the oic presentation on 9 -11 aug 2007

8/8/2019 The OIC Presentation on 9 -11 Aug 2007

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International Symposium on Science, Technology and Innovation 9-11 August 2007, Kuala Lumpur, MALAYSIA

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Consulting, MUST and the author(s).

Managing The Science,Technology and Innovation

Value Chain for Wealth

Creation

Academician Tan Sri Datuk Dr Omar Abdul Rahman

Senior Fellow Academy of Science Malaysia, President

Malaysia University for Science and Technology and

Founder of PRIMA Asia Pacific Consulting






Introduction

The Science, Technology Innovation Value Chain has alwaysbeen a central theme to many recent STI Strategic Plans.Many nations had adopted the S&T Value Chain to generateR&D and Industrial Development Programs. Many haveseen results, but not many displayed significantimprovements in the nation’s economic performance.

One of the nation, that had shown remarkable achievementin STI development, is South Korea. The success indeveloping and strengthening science & technology andindustrial capacity through continuously enhancing theinterface between industry-government and industry-S&T

community may be one of the critical drivers for Korea’seconomic prowess.

Using this as a lesson, how can we explore the possibleoptions in designing an appropriate STI Best Practices for

the OIC nations.






Part 1

The Science, Technologyand Innovation ValuesChain - Background






• Managing STI in the K-Economy, goes beyondDOING GOOD SCIENCE

• Good science MUST be translated intoINNOVATIVE TECHOLOGIES

• Which Deliver New Products New Services Productivity Improvement

At theMARKETPLACE !

MANAGING STI -Background






This means – Managing the “Total Value Chain”

MANAGING STI -Background

Science Technology InnovationUtilisation or

Commercialisation

The framework for Managing the Total Value Chain isthe “National Innovation System”






Part 2

The National InnovationSystem






• The concept of national innovation systems rests on the premise thatunderstanding the linkages among the actors involved in innovation is key toimproving technology performance.

• Innovation and technical progress are the result of a complex set of relationships among actors producing, distributing and applying various kinds of knowledge.

• The innovative performance of a country depends to a large extent on how theseactors relate to each other as elements of a collective system of knowledge creationand use as well as the technologies they use.

• These actors are primarily private enterprises, universities and public researchinstitutes and the people within them. The linkages can take the form of jointresearch, personnel exchanges, crosspatenting, purchase of equipment and a varietyof other channels.

• There is no single accepted definition of a national system of innovation. What isimportant is the web of interaction or the system, as reflected in the definitions

The National Innovation System

National Innovation System, OECD






A national system of innovation has been defined asfollows:

• “ .. the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies .”

(Freeman, 1987)

• “ .. the elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge ... And are either located within or rooted inside the borders of a nation state .” (Lundvall, 1992)

• “... a set of institutions whose interactions determine the innovative performance ... of national firms .” (Nelson, 1993)

The National Innovation System - Definitions







• “ .. the national institutions, their incentivestructures and their competencies, thatdetermine the rate and direction of technologicallearning (or the volume and composition ofchange generating activities) in a country.”(Patel and Pavitt, 1994)

• “.. that set of distinct institutions which jointlyand individually contribute to the developmentand diffusion of new technologies and whichprovides the framework within whichgovernments form and implement policies toinfluence the innovation process. As such it is a

system of interconnected institutions to create,store and transfer the knowledge, skills andartefacts which define new technologies.”(Metcalfe, 1995)

The National Innovation System – Definitions (cont.)







Many countries have their own framework for National Innovation System.,

Malaysia’s Innovation System Model, the late 1990s model is as shown below

FinanceHuman Capital

(K-Worker) InstitutionsLaw and

RegulationsProcess and

Management

K-Generation &

AcquisitionK-Utilisation &

Management

Government

People At

Large

Enterprises

Make Some

Government

Enterprises

Buy Some

The National Innovation System - Malaysia






Each end of the value chain, must be supported by a S&T Human Capital Pyramid

K-Generation &

Acquisition

K-Utilisation &

Management


The NIS Value Chain

Champions

Advisors

Popularisers

PlannersManagers

Educators

Practitioners

Champions

Advisors

Popularisers

PlannersManagers

Educators

Practitioners







NationalInnovation Council

The government has launched the NIC to formulate a

comprehensive innovation agenda and instituting a national

innovation system to enhance our competitiveness and resilience

through science and technology. The Council is chaired by the Right

Hon Prime Minister. The council will focus in 3 to 4 selected key

technology areas as well as providing string connectivity between

researchers to end-users to increase the rate of commercialisation

Centre for CreativeIdeas

A Centre for Creative ideas will also be established. This centre

would provide relevant skills, such as mentoring, and resources

such as prototyping facilities






STEPI highlighted the annual real GDP growth of Korea average 7 percent ormore during the 1962-1994 period and exports have increased from 2 billiondollars in 1960 to 557 billion dollars in 1996. In 1997, with the Asian FinancialCrisis, GDP growth showed -6.7%. Fortunately the economy recovered and by2003, Korea was ranked 37th in overall performance among 60 countries andregional economies with GDP per capita of USD 12,638 and total GDP of USD605.7 billion.

There have been much debate that Korea would experience difficulties in furthergrowth because of its structural and inherent problems such as Chaebolcompanies and technological gaps. However, it seems that Korea is moving

forward whilst other Asian countries are showing stagnant growth rate.

How has Korea achieved such growth in only four decades?

The National Innovation System –

Impact on Korea

Dr Deok Soon Yim, STEPI, Korea






Although there are many factors, manyresearchers have pointed out that Korea’s

strong National Innovation System (NIS) asone of the development and growth factors. It isargued that private industries and government-sponsored Research Institutes (GRIs) haveplayed critical roles in Korea’s NIS andcontributed to the economic development

In 1990s, the theory of National Innovation

System (NIS) attracted the attention of manypolicy-makers. The NIS model started to focus more on relationship and processes between various innovation actors .

The National Innovation System –

Impact on Korea

Dr Deok Soon Yim, STEPI, Korea






Korea’s National Innovation System

Global S&T Environment

Government

ResearchInstitutes

FinancialInstitutes

OtherActors

Universities

Industries

Market

Knowledge,Money,People

National S&T Environment

The National Innovation System - Korea






Market, financial Inst., gov’t, and int’l S & T Environment

University

Industry

Major Actors

Environment,SupportingAgency

The extended roles of the actors in National Innovation System - Korea

S & T Knowledge

Production

S & T Knowledge

Transfer

S & T Knowledge

Use

Gov’t Research Inst.






The Korean National Innovation System, has evolved over time inaccordance to the Economic and Industrial Development of Korea. Therefore,it fairly clear that the NIS is aligned to the industrial and economicdevelopment priorities of the country. As such, it is not a surprise for the NISto be a ” very formalised, government-driven, top-down structure in policyplanning and decision making”.

Although it has been very successful for the past four decades in catching up,it begin to show weaknesses as Korea moved into the 21st Century.

Since 2004, Korea have started to restructure its NIS focussing on majorareas within the innovation ecology

• actor• performance-diffusion• element• infrastructure• system


Hee-Yol Yu, KISTEP, Korea






1. Actor• Actor Innovation strengthens the

creative innovation capacity of thethree major players (companies,universities and government RIs) andpromotes linkages and interfaces

2. Element Innovation• Efficiency in allocating R&D

Resources based on socio-economicdemand, bridge demand-supplymismatch, and expanding

infrastructure accordingly3. Performance-Diffusion Innovation• Supporting the creation and

industrialisation of innovative andcreative R&D results in all phases







4. System Innovation• Establishes a knowledge-

sharing, collaborative R&Denvironment and improves theefficiency of the S&Tadministrative system

5. Infrastructure Innovation• Develops S&T in harmony with

society. The government iscreating a supportiveenvironment and culture basedon infrastructure innovation







Key Initiatives

Initiative 1

Elevating the of Minister of Science and Technology too the position of Deputy Prime Minister .

With this elevation, Korea now has three deputy prime ministers of the Ministry ofFinance and Economy, the Ministry of Education and Human ResourcesDevelopment and the Ministry of Science and Technology. This implies that theparticipatory government is now recognizing science and technology as animportant ministerial function along with economy and education.

Initiative 2

The Deputy Prime Minister of Science and Technology Empowered to Coordinate and Control the National R & D Budget.

The deputy prime minister selects focus areas of investment in coordination withthe National Science and Technology Council and allocates R & D budgetaccordingly.

Strengthening The National Innovation System - Korea






Key Initiatives (cont.)

Initiative 3

The Deputy Prime Minister of the Science and Technology have a Comprehensive Coordinating Function for S&T Policy.

This includes national science and technology planning, nurturing humanresources and the like.

Initiative 4

Transfers Councils and Institutes to Deputy PM

The new system has transferred science and technology research councils and

government sponsored research institutes from the Prime Minister’s Office tothe Ministry of Science and Technology, which has made it easy to align theroles of the government sponsored research institutes with the national scienceand technology objectives.







Referring to some of the key actions by Korea,it could be seen, how the NIS has beenstrengthened in ensuring Korea could compete

in the market place and transform itself into aleading knowledge-based economy in theworld.







S&T Industry and

Economy

The NIS Value Chain

Deputy PM S&T Deputy PM Economy

T h e

M ar k e t

Private Sector RIs GRIs

Chae bols

Massive Research Funding

Focus on INTERFACE

Many Scientists

A leading nation in technology and economic development







Part 3

NIS and the K-EconomyEcosystem






The NIS framework is based on the K-Economy Framework, put in place as aconcept, around the late 1990s

NIS and the K-Economy

K-Generation &Acquisition

K-Utilisation &Management

Culture of Creativity and Innovation

K-Intensive Governance(Public/Private Sectors)

Smart Partnership Processes

Human Capital Development

• Capacity and Capability Building

• Entrepreneur Development






The K-Economy Model :-

• Enhanced capacity – to generate andacquire knowledge/ technology

• Enhanced Capacity – to absorb, utilise orcommercialise technology

• Managing the INTERFACE between theabove








The generation of knowledge is carried out by THREE Key Actors

Universities Research

Institutes

Industry







• In mature economy, each complements.Interface, institutions and processes,relatively well developed

• In developing economy, NO Industry, mainplayers – Government Research Institutesand Universities






K-Generation &

AcquisitionK-Utilisation &

Management

NIS and the K-Economy – Developing the Interface

Development of the interface, THIS IS CRUCIAL, as crucial to the capacity todevelop and acquire technology

Many countries are now intensifying efforts to enhance the INTERFACE

The interface management – Malaysia has also encourage the use of SmartPartnership principles






Developing NIS and the STI Value Chain

K-Generation

&Acquisition

K-Utilisation &

Management

The STI Value Chain – TECHNOLOGY LED

Developing nations has always been building the STI Value Chain based on the initiatives coming from GRIs and Universities. This is probably common to many OIC nations






K-Generation &Acquisition

K-Utilisation

&Management

The STI Value Chain – INDUSTRY Pull

Developed economies, with mature infrastructure and with global industrial players, leverage on market presence to generate technology which are based on market needs.

Developing NIS and the STI Value Chain






Can OIC nations, without mature infrastructure, lacking in global industrialplayers and quality resources, create a MARKET-led pull?

Developing NIS and the STI Value Chain - Opportunities

What the possible options for OIC nations?

What we are?

User of Technologies Traditionally Renown Global Traders Global Network (Historical and Religious Ties)

Negotiators Non centralised commercial platforms Successful Professionals (as engineers, doctors, scientists etc) Successful Expatriates






What could we probably say about ourselves?

We are STRONG as TRADERS.

Many nations aspire to be powerful traders, not many couldbecause trading hubs have certain features such as:-

• Open• Cosmopolitan• Historical• Accessibility• etc

Developing NIS and the STI Value Chain - Opportunities






As such, we should retain the strength of a trading nation and exploit the valuechain related to it.

Global Sourcing

Repackaging Rebranding Global Marketing

Strategic Dealing &Closing

Delivery Customer Service

A Possible Representation of the Value Chain for a Trade Centric Nation

Plentiful of opportunities in the Value Chain. S&T can be easily deployed toincrease yield in the respective portion of the chain






Driving the NIS

•Human Capital Development• creativity, innovation and entrepreneurship

•Smart Partnership Ethos• local and international collaboration• smart partnership framework




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means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of PRIMA Asia Pacific



Holistic approach to the development of the fullhuman potential. The objective is to createhuman capital i.e. “productive assets in the formof human competencies” or “ a portfolio of

different skills and assets” required by bothindustry and government to create a nation ofhigh competitiveness.








Human Capital Development encompasses thepractices and the environment to develop:

• Intellectual Capital

• Skill Capital• Social Capital• Entrepreneurial Capital• Psychological Capital• Spiritual Capital








Intellectual CapitalNurtured through formal and informal education – logical, strategic thoughtprocesses

Skill CapitalCodified and tacit knowledge, technical skills from formal training oracquired through experience

Social CapitalSocial skills, communication, cooperativeness, networking, smart partnershipprinciples enhances social capital

Entrepreneurial CapitalCreativity, innovativeness and entrepreneurship

Psychological Capital

Commitment, Passion, Dedication, Confidence, Belief in SelfSpiritual Capital• ethical values and principles• right and wrong etc• smart partnership ethos







Driving the NIS

Achieving objectives/ Targets of NIS

It requires cooperation, collaboration of manyplayers- National/ International.

Framework for Cooperation – SMARTPARTNERSHIP

• Win-win• Trust• Collaboration

• Transparency• Tolerance

Smart Partnership







Whatever, is the DRIVER for theSTI Value Chain, probably it isbest we look at Best Practices thatcan ensure NIS works for the OICCountries







Part 4

Making the STI ValueChain To Deliver – TheBest Practices

I i l S i S i T h l d I i







As reported, KOREA have seen severalSTI practices that could further enhancethe competitiveness of Korea such as:

1. Improving collaboration betweenIndustry and Government

2. The S&T Planning is closely aligned tothe economic planning priorities

3. Having companies that spend on R&Dand leading the application of thetechnology in the market-place

STI Management Best Practices

I i l S i S i T h l d I i







Checklist for Managing the STI Value Chain

Technology Management Best Practices – Framework

Role of Government

Political Commitment

Policy Integration S&T Advisory System S&T Development Planning and Coordination S&T Infrastructure Funding and Management of R&D Mechanism for Commercialisation of Research & Technology Integrated Human Resource Development Mechanism for S&T Enculturisation Smart partnership Practices

I t ti l S i S i T h l d I ti





Technology Management Best Practices – The Framework

Role of Business at the Marketplace

Business Commitment – Appetite for Technology Business and Investment Policy Integration ( niche technology

development Requirements) Business Advisory System Business Development Planning and Coordination (technology and risk

assessment) STI Related Infrastructure for Business at the Marketplace Funding for Technology Acquisition and Innovation (in-house,

Outsourcing) Mechanism for Commercialisation of Research & Technology Integrated Human Resource Development Smart partnership Practices

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