstract This article examines university-industry relations which has purpose of reviewing the policy implementations in Korea since We aim to reflect a university-industry policy implementation and consider a policy implication to enhance the contributions of university-based research to innovation and economic performance. This study evaluates national university-industry collaboration policy during the past decade in Korea by focusing on the future policy implications. The concept of university-industry collaboration is varied and become an important policy field in the national and regional innovation system. University-industry relation appears to be the most significant contribution and benefit to economic development and social innovation through scientific knowledge and technology and the national university-industry policy develop and motivate through collaboration of university-industry. Universities respond to demand of firms, and they perform various collaborative activities including research and development (R&D) and education under regulation and support of public policy. In 1
2 Korean, the current public policy perspective tends to tighten university-industry link in science and technology policy at nation s innovation system. More recently, policy aims to expand university-industry collaboration in regional innovation system. We argue that the complete revision of Industrial Education Promotion Act in 2003 is significantly important in history of university-industry collaboration, In this article, we evaluate the policy formation and implementation in regards of related legislations for last 10 years. Reflecting on policy implementation during the last decade, in the future universityindustry policy would expand and invigorate the present level of collaboration though national and regional policy. Keywords: University-industry collaboration policy, Law of Industrial Education and Industry-University cooperation, national innovation system, open innovation and business ecosystem Ⅰ. Introduction This article examines university-industry relations to review the policy formulation, implementation and assessment in regard of Korean university-industry collaboration policy since We aim to reflect a university-industry policy implementation and consider a policy implication to enhance the contributions of university-based research to innovation and economic performance. The introduction of open innovation system is an important social experiment, and is highly related to economic development. University-industry relation appears to be the most significant contribution and benefit to economic development and social innovation through scientific knowledge transfer and technology commercialization. Thus, the national university-industry policy attempts to promote university-industry linkages by using the various policy instruments and developing the numerous initiatives. Cohen, Nelson & Walsh (2002) emphasize the significance of industrial differences in the relation between university and industrial innovation. George, Shaker & Robely (2002) Wood argue that industry-university cooperation may not directly influence the firm s success in innovation but it can affect their decision or management of research projects. On the other hand, many policy makers try to increase the national economic growth from public findings in university research and this efforts attempt to create regional clusters of high-technology firms around universities. Faced with the growing role of universities, universities respond to demand of governments and firms, and they perform various collaborative activities including research and development (R&D) and education under regulation of national public policy. In Korean, the public policy initiatives tend to tighten university-industry linkages in national innovation system. These policies aim to expand university-industry collaboration in regional innovation system in order to enhance the contribution of university-based research and knowledge diffusion to national and regional innovation and economic performance. Many of these initiatives attempt to increase national economic development based on university research by supporting the creation of the 2
3 industry-university cooperation foundations, business incubating centers, and technology licensing offices in terms of organizational infrastructure and research program they operate in government findings. Other policy efforts are founded in a series of legislation and enactment of law, the Law on Industrial Education and Industry-University Cooperation of 2003 is most significant and is credited with improving universityindustry collaboration and technology commercialization in Korea. We argue that the complete revision of the Law on Industrial Education and Industry- University Cooperation of 2003 is significantly important in university-industry collaboration in Korean innovation system. In this article, we evaluate the policy formation and implementation after and before enactment of this law for last 10 years. Reflecting on policy implementation during the last decade, in the future universityindustry policy would expand and invigorate the present level of collaboration though national and regional policy. Based on this discussion, we define the concept of university-industry relations. Second, we evaluate national university-industry collaboration policy process and result during the past decade. Third, we assess legislations and their impact initiated by Korean national government. Finally, we conclude with an implication and agenda for future research. Ⅱ. Concept of Industry-university collaboration Defining university-industry collaboration The concept of university-industry collaboration is focused on the interaction of university and firm including official and unofficial activities. Thus, the universityindustry collaboration is defined as a strategic partnership between universities and firms that effectively respond the needs of the market through the interactions of human resources and scientific and technological knowledge (Park & Lee, 2012). For most universities, university-industry collaboration is activity of scientific and technology transformation to industry, sponsored research and problem solving in productions and processes to expand the government and industrial investment and graduate employment (Smilor, 1993). Firms focus on industrial innovation to utilize university knowledge and technolology and human recourses with publications, conferences, consulting, informal interaction with university researchers, patents and licensing. Government aims to increase the commercialization of academic research to industrial innovation and to facilitate the application of theses research to improve national economic performance. Lee (2012) emphasizes open innovation is important and university-industry collaboration tends to expand broader by participating various actors in collaborative works. Park (2000) categorized university-industry collaboration into multilateral cooperation to maximize the national competitiveness and innovation based on the 3
4 networks of all relevant actors, not relationship between the firm and the university. The Law on Industrial Education and Industry-University Cooperation of 2003 defines university-industry collaboration is to foster industrial education and training based on human resource development and industrial competence, and formulate efficient research and development system and finally contribute to the national and regional economic performance through knowledge diffusion, technology advance and industrialization. In summary, university-industry collaboration is defined as multilateral, official and unofficial activities to enhance the social innovation and the national and regional economic performance. Forming a typology The term of university-industry collaboration and type of activities is varied but is considered as an important policy field in the national and regional innovation system. Various government departments promote policies regarding the goal of organization. In 2011, 26 policy programs are operated by Ministry of Education and Science, Ministry of Knowledge Economy, Small and Medium Business Administration. Technology advancement, education, technology transfer, sharing of equipment and infrastructure construction are the main policy goal respectively investing one trillion and billion won (Korean National Science and Technology Commission, 2011). University-industry collaboration is categorized by actors, interaction between university and firm, policy orientation. First, university-industry collaboration is divided into bilateral interaction and unilateral interaction. The form of university-industry collaboration is the bilateral cooperation. Thus university-industry expands multiple actors to participate in social innovation and national innovation system. In universityindustry relations, various actors appear to be in either independent or consortium type of interactions. Table 1. Actors Actors Research university(including S&T university), national and regional university Big and large company, small and medium enterprise, high-technology company Government research institutes Industry research institutes National governement Regional government Source: Korean Ministry of Education, Science and Technology, Korean Research Foundation (2012) Second, university-industry collaboration takes official and unofficial cooperative forms. OECD (2002) divides the interaction between university and firm into official and unofficial cooperation in Table 2. 4
5 Table 2 Activities Publication, patent Conference Share of research facility Internship, co-op Informal interaction Unofficial Official Consulting Continuing education and training Contract or sponsored research Staff and executive exchange Spin-off, Joint Venture Source: OECD (2002) Third, the policy orientation are divided into infrastructure, R&D, education, technology transfer, product and process advances, and labor mobility to promote linkages between university and firm in Table Ⅲ. Table 3. Policy goal Purpose Infrastructure Education and training Technology transfer and research relations Knowledge and personal exchange Type The university-industry foundation, incubating center, TLO,ILO Research facility Coordinated support programs Co-op programs, internship, continuing education, executive development, industry customized programs, student scholarships and contract department with industry Technology transfer, joint venture, spin-off, access to research facility Contract research, cooperative R&D projects Incubating businesses Industrial project by students, hiring research-oriented students Participation in conferences and seminars Industrial consulting by university faculty and staff Knowledge sharing through publication and research results by faculty Source : Kwon et al, 2011 University-industry collaboration as Public Policy: The nature and policy orientation The importance of university-industry collaboration is a major policy instruments for government to affect university system and industrial innovation to increase the national and regional economic performance. Another importance is the scale of government investment on university, firm, government research institute, and local and regional government. Multiple government ministries of Ministry of Science, ICT and Future 5
6 Planning(MSIP), Ministry of Education(MOE), Ministry of Trade, Industry and Energy (MITIE), Small and Medium Business Administration(SMBA) adopt university-industry collaboration as policy instruments to achieve their organizational goals and national funding of 193 billion won is distributed in projects and programs. Why Korean governments promote the collaboration between university and firm? The importance of role of universities in technological advance and industrial innovation is significant (Pavit, 1984; Etzkkowitz & Leydesdorff, 1997; Eom & Lee, 2009). Thus, universities emerge as the key component of the national innovation system (Freeman, 1987, Lundvall, 1992). Global competition and technological change significantly increase firm s links to university for not only knowledge but also its industrialization. Another reason is that economic structure has been dominated by big firms and government, and a relatively weak role by universities and the SMEs (Kim, 1993; Lim, 2006). In 2005, 39.7% of researchers and 52.2% of Ph.D. researchers work for the top 20 firms (MOST, 2007; Eoum & Lee, 2009). Big firms have dominated the in house R&D since mid 1980 and acquire technology sources and human resources from developed countries (Eoum & Lee, 2009). Thus, Korean government tried to promote national R&D capacity by legislating law and initiating program. Law and related institutionalization stimulate the reformation of university to contribute the industrial innovation. In other words, Korean government induces universities to play major role in creating new industry and new jobs. Most government R&D investments and research infrastructure projects are related to university-industry collaboration directly and indirectly. Many government administrations and branches fulfill similar functions in collaboration between university and industry. Each has different policy goals and strategies to achieve. SMBA focuses on technological advance in manufacturing process and product development and human resource development and employment of Small and medium enterprise. MITIE develops technological breakthrough by collaborating with businesses and university researches to promote new industry growth and economic performance. MOE focuses on reform of university structure and educational system and program by promoting cooperation between colleges and firms. Ministry of employment and labor focuses on reeducation and strengthening of ability through college programs. MSIP has policy goal to enhance the role of university in industrial innovation, technology commercialization and new growth engine through collaboration between university and firm and government research institute and industry. Ⅲ. How government policies affect the collaboration between university and firm? Towards Policy Evaluation Origins of law Toward the evaluation of policies, we review the process of introduction of policy, formulation, implementation and assessment. We focus on the period after the Law on 6
7 industrial education and industry-university cooperation of How this law affects the linkages between university and firm? We argue that the Law on industrial education and industry-university cooperation is remarkable in policy initiatives. To promote the industry-university relations, universities started to establish the industryuniversity cooperation foundation after the enactment of the Law on industrial education and industry-university cooperation of This law has a purpose of responding to industrial demands of fostering talented graduates based on education and research. It aims to build effective R&D system and industrial advance by promoting creation, diffusion and commercialization of knowledge and technological innovation. The main components of law are related to institutionalization of university-industry collaboration by designing system. Establishment of university-industry cooperation foundation, technology transfer office, acquisition and management of intellectual property rights, continuing education, corporate scholarship and contracted department with firms, R&D, business development and commercialization are invigorated under law. The most important of policy initiative is the establishment of university-industry cooperation foundation. Before the enactment of law, university has no legal rights and law enacts a provision including university-industry collaboration foundation has legal right and obligation as a contractor with firms. The Law on industrial education and industry-university cooperation also enact a provision which university-industry collaboration foundation acquires intellectual property rights. Under law, universityindustry collaboration foundation manages independent accounting from universities. It operates profitable business based university outcomes and includes overhead costs based on the industry-university contracts in their operation revenue to secure the financial base which can be operated. In regard to education and training, the establishment of the contract department with industries aims to leverage the research and education. It responds to the industrial demand in human capitals. The effects of the Law The Law on industrial education and industry-university cooperation is evaluated as the legal foundation for university system shift and relations between university and firm. Efforts of promotion of the industry-university cooperation gains momentum as universities start to establish the industry-university cooperation foundation after the enactment of the Law on industrial education and industry-university cooperation of As of 2011, 369 universities established industry-university cooperation foundations. In 2003, the number of university-industry cooperation is only 25 and increased to 369 in The number of employees in university-industry cooperation foundations is 1,558 people in 2005, but it is increased to 6,291 in The profit was 161 billion in 2005, but increased to 5 trillion won in
8 Table 4. Current status of the industry-university cooperation foundation Number of foundation The number of Employees operating revenues (unit: one million won) N/A N/A N/A N/A , , , , , , ,300 4,415, ,204 5,225, ,012 4,677, ,291 5,576,026 * Materials: Ministry of Education, Science & Technology, Korea Research Foundation (2012). Industry- University Cooperation Activities University 2011 Full Report Under this law, as of 2011, 100 universities established TLOs. The intellectual property rights of research outcomes of university professors began to belong formally to universities. In the past individual professors tended to file patents to have them as their personal ownership. After enactment of law, it has been a significant growth in the field of securing intellectual property rights and technology transfer over the past decade. In 2011, the number of technology transfer increases from 210 cases in 2003 to 1,990 cases. Income from technology transfer increase about 47.9 billion in 2011 from about 1.9 billion won in In regard to overseas patent, 564 cases in 2003 increase to three times and 1,627 in ,758 domestic cases in 2003 grow to seven times and 20,205 cases in Intellectual property rights and industrial products exchanges has increased 318.6% and the registration of intellectual property rights has increased to 91%. It has increased 203% for technology transfer, and it has increased 454% for loyalty fee income. 8
9 Figure 1. The current number of technology transfer and income from technology transfer, ,500 Number of technology transfer Income from technology transfer (unit: one million won) 47,978 50,000 2,000 37,571 1,990 40,000 1,500 27,807 27,872 1,615 30,000 1, ,221 1,365 20, , ,033 6,323 1,973 3, ,000 0 Figure 2. Current status of registration and patent applications at home and abroad, Domestic patents (application+registration) Oversea patents (application+registration) 30,000 2,000 1,568 1,627 20, ,000 11,378 1,134 1,412 12,626 13,570 15,894 20,205 1,500 1,000 10, ,758 3,238 4,484 7,
10 From the point of view of industry-university cooperative education, contract department with industry expands. In department, student population grows to 2 times than in 2008 by providing vocational education and training course in specific sector and product. Source: Ministry of Education, Science & Technology, Korea Research Foundation (2012) Industry-University Cooperation Activities Report in 2011 Another dramatic shift in university-industry collaboration is human capital exchange and faculty consulting in Table 5. Education or consulting is more prevalent in collaboration. Table 5. Human capital exchange Faculty secondments in industry Industry secondments in university Number of faculty consulting ,106 2, ,485 3, ,719 4,266 1, ,900 5,955 1, ,924 4,397 2,160 total 11,134 20,719 6,509 Ⅳ. Conclusion and Discussion We reviewed the origins and effects of this law how it promote the institutionalization the collaborative infrastructure and change status dramatically after the enactment of law how university-industry cooperation institutionalized and expand the performance quantitatively in Korea. In statistical results, there was a clear developmental change for each of infrastructure, education, and technology transfer in industry-university 10
11 cooperation as a policy outcome. However, the results do not address how policies affect the firm performance and the impacts of policy initiatives and university system shift on firm performance. In the same vein, it may be true that there is a limit to consider the publicity of policy to achieve social innovation and economic performance. We remain these issues for future researches. We define the concept of university-industry relations and evaluate national universityindustry collaboration policy initiative and result during the past decade. We conclude with an implication and agenda for policy makers to consider future policy process. First, in university-industry collaboration, there is mismatch in terms of goal and purpose in collaborative activities. Second, firm size and industrial sector ae related to behavior and experience in industry-university collaboration. For instance, large companies (64.5%) experienced the collaborations than ventures and medium-sized enterprises (46.9%) (Korea Industrial Technology Association, 2008). Third, government support the public funding for collaborative infrastructure, but competence and continuity is not sufficient as a independent foundation to make a profit. In foundations, only 29.9% work for industry-university collaboration related tasks and 68.1% of employers are less than two years in related work experiences, and professionals are only 9.2% as of 2011 (Korean Research Foundation, 2013). In conclusion, there are still many barriers in the policy-making process to promote a industrial innovation in the private sector. We suggest three policy supplements for policy-makers, researcher and university-industry collaboration related staff and professionals to be considerable. First, technology commercialization is a key fundamentals in collaboration, and is most profitable activities in entrepreneurial university. Second, collaboration expands to small and medium firms and technology startups and ventures from large firms. Third, organizational restructure with professional staffs and strategic management may be significant to enhance the performance. Forth, national governmental support will be sustained to enhance the national economic performance. However, regional and city government play an innovative role to build business ecosystem and regional innovation system as a catalyst. 11
12 References, ShuZu Kwon (2011). University-Industry Collaboration activation Policy in Korea. POSTECH University-Industry Collaboration institute. MOE(Minstery of Eucation) NRF. 2003~2011 year University-Industry Collaboration white paper. OECD (2002). Benchmarking industry-science relationships. Cohen, W. M. Nelson, J.P. and Walsh,J.P. Links and impacts: the influence of public research on industrial R&D,Management science 48 (1), 1-23 Eom and Lee(2009) empirically examined that sizes and R&D intensity are not significant and it reflects importantly George,G., Zahra, S. and Robley Wood, D. Jr. "The Effects of Business-University Alliances on Innovative Output and Financial Performance: A Study of Publicly Traded Biotechnology Companies," Journal of Business Venturing, Vol. 17, Park, M., & Shon, H. & Lee, H. (2012). Classification of the Subcontracting Companies Accompanied by R & D Capabilities Compare and Research. Journal of Information Technology and Architecture, 8(2), Smilor, R. W., Gibson. D.V. & Dietrich, G. B. (1993). The Entrepreneurial University: The Role of Higher Education in the United States in Technology Commercialization and Economic Development. International Social Science Journal, 45(1). Korean National Science and Technology Commission, 2011 Pavitt, K., Sectoral Patterns of Technical Change:Towards a Taxonomy and a Theory, Research Policy, Vol. 13, pp , References is working.. 12
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