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Changes in Innovation Environment and Policy Responses

Author Young-Jin Ro et al. Date 2014.12.29 Page 295

In this study, we investigate the current trend of innovation system in Korea and provide a policy implication for new paradigm of innovation policy. Innovation becomes major factor to lead an economic growth. Especially the case of Korea, the role of innovation in recent decade
has been emphasized by many policy makers and researchers. The Korea’s economic growth strategy which led double digit economic growth in average in 1970s and 1980s by increasing physical investment has reached the limit and is no longer provide an economic growth as it used to, and thus the innovation that is induced by the technological development and the creativity of economic agent became more important in leading Korean’s economic growth. In this sense, the role of innovation in Korea should be carefully reviewed and its efficient utilization should be examined.

This study is composed of two parts. In part I, it aims to provide the evaluation of the current status of Korean innovation system and the necessity of new innovation policy. In chapter 2 of part 1, a theoretical background of innovation theory is reviewed and the evaluation of current Korean innovation system is provided. By dividing innovation system into four parts - innovation input, innovation procedure, innovation output, innovation infrastructure, the aspect of Korean innovation system and its comparison with other developed countries are reported. In chapter 3, the 7 environmental challenges that Korea faces is introduced. These are from both internally and externally, and are classified as the decrease in potential economic growth, the
deepness of low birth rate and aging society, the growing importance of knowledge-based capital, the expansion of globalization in R&D, the enlargement of technology convergence, and lastly, an increasing trend of technology protectionism. In chapter 5, the need of new innovation policy is provided and our research paradigm is introduced.

In part 2, we classify t he i nnovation system i nto t hree steps and seven sectors, and evaluate each sector’s current trend and weakness. The sectors we look into in depths are 1) R&D investment, 2) Innovation financing, 3) Innovation labor in the innovation input step,
4) Industry-academic-lab network, and 5) technology transfer and commercialization in the innovation procedure, and 6) technology protection and 7) technological standardization in the innovation infra-structure. Throughout chapter 1 to chapter 7, the current trend and possible problem of each section are provided. We also provide policy evaluation and its implication in each section. After introducing current government policy that has been executed to overcome those problems, we evaluate the strength and the weakness of those policies, and provide policy implications for better sectional innovational policy.