South Korea - Korean regional innovation systems

Innovation and technology are the key factors that underpin South Korea's export competitiveness and drive significant economic growth in the country

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over the past decades. The growth rate has been so impressive that East Asian countries have been exempted from being one of the poorest countries in the 1960s to become the world's 13th largest economy in 2014, according to the World Bank.

Why South Korea needs regional innovation systems?

Seoul recognizes that the need for developing new ideas and regional collaboration is now more important than ever. It was only when Korea introduced a regional political system for the first time in 1995 that it has begun to recognize the importance of regional innovation activities. Since then, the Korean central and regional governments have made a great effort to develop their regional economies in terms of technological innovation.

As of the end of 2016, there are 16 regions in Korea, including 1 special autonomous province, 6 metropolitan cities, 1 metropolitan autonomous city and 8 Province (Academy of Korean Studies, 2001). We can think of Korea has seven regions are metropolises and nine regions are provinces that are called as

“Do”. Metropolitan areas have traditionally been industrialized areas, as the Korean government has tried to bring up regional clusters. Among provinces, there are significant differences in the degree of economic development.

Kyonggi province has been developed remarkably well, based on its proximity to the capital, Seoul. The eastern regions of Korea, especially Kyongbuk and Kyongnam, have been much more developed than the western regions, e.g.

Chunnam and Chunbuk. Kangwon and Chungbuk have been less developed, as they are not suited geographically for industrial activities (NSO, 1998).

Developed regions, especially metropolises, were established by the central government’s effort to develop industrial clusters.

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However, it raised the problem of the geographical concentration of economic activities. However, nowadays many less developed regions have been also making a great effort to extend innovation potential in their regions.

They have prepared an organization in their regional administrations for regional S&T activities, increased regional S&T budgets, and tried to induce and establish research institutes in their regions (Chung, Lee, & Song, 1997).

How it works?

RIS consists of three innovative actors: universities; public research institutions; and industrial enterprises. In addition, the role of regional governments must be emphasized in order to effectively direct and coordinate innovative activities in each region. However, the actual participants in innovation activities are public research institutions, private companies and universities. Despite some overlap, they differ in the innovation process and make a significant contribution to enhancing the regional and national technical competitiveness. In public research institutions, government-sponsored research institutes (GRIs) and national laboratories (NLs) are important. As a proxy for innovation activities in private companies, we work with private research institutions. University of South Korea is very focused on education, university research institutions are incorporated into the measurement of innovation potential of the university sector.

What characteristics?

Approximately measure the innovation capability of the Korean regional innovation systems as a whole by the mapping of major innovation actors of 16 regions according to three major innovation groups and identify some

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characteristics as follows (Chung, 2002).

The Seoul metropolis has the most innovation actors, Research institutions accounted for 35% of Korea, Kyonggi and Inchon follow Seoul. Therefore, these metropolitan areas, i.e. Seoul, Kyonggi, and Inchon, owned research institutions in South Korea accounted for 64%, Provinces have relatively small number of innovation actors. In particular, Cheju, Kangwon, Chunbuk, Kwangju, and Chungnam have a small number of research institutes. However, some advanced provinces like Kyongnam, Kyongbuk, and Chungnam have relatively large number of innovation actors.

Regard to the public research sector, public research institutes are heavily located in Seoul, Kyonggi, and Taejon.

Some developed areas such as Busan and Kyongbuk lack public research institutions. It shows that their development is not based on technological innovation, but mainly low labor costs. Recognizing that public research institutions play an important role in basic research in academia and applied research in industrial enterprises, this weakness will hinder further development in these areas. In fact, the two regions have not succeeded in transforming their traditional industrial structures into high-tech fields, although in the past they have been very successful in low-tech fields, namely Busan's footwear and Gyeongbuk's textile industry.

Seoul University College is focused on the absolute tendency. Seoul has 36.1% of the university, followed by the Kyonggi Bridge 8.7%, Busan 8.0%

and 6.8%. Since the early 1990s, the number of university institutions has increased with the importance of the university sector in Korea's national innovation system. However, Korean universities are still in the initial stages of expanding their R & D potential compared to developed countries (Chung &

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Lay, 1997; OECD, 1996). However, university research institutes are relatively distributed among regions, as compared to innovative participants in other organizations. As a result, universities can be used as focal points for regional innovation activities.

Private research institutes are also concentrated in metropolitan areas and there is not much difference between the number of private schools in Seoul and in Kyonggi. The Seoul and Kyonggi areas have good R&D infrastructure and a relatively strong advantage in recruiting well-qualified research manpower. Therefore, Korean enterprises prefer these areas for the location of research institutes.

Recently, many regional governments in Korea have been exerting a great effort to establish their regional innovation systems. They have established an organization for S&T promotion in their administrations, increased their S&T budgets, and strongly promoted cooperation between innovation actors in their regions. Also the central government has supported strongly the effective formulation and implementation of regional innovation systems. However, Korean regional innovation systems seem to be weak, basically because of their short history. Innovation actors, especially public research institutes, are unequally distributed among regions, regional governments invest poorly in S&T activities, and there are weak interactions between innovation actors.

S&T’s importance in regional development has not yet been widely diffused among the regions. In addition, the major programs of the central government are concentrated on specific regions, i.e., Seoul and its outskirts.

The world today is an ear of mutually-beneficial and win-win cooperation.

Free trade zones are a good example, confirms that between countries and countries need to mutually-beneficial and win-win cooperation. Currently,

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China has 19 FTAs under construction, among which 14 Agreements have been signed and implemented already (CIECC, 2016). Moreover, the cooperation between regions within countries can also improve regional competitiveness.

The emergence and operation of The Beijing, Tianjin and Hebei Collaborative Innovative Community is an initiative which can make three regions together to develop and coping with challenges and crisis, has become an inevitable measure of economic growth and development (Han, Lian, &

Wang, 2016).

2.2.6 China- The Collaborative Innovation Community of Beijing-Tianjin-Hebei

The Collaborative Innovation Community of Beijing-Tianjin-Hebei is a steady-state system that is formed in the process of long-term formal informal cooperation andcommunication process between the industry and collaborative innovation models in Beijing-Tianjin-Hebei regions.

Industry is the most important economic unit in Beijing-Tianjin-Hebei, is also the model of the most direct behavior that participates in and achieves innovative value-added. Universities and research institutes are the source of innovation for new ideas, new knowledge and new technologies, also are incubators for varieties of educational, training and scientific research output platforms. The government is the key administrative force of the collaborative innovation community of Beijing-Tianjin-Hebei, also is the policy base and political security to create a regional innovation environment, promote the coordinated development of science and technology.

Why need it?

As a new type of regional community, The Beijing-Tianjin-Hebei

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Collaborative Innovative Community has its own connotation which is different from the previous community. The reason for creating such a community is based on multiple dimensions.

1. The Connotation of the Beijing, Tianjin and Hebei Collaborative Innovative Community

Through the previous review, we know the community is a carrier which multiparty contracts and can promote common development. The Beijing, Tianjin and Hebei Collaborative Innovative Community is a common development, mutual benefit and collective of Beijing, Tianjin and Hebei Province face the new century, manage the new challenge, overcome the new difficulties. From the connotation perspective, the Beijing, Tianjin and Hebei Collaborative Innovative Community are the cooperation mechanism, bridge and platform of Beijing, Tianjin and Hebei. What’s more in some ways it is a composite innovation of the community. Involved collaborative innovation of education, health care, economy, science and technology, finance, transportation, information, network, personnel, market and so on, these aspects of collaborative innovation is an important part of this system and an important component factor of the Beijing, Tianjin and Hebei Collaborative Innovative Community.

2. Reasons for the Establishment of the Beijing, Tianjin and Hebei Collaborative Innovative Community

First, the development of Beijing-Tianjin-Hebei region has become bottlenecks. Beijing and Tianjin to constantly rise urbanization level and bring a lot of problems, it is an important reason why need to create the Beijing, Tianjin and Hebei Collaborative Innovative Community (Su & Tu, 2013).

These problems including population congestion, air pollution, environmental

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degradation, urban development space constraints and so on. It is necessary to move the industries, population, administrative service centers of Beijing, Tianjin to the neighboring Hebei Province.

Second, in order to better play the strengths of three areas, each of them can complement each other's advantages. It is another important reason.

Beijing, Tianjin have technological advantages, industrial advantages, political advantages, it can bring the rapid economic and social development of Hebei Province. Hebei Province is close to Beijing and Tianjin, with a vast area waiting to be cultivated and developed, this advantage to absorb the Beijing, Tianjin and Hebei work together.

Third, in order to respond and implement China development, in addition to the reasons for the three regions, there are factors at the national level. Such as the current innovation, openness, coordination, sharing, green development concept requires that all parts of China must insist this development concept and Beijing-Tianjin-Hebei region is no exception. On the other hand, Beijing-Tianjin-Hebei regional integration has become a major trend and Beijing, Tianjin and Hebei to build a collaborative innovation community is imperative.

What benefits could it bring about?

Beijing, Tianjin and Hebei have their own advantages with high complementarity. Beijing possesses a powerful knowledge-based economy, modern manufacturing and service industries, etc.; Tianjin possesses processing and manufacturing industries, as well as sea transportation, while Hebei has a heavy chemical industry, as well as an iron and steel industry and abundant resources. Enhancing the further cooperation of Beijing-Tianjin-Hebei region will be more conducive to realizing a reasonable labor division, complementing

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each other and enhancing overall regional competitiveness.

Enhancing the driving effect of urban agglomeration to boost the development of peripheral cities:

From the aspect of the industrial development stage，Beijing is already in the post-industrialization stage, being about to finish the concentration stage of economic resources and enter the stage of outward boost. Tianjin is in the concentration stage of economic resources, and the later stage of industrialization. Hebei Province is in the middle stage of industrialization, where conventional industries make up a great proportion. Different industrial development stages of Beijing, Tianjin and Hebei could accelerate the formation of a close cooperative relationship. The three regions could, in accordance with their own resource endowment, set up graded industries which could develop in coordination, and enhance coordination in industrial spatial distribution and industrial chains cohesion. Thus, trans-regional industrial clusters with close industry cooperation and a clear division of labor could be gradually formed. The integrated Beijing-Tianjin-Hebei would benefit many regions, among which Hebei could benefit most. Moreover, it would also boost its neighboring regions, including North China, Shandong, Anhui and three provinces in Northeast China, and significantly improve their overall competitiveness. The backward northwestern region would also obtain interests from the spillover effect of transferred industries of Beijing and Tianjin.

Promoting industrial transfer and undertaking and optimizing the industrial structure:

With respect to industrial transfer, these three regions have sufficient potential in industrial transfer and adjustment due to their imbalance in development. Beijing will transfer the non-capital functions, such as a scientific

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research institute, manufacturing and other industries, to other regions while enhancing its political center, international exchange center, cultural tourism center and other capital functions. This will mitigate the excessively increasing population, traffic congestion and environmental deterioration. Extending the industrial chains of Tianjin’s manufacturing industry to the periphery of Hebei region will allow Hebei to undertake Tianjin’s heavy chemical industry and take full advantage of its industrial strength.

Beijing and Tianjin will transform their urban functions, including transferring economic functions to the peripheral areas to help Hebei achieve rapid growth. Hebei could then prioritize certain industrial clusters in accordance with its own industrial distribution, while undertaking the industries transferred from Beijing and Tianjin. In addition, it should transfer the outdated and eliminated low-end industries to the lower-ranking cities and development zones. Last but not least, it should accelerate the development of tourism, leisure industry, aging care industry and other industries of counties and cities around Beijing.

Focusing on the urban agglomeration around Beijing and Tianjin, we aim at perfecting rail transit and supporting service functions, establishing a

“Two-hour Economic Zone” and creating the urban integration of “One city for working, another one for living”. Implementing the national strategy and establishing the 3^rd economic growth pole of China:

Having been listed as a national strategy, the coordinated development of Beijing-Tianjin-Hebei region is an important part of the regional and urban clusters plan, aiming at creating the 3^rd economic growth pole of China.

On the one hand, with the rapid development of the Yangtze River and Pearl River Deltas, international merchants have to pay more cost in land, labor

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and infrastructure in these two regions, so they are investing more and more capital in northern China. At the same time, inter-regional industrial transfer is accelerating, and China highly values the integration of Beijing-Tianjin-Hebei.

As the core of the economy of northern China, Beijing-Tianjin-Hebei region is irreplaceable in the national regional plan, competent to be the 3^rd economic growth pole of China.

On the other hand, rapid development of new-type urbanization makes the cities’ stimulating effect on peripheral areas increasingly prominent. The metropolitan cluster has been gradually formed and will become a significant growth pole boosting regional development in China. With its special location, economic strength and scientific potential, Beijing-Tianjin-Tianjin Urban Agglomeration, the capital urban agglomeration, takes inter-collaboration and reasonable development as its crucial core.

Confirming the functions of Beijing, Tianjin and Hebei to promote their balanced development:

The coordinated development of Beijing-Tianjin-Hebei region is urgently needed for the transformation and development of the three regions. Though the three regions have reached a preliminary consensus on cooperative development, they have not clarified their functions, drawn a clear line in the interest relationship, perfected a coordinated mechanism, nor yielded sufficient coordinated development power.

Beijing is already overburdened by its special status as the capital, an increasingly expanded city scale and pressures from traffic and environment.

Therefore, transforming from a multi-function capital to a single-function capital is imperative. This transformation will inevitably cause a significant change to Beijing’s industrial structure, and thus exert an influence on the

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industrial distribution and coordination of Beijing-Tianjin-Hebei Urban Agglomeration, requiring a reasonable plan, coordinated development and close cooperation in the Beijing-Tianjin-Hebei Region.

Though Tianjin has been defined as the economic center of northern China by the State Council in the approval of The Overall Plan of Tianjin in 2006, it has not made full use of this advantage. This is because of the slow progress in transforming urban function with Beijing and some overlap in the position of financial center and “Headquarters Economy” city, modern manufacturing industry, R&D and other fields. Meanwhile, with the rapid development and increasingly expanded scale of Beijing and Tianjin, Tianjin gets more pressure on infrastructure, the environment and other aspects. Tianjin therefore urgently needs to transform the urban functions and position, and industrial structure, as well as to seek support and cooperation from peripheral areas.

Lacking metropolises with strong integrating and expanding capacity, especially a trans-provincial or trans-regional economic metropolis, Hebei doesn’t have a highly-concentrated degree of production elements and hasn’t formed urban clusters which are powerful enough to promote the economy.

Compared with Beijing and Tianjin, Hebei always stays in a subordinate position, so Hebei should actively undertake the industries transferred from Beijing and Tianjin, and take full advantage of its industrial superiority to establish industrial clusters. In addition, it should achieve close cooperation with Beijing and Tianjin through a reasonable division of labor in the industrial chains.

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