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Science & Technology
Policy Institute

Horizontal Module
on Conceptual Work

OECD SS Workshop

August
22
-
24, 2011

Seville, Spain

Jeong Hyop Lee, Ph.D


Elaboration of the Concept


Scientific and Holistic Approach

Contents

Elaboration of the Concept

1

1.
Background

2

During the 37
th

TIP meeting and also at the Leuven
workshop, a certain concern was shared among the
participants, which is ambiguity of the concept. This is
related with elaboration of the concept and its
operationalisation

for further analysis, which will be discussed
in the
Horizontal Module 1
:

Elaboration of the Smart
Specialisation

Concept
.

2. Evolution of the SS Concept

3

Continuously loosing
competitiveness of

EU regions/states

Conception of Smart
Specialisation


Entrepreneurial discovery process


Spatial distribution of SS dynamic processes between basic
invention regions and application regions

Local
contextual
-
ization

Platforms for
collectiveness

Collective networks of
regions/states


Grand challenges beyond individual region/state


Fiscal constraints due to financial and macro
-
economic
crisis


European Cohesion Policy


Place
-
based Policies

3. Issues

4


Differentiation
from Related Theoretical
Concepts


Cluster, Regional Innovation System, etc


Dynamics of Innovation, Role of Institutions,
Regional Development, Culture, Inter
-
actor
Relationships, Interaction with Environment


Operationalisation

of the
Concept



Analysis Target, Unit, Contents, etc


Economic Rationale

Scientific and Holistic
Approach

5

1. Searching for Alternative Approaches

6


Based on a whole policy target unit diagnosis
of framework conditions in a very rapidly
changing and uncertain environment



Identification of goals


Appropriate organizational arrangement


Operation model


Governing mechanism of the system


Legal and macro institutional framework

2. Western Scientific and Eastern Holistic Approach

7

Strength

Weakness


The Western approach, which
has achieved scientific analytical
capacities and developed
individual disciplines, has the
strength to develop competitive
strategies.


Its approach is based on the
segmentation of the system and
focusing on the causal or
correlation relationship between
two components of the system.


If it is a time
-
series analysis, it
predicts based on the previous
pattern.


周楳T獣楥湴楦楣i慮慬祳楳Ⱐ桯h敶敲Ⱐ
楳i污捫楮朠瑨攠捡t慣楴a t漠
潶敲癩敷⁴ 攠e桯汥⁳祳t敭⸠e


周楳T慰灲o慣栠桡猠愠捥c瑡楮
灬慵獩扬攠灯p敲⁷桥渠h桥h
environment is reliable and
expectable.


䅳A瑨攠敮癩t潮浥湴m捨慮来猠
牡灩摬礠慮搠瑲慮獦潲浡瑩潮 o映
瑨攠獹tt敭e楳⁡扲異iⰠ瑨攠
W敳e敲渠慰灲o慣栠汯獥猠瑨攠
capacity to deal with them.


In particular, the challenges we
are faced with nowadays require
more comprehensive approaches.

2.1 Western Scientific Approach

8

Strength

Weakness


The Eastern approach, which
sees the universe and globe as
an organism, has strong
potential to diagnose the
challenges as a whole and to
build platform on which various
stakeholders are to be induced
to take part in the process.


This approach has special
strength to deal with challenges
in a complex and changing
environment.



I琬t桯h敶敲Ⱐ污捫猠瑨攠獣t敮瑩晩挠
慣捵牡捹⁴漠灲潶攠慮搠摥獩杮s
the process.

2.2 Eastern Holistic Approach

9

Approaches

Shortages

Inter
-
Disciplinary
Approach

Combination of two or three independent
approaches cannot guarantee coverage of
the whole issues of the challenges, as the
challenges becomes more complex

Institutional
Approach

Just a recombination of the identified
subsystems in a certain environment

Evolutionary
Approach

Quite strong to describe the evolution in
a certain environment; not good for
diagnosis

Cf. Cybernetics, Intellectual Governance

10

<
The Geography of Thoughts
by Richard E.
Nisbett

(2004)>

Western

Eastern

Syllogism

Tao

Sense

of Self

Social Life

Envisioning

the World as a
part

Envisioning

the World as a
whole

Causal Attribution

Causal Modeling

Categories

and Rules

Relationships and Similarities

Logic and the

Law of
Contradiction

Dialectics and Middle Way

11

Western Approach

Eastern Approach

Diagnosis

Ear buzzing has a
complex symptom with
many reasons.

Various tests to identify
reasons and

blood circulation
figured out as main
reason

In a stressful environment, the blood vessel
shrinks to provide more blood to the brain
and, as it continues, the body understands the
shrunken vessel as a normal status. In a non
-
stressful environment, sufficient blood cannot
be provided and the auditory organ
malfunction and cannot detect the vibration.
The human body also lacks energy to circulate
the blood because of the sustained stress.

Prescription

Medical prescription to
accelerate the blood
circulation

Acupunctural treatment to extend the
shrunken vessel and herbal medicine treatment
to revitalize body energy and recovery of ear
sensing capability with acupunctural and
medicine treatment after the first two
treatments.

Result

The symptom was
relieved shortly and
temporarily but became
worsened.

Smooth recovery with more than 18 months of
treatment.

<Comparison
of Western Approach and Eastern Approach on Ear Buzzing
Phenomenon>

3. Korean Experiences

12

1960s

Framework
Conditions

No natural resources/poor domestic
market and no FDI/only diligent, cheap
and well motivated human resources

Diagnosis
-

Based
Goal

Export promotion

Prescription

Job training and macro
-
economic
institutional settings such as currency rate
manipulation, bank loan, etc to boost up
the export promotion

Results

Dramatic increase of export from USD$100
million in 1960 to USD$ 363.5 billion in
2010

13

1970s

Framework
Conditions

The structural weakness of a labor intensive industry for sustaining
industrial competitiveness/Absence of technology, human resources
and investment fund for industrial deepening

Diagnosis
-

Based Goal

Promotion of six heavy and chemical industries

Prescription

Creation of government research institutes (GRIs) and repatriation
of overseas Korean researchers and engineers for technology
absorption and dissemination from overseas to domestic private
sectors.

Project
-
based operational models of GRIs to activate the close
relationship with private sectors

Cultivation of high caliber engineers through establishment of
KAIST.

Strong government engagement and financing schemes to invest
in the major strategic industries including compensation money.

Results

In 2010, Korea’s POSCO was ranked as the world’s #1 steel and
iron company, automotive industry was ranked fifth worldwide,
petrochemicals comprised 7.6% of exports, machinery occupied
7.7% of exports and electronics totaled 25.1% of its exports.

14

1980s

Framework
Conditions

Technology protectionism after oil crisis of late 1970s/wide
recognition of R&D investment for private companies
competitiveness

Diagnosis
-

Based Goal

Promotion of private R&D investment

Prescription

Research consortium of private companies, GRIs and
universities by national R&D program (1982), Information
& Communication Technology Program (1988)

Private R&D Promotion Schemes; R&D Tax Support (1981),
Private Research Center Certification (1982), Tariffs Reduce
on Research Materials (1983)

Results

Less than 20% R&D investment from private sector in
1980 to more than 80% in 1990

In 2010, Semi
-
conductor comprised 11% of
exports/Display 6.4% of exports /Mobile phones 5.9% of
exports

15


Identification of goals: export promotion in 1960s, heavy
and chemical industrial promotion in 1970s, and promotion
of private R&D investment


Appropriate organizational arrangement: government
research institute for mission research in 1970, research
consortiums in 1980s


Operation model: project
-
based operation model of GRIs in
1970s, research management and evaluation system in
mid
-
1990s


Governing mechanism: top
-
down and hierarchical process
of decision
-
making and implementation in 1970s and 1980s,
sophisticated inter
-
ministerial coordination only in 2000s


Legal and macro institutional framework: currency rate
manipulation and further financial support and bank loan
assistance from government for export promotion in 1960s,
various laws, plans and programs in 1970s,1980s

16

GRIs since 70s

Large companies
since 80s

Universities

since 90s

Technology SMEs
in 2000s

1997 Asian
financial
crisis

Restructuring
&
privatization

2008

Global
financial
crisis

Global
warming &
natural
disasters

Excessive
investment

&
globalization

Green growth

New growth
engines

Public welfare

Regional
innovation

Expansion
of class
disparity

Expansion
of regional
disparity

Capital Region
and Seoul
-
Pusan
axis development

Autonomous
local government
system

OECD DAC
Accession
in 2010

Global S&T
leadership

Science & Engineering Crisis
led by mass research lay
-
off

New HRD

Technology
SMEs &
finance

Inter
-
ministerial
coordination
governance

Global
dimension

Local
dimension

Basic &
fundamental
research

Innovation
-
driven STI

Limits of Catch
-
up
model

Technology
spin
-
offs

Quality of Life
Awareness

Technology &
Market
Uncertainty

STI conditions and issues in 2000s

4. ANDI case

17


Africa is vulnerable to many types of diseases that much of the international
community


in particular, pharmaceutical companies


neglects or ignores and, as
a result, prone to deaths of countless people in the nation.


In response to address the needs of neglected diseases throughout Africa, the
African Network for Drugs and Diagnostics Innovation (ANDI) was established in
October 2008 in Abuja, Nigeria.


The ANDI Secretariat and Central Office is located in Addis Ababa, Ethiopia and
hosted by the United Nations Commission for Africa (UNECA). ANDI is seeking to
create regional hubs in each of the five regions of Africa in order to support
implementation of the organization’s activities throughout the continent.
In 2011
thirty two centers of excellences (COEs) were chosen among the one hundred and
seven applicants to collectively deal with the neglected disease issues in Africa.


To address this need, the ANDI seeks to increase research and development
collaboration among African nations and institutions including through the
management of portfolio Center of Excellences (COEs) in health innovation and
projects; fund and manage a portfolio of health R&D projects; support and
promote the establishment of public
-
private partnerships, new firms within Africa
to support the research, development and manufacture of new drugs, diagnostics
and other health
-
related products including those based on traditional medicine.

18

Suggestions

Goal

Social entrepreneurship promotion in the area of
drugs, vaccine, diagnostic device, traditional
medicine
,

etc
.

Organizational
Arrangement

Pan
-
African scientific and engineering resources
pooling

Operational Model

Reinvestment business

model

Policy Programs

Regional hub programs

Governing Schemes

Platform initiative with architectural capabilities of
collective bargaining power to set up legal
framework

Legal/Institutional
Framework


Other areas include the generating and managing intellectual property and exploring
innovative mechanisms to encourage and reward local innovation while promoting
access including research based on traditional medicine and promoting long
-
term
economic sustainability through supporting R&D and access to health products in
Africa.

5. Conclusion

19


The holistic approach
as
appropriate tools to deal with policy
designs to formulate and maintain the collective networks of
regions/states to tackle with global
challenges


The holistic
knowledge and
approaches
cannot be easily
segmented, scientifically verified and codified by which
knowledge and experiences can be accumulated and
transferred to the next generation and other groups.


The
Western approach has strength to segment, verify and
classify knowledge and experiences for accumulation and
education.


The weakness and strength of the two approaches need to be
harmonized to prepare the policy and governance design of
smart specialization as collective networks of regions/nations
to overcome the global challenges.

Thank you for your
attention!