The Republic of Korea’s remarkable economic and social growth can be attributed to innovation, with its success most salient in the Information and Communications Technology (ICT) industry. The nation’s momentum for innovation is quite dazzling if one considers the state in which it found itself only half a century ago. Ranked as one of the world’s backwater economies after the end of World War II, Korea has transformed itself into the home of ubiquitous global brands such as Samsung, Hyundai, Kia and LG. Innovation has peddled Korea’s prosperity, whereas most African countries that faced the same situations fifty years ago have hardly made progress. This paper examines how Korea judiciously built its economy through innovation and the reasons why it is poised for long-range competitiveness. Equally important, Korea gives Africa insights to what is possible and what needs to be done in scaling down barriers to innovation and development.

Conceptualising innovation

Although Africa has been touted as the next growth pole for the world, it needs to reduce its reliance on natural resources. Across many sectors, innovation has received attention as an important component for building long-term economic strength and drive for any country.⁽²⁾ A troubling misfortune is that African leaders only seem to pay lip service to building innovative economies. Put candidly, innovation needs more attention than it is currently receiving. With so many socio-economic challenges in health, infrastructure, energy, the ICT sector and agriculture, the importance of innovation in Africa cannot be overstated. Innovation is central to national prosperity. The importance of innovation can clearly be demonstrated by the differences made between Ghana and Korea over the last four decades in terms of economic growth.⁽³⁾ Furthermore, it is posited that the reason the world has achieved so much in such a short space of time is attributed to innovation.⁽⁴⁾

Conceptualising innovation is quite problematic because the concept carries many varied definitions. This discussion paper will however, not belabour the definitional complications. Thus, suffice it to say that innovation is conceptualised, for the purposes of this paper, as ideas successfully applied.⁽⁵⁾ To elaborate, innovation implies the ideas that are applied to a success in producing a salient outcome, be it radical or incremental. Innovation is different from invention in that invention simply means the discovery or creation of new things. Innovation has practical and functional purposes, for its intended outcomes are not just new products and services, but enhanced knowledge and judgment at a more conceptual level.

How Korea developed its innovation capacity

Korea’s innovative success can be categorised in three stages. The first was described as the imitation process (1960s and 1970s) and mainly focused on foreign direct investments (FDI), protectionism and import substitution.⁽⁶⁾ It was during this period that President Park Chung Hee was credited with pushing science and technology.⁽⁷⁾ This saw the establishment of the country’s first state owned research institution, the Korean Institute of Science and Technology (KIST) and Ministry of Science and Technology. During the same period, a Technology Incentive Law (1967) was enacted, which held numerous tax exemptions for local firms. The Korean Government founded the Korea Advanced Institute of Science to develop and offer graduate science programmes, and also encouraged universities to develop their own undergraduate programmes in science. The Korean Development Institute was also established in 1971 as a leading think tank for the nation’s economic and social development.⁽⁸⁾  The institute advocated the need for high technology industries as well as numerous soft industries to absorb the unemployed segment of the Korean workforce. It also recommended the need for a long-term plan for science and technology by identifying numerous areas of comparative advantage. The areas include informatics, nanotechnology, biotechnology, aeronautics, oceanography and engineering.⁽⁹⁾ Private companies such as Posco decided to build the Pohang Institute of Science and Technology and the Research Institute of Industrial Science and Technology, attracting back top scientists who had already immigrated to other countries. In addition, the Korean Government sponsored scientific and technical education, sending graduate students to top tier universities in the United States of America during the 1970s and 1980s.⁽¹⁰⁾

The second stage, or the transformation process (1980-1990), was focused on technology transfer, research in universities, public institutions and private firms.⁽¹¹⁾ It was during this time that a national research and development (RD) programme, the founding of innovative hub Deadeck Science Town and the steepening of RD incentives and tax exemptions on private firms took place.⁽¹²⁾ The town accommodated specialised laboratories for shipbuilding, nuclear fuel processing, metrology, chemistry, and energy research.

The final stage has been known as the innovation process (1990s to date), and saw an emphasis on innovation in smaller firms that were also regarded as being more flexible and dynamic.⁽¹³⁾ This included the formation of the National Council of Science and Technology, the birth of a five-year innovation plan, the birth of Science and Technology Vision 2015 and the increase in research incentives for universities. From 2000, Korea made preparations for a national technology roadmap and restructured the Ministry of Science and Technology in order to move from high technology towards bio- and nanotechnology.⁽¹⁴⁾ After the 1997 Asian Financial crisis, Korea turned its ICT sector into a growth engine, making broadband a policy priority, ensuring close cooperation for ICT growth and emphasising universal ICT education.  As a result, Korea is now the world’s number one ICT nation in terms of access, use and skills.⁽¹⁵⁾ Further, according to the Bank of Korea, about 30-40% of the country’s gross domestic product (GDP) is contributed by the ICT industry.⁽¹⁶⁾ It also has the highest penetration of high-speed internet of any country in the world.⁽¹⁷⁾

Partnerships with other countries are also critical to Korea’s innovative development. For example, a Centre for Photonics and Nanostructures (CPN) was set up in 2006 and included the involvement of the Korea Institute of Science and Technology (KIST) in Seoul, the French Government research organisation Centre National de la Recherche Scientifique (CNRS), France’s Joseph Fourier University in Grenoble and the Ecole Normale Supérieure in Paris.⁽¹⁸⁾ These collaborations help bridge the gaps in ideas and ensure prosperity in the future. The country has numerous intra-Korea collaborations that are meant to enhance innovation. A learned population is also a significant contribution to a country’s innovation in terms of academic publications, and Korea’s 224 universities and over 200,000 scientific researchers⁽¹⁹⁾ have ensured its research output has been rising steadily over the years. Korea also is home to one of the largest Intellectual Property (IP) base in the world,⁽²⁰⁾ ranking second globally in terms of patents compared to total population and first for the number of patents by GDP.⁽²¹⁾

While innovation studies have unfortunately been mostly focused on private firms as well as physical products and technological processes,⁽²²⁾ it is fundamental to underline that innovations are also important for the public sector, service sector, in social and political processes and many other sectors. However, it has been argued that public sector innovation is key to national growth and development.⁽²³⁾ In the case of Korea for example, under former President Kim Dae Jung, the government was restructured three times - in 1998, 1999 and 2001.⁽²⁴⁾ These restructurings occurred to enhance democracy and openness, enhance private sector development and to promote productivity and competitiveness in the government. This showed how the country’s leaders could be innovative to improve the political environment, thus playing a critical role in encouraging and accelerating public sector innovation as well as community innovation.

Recommendations for Africa

An innovative government is essential when it comes to creating and implementing policy, regulations and standards, governance, education and infrastructure that fosters a favourable climate for innovation. To this end, Korea has made great strides in building one of the world’s most enviable education systems, the best ICT infrastructure, a great transport infrastructure and an energy system that can be capitalised on by its populace to innovate. In simplified language, “a national government needs to facilitate the articulation and implementation of innovation initiatives.”⁽²⁵⁾ Moreover, a series of export promotion policies and measures were put in place in the 1960s, thereby ensuring that innovators can easily access outside markets. The Korean Government extended its hand in facilitating access to finance, stimulating demand through public procurement and forging international collaborations. It must be understood that governments, as well as private firms, need to invest strategically and establish institutions that sustain innovation. Korea established a Small and Medium Enterprises (SME) technology innovation programme (SMAB/KEIT), new technology purchasing programme and the Technology Appraisal Guarantee Scheme (Korean Technology Finance Corporation (KOTEC) to make innovations easy.⁽²⁶⁾ It has been said that Korea developed its innovative structures in order to build their industrial capabilities, to ‘catch up’ with the West and to enhance their military capabilities.⁽²⁷⁾ To achieve this, RD was essential. By putting in place government sponsored RD structures similar to that of Korea, African governments can provide fertile ground for innovation driven by local situations and demands.

According to Pearson’s 2012 Learning Curve report, Korea has the second most effective education system in the world after Finland.⁽²⁸⁾ The Korean Government formed a basis for nurturing a receptive and creative population from early on. Education in an innovation economy nurtures skills, capabilities and knowledge of a population. Academic institutions and innovation hubs capacitate people with the ability to generate powerful ideas and insights. Although all disciplines of academic study are important, of late, societal transforming innovation has been closely tied to science, technology, engineering and mathematics (STEM) disciplines. STEM disciplines are also regarded as the major drivers of innovation and contribute to high levels of growth and productivity within a country.⁽²⁹⁾ Korea understood this, and has worked hard to enhance itself. For many African countries, innovations in the education system are necessary to accommodate the many people who lack access to it. A robust education system will incubate breakthrough solutions to various challenges in food, health and employment.

One must remember however, innovations themselves can be at the mercy of others if IP rights are neglected. To this end, Korea has also developed a Korea Intellectual Property Office (KIPO) to safeguard and enhance the nation’s IP. This is just one of the ways governments can ensure that academic and vocational institutions become frontiers of entrepreneurial education and innovation breakthroughs.

Concluding remarks

The need for building innovative economies in Africa is long overdue. Despite several challenges, it is very important to develop capacities in areas where the continent is trailing so that it can address its perennial problems once and for all. This requires being innovative in areas like agriculture, institutional development, enhancing business environment, building ICT capacities, nurturing SMMEs and cooperatives, building strong infrastructure for education and in intellectual development. But this alone will not be enough, for the continent has lost much of its human resources. There also is a need for creating synergy with the African diaspora all over the world, so that they become part and parcel of a strong innovation system. This includes building an innovative infrastructure that leads to commercialisation, entrepreneurship, and employment creation.

Innovation is not a domain of monopoly by any field or discipline. Central in an innovative framework should be the government, through the fostering of an environment for innovation across the board. However, players like non-governmental organisations (NGOs), civil society and private companies also need to invest in innovation. Government’s policies and regulations are fundamental, but this alone is not enough because financing and institutional support is often a neglected aspect. National leaders as well as regional and continental bodies, like the African Union, also need to be vocal and pragmatic when it comes to innovation, and complacency will only be detrimental to the prospects of developing many African countries.

Innovation should also be leveraged in ways that are socially, environmentally and economically responsible in Africa. Doing so, however, will not be a simple endeavour. If it is poorly executed, it will lead to a waste of effort and precious resources many African countries do not have. Instead, well-crafted comprehensive policies, responsible implementation and timely evaluation can prepare the ground for innovations for a long-term future. Finally, because innovation is global, there is also a constant need for self-evaluation and improvement in order not to focus on obsolete practices.

Written by David Bote ⁽¹⁾

NOTES:

(1) Contact David Bote through Consultancy Intelligence Africa’s Asia Dimension Unit ( asia.dimension@consultancyafrica.com). This CAI Discussion paper was developed with the assistance of Megan Erasmus and was edited by Nicky Berg.
(2) ‘Innovation policy: A guide for developing countries’, World Bank, 2010, https://openknowledge.worldbank.org.
(3) Ibid.
(4) Dodgson, M. and Gann, D., 2010. Innovation: A very short introduction. Oxford University Press:  New York.
(5) ‘Innovation’, Oxford Dictionaries, 2012, http://oxforddictionaries.com.
(6) Campbell, J.R., ‘Building an IT economy: South Korean science and technology policy’, The Centre for Technology Innovation, September 2012, http://www.brookings.edu.
(7) Ibid.
(8) ‘The 1970’s: Designing the economy for prosperity’, Korean Development Institute, 2010, http://www.kdi.re.kr.  
(9) Ibid.
(10) Chung, Y., 2007. South Korea in the fast lane: Economic development and capital formation. Oxford University Press: New York.
(11) Ibid.
(12) Ibid.
(13) Ibid.
(14) Ibid.
(15) ‘Measuring the information society 2012’, International Telecommunications Union, 2012, http://www.itu.int.  
(16) Baik, O.M., ‘South Korea information and communication industry’, Swiss Business Hub Korea, August 2011, http://www.osec.ch. 
(17) Russel, J., ‘Korea is the world’s first country to see high speed internet access pass 100% penetration’, The Next Web, 22 July 2012, http://thenextweb.com.
(18) Tearse, G., ‘Why science is golden for South Korea’, CNRS International Magazine, April 2008, http://www2.cnrs.fr.
(19) Ibid.
(20) ‘RD Patent Centre, a control tower for promoting strong intellectual property’, Korean Intellectual Property Office, 25 February 2010, http://www.kipo.go.kr.
(21) Ibid.
(22) Windrum, P. and Koch, P., 2008. (eds.). Innovation in public sector services. Edward Elgar Publishing Limited: Cheltenham.
(23) Ibid.
(24) Kihl, W.Y., 2005. “The past as prologue: President Kim Dae Jung’s legacy and President Roh Moo-Hyun’s policy issues and future challenges,” in Mansourov, A.L. (ed.). A turning point democratic consolidation in the ROK and Strategic readjustment in the US-ROK Alliance. Asian Pacific Centre for Security Studies: Honolulu, http://www.apcss.org.
(25) ‘Innovation policy: A guide for developing countries’, World Bank, 2010, https://openknowledge.worldbank.org.
(26) O’Donnell, T., ‘South Korea SME innovation support schemes: Review report for the IPF review visit to South Korea’, Pro Inno Europe, April 2012, http://www.proinno-europe.eu.
(27 Arnold, W., 1988. Science and technology development in Taiwan and South Korea. Asian Survey, 28(4), pp. 437-450.
(28) ‘The learning curve: Lessons in country performance in education’, Pearson 2012 Report, 2012, http://thelearningcurve.pearson.com.
(29) McNeely, C. and Hahm, J., ‘The global chase for innovation: Is STEM education the catalyst?’, Global Studies Review, 25 April 2012, http://www.globality-gmu.net.