1. page 1 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 page 1 Thematische Einf ü hrung: IT als sektorales Innovationssystem in Ostasien – Projektbeispiele aus dem Fraunhofer ISI Dr. Thomas Stahlecker Fraunhofer ISI Seminar Angewandte Wirtschaftsgeographie (HS) WS 2006/2007: Nationale und regionale Innovationssysteme im internationalen Vergleich: Strukturen, Herausforderungen, Politik 12 Januar 2007, Hannover

2. page 2 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 Agenda (1)Aktuelle Entwicklungen in asiatischen NEMs im Überblick (2)IT bezogene Innovationspolitiken in Asien: allgemeine Rahmenbedingungen (3)IT als sektorales Innovationssystem am Beispiel Südkorea (4)Politische Maßnahmen im Ländervergleich (5)Mögliche Übertragbarkeit "erfolgreicher" Politikansätze auf Europa

3. page 3 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 BIP-Wachstum (real) 1995-2007 Quelle: 1995-1998 UNESCAP (2006), 1999-2007 World Bank (2006)

4. page 4 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 Exportanteile von Gütern der Spitzentechnik an allen Güterexporten 19951998200020022004 China12,916,920,626,632,3 South Korea29,328,238,135,635,9 Singapore61,562,663,660,458,8 Taiwan30,535,74138,835,2 Hong Kong21,82326,431,336,8 Japan25,723,824,721,720,2 Quelle: eigene Berechnungen basierend auf WTO Internationale Trade Statistics

5. page 5 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 Asian Knowledge economies: selected indicators 1995/2004 ChinaSouth Korea SingaporeTaiwan 19952003/ 2004 1995 2003/ 2004 19952003/ 2004 19952003/ 2004 GERD as % of GDP0,61,2 2,4 2,6 1,152,25 1,82,5 BERD as % of GERD43,757,6 73,7 72,5 64,554,2 56,363,6 Knowledge Economy Index2,95,0 7,5 7,8 8,27,8 8,28,0 Researchers / mio population464633 2.184 2.979 2.4824.352 3.1213.937 Patents granted / mio population0,10,5 27,5 97,0 17,3111,8 98,1318,5 Quelle: World Bank, OECD MSTI, UNESCO Institute for Statistics

6. page 6 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 Net exports of selected high technology items (million US$) 19951998200020022004 China Electronic data processing and office equipment 1.9455.9547.78019.13457.469 Telecommunications equipment 7933.2937.09517.86743.870 Integrated circuits and electronic components -2.583-5.945-15.804-27.890-58.271 South Korea Electronic data processing and office equipment 1.3973.45211.92210.95815.657 Telecommunications equipment 5.8184.9948.53415.24030.195 Integrated circuits and electronic components 9.5356.8054.218-1.5911.385 Singapore Electronic data processing and office equipment 15.78217.25814.43611.94712.145 Telecommunications equipment 3.7632.0821.3961.220694 Integrated circuits and electronic components -2.9921.0423.8805.28510.706 Taiwan Electronic data processing and office equipment 13.71816.76918.99915.50413.345 Telecommunications equipment 4.2751.8292.1483.8916.340 Integrated circuits and electronic components -5.274-4.892-1.973-3.497216 Quelle: eigene Berechnungen basierend auf WTO International Trade Statistics

7. page 7 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (2) ICT Policy mixes in Asia: general characteristics In most of Eastern and Southeastern Asian countries, the state manifests itself prominently in business life, beyond the degree of interference known from Western countries Government influences in forcing or even "engineering" the entry of firms into export markets and then into high-technology sectors (Mathews, 2002); e.g. South Korea, Taiwan: Import substitution, Export diversification, Technology transfer Macro policies: Adoption of an open economy policy emphasizing free trade (Liberalization and deregulation in the 1990s), comparatively free movement of capital, welcoming FDI in export-oriented manufacturing and provision macro-economic stability Sectoral programs and complementary policies since the early 1990s with the aim to strengthening certain elements of ICT NIS: public R&D support (basic and applied research), technology infrastructure, investments on education/training, campaigns to increase ICT usage

8. page 8 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (2a) ICT Policy in selected Asian countries compared I South Korea SingaporeTaiwan Export-oriented industry policies in the 1960s/70s (export-diversification) 1st phase (of industrialisation): government strongly supported the development of national competitive industries, rather than FDI 2nd phase (high-technology development in the 1980s): FDI, technology transfer; "integrated" ICT for development master plan as early as the 1980s 1990s: Launching the Korea Information Infrastructure Plan (KII) 1999-2002: Cyber Korea 21 2002-2007: e-Korea vision 2007 Example for a successful dirigiste policy that has direct business involvement (quasi-state enterprises: banking, logistics, services etc.), controlled by govern. Investment holding companies Direct government intervention to coordinate technological development and diffusion in the IT area (institution building for ICT R&D e.g. ITRI, R&D consortia), investing in training

9. page 9 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (2a) ICT Policy in selected Asian countries compared II Malaysia ChinaIndia Technological adaptation from abroad, strong focus on FDI and technologies from abroad; India: restrictive import-substituting policy regime until the 1980s Government plays an active role in promoting ICT development; National IT Agenda (NITA) launched in 1996 serves as main policy statement for ICT Specific initiatives like the Multimedia Super Corridor (1995), Network of Rural Internet Centres (~2003) Transition from low-tech to high-tech production Massive investments in ICT infrastructure in the 1990s High-tech zones Standard-setting Since the early 1990s economic reforms that lead to the restructuring of the ICT sectors (Bangalore cluster as successful regional example); current IT Action Plan furnishes 84 policy instruments for IT industry, IT research, IT human resource development etc.

10. page 10 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (4) National ICT policy in Korea I Government Push: e-Korea - The Master Plans for Informatization Title Basic Informatization Promotion Plan Cyber Korea 21E-Korea Vision Broadband IT Korea Vision 2007 IT 839 Strategy Period 1996-20001999-20022002-20062004-2007 Vision Attain world- class informatization levels by 2010 Build a leading knowledge- based society (overcome the Asian economic crisis) Build e-Korea as the global leader; maximise the ability of all citizens to use ICTs Realize "digital welfare society"; Broadband Convergence Network project; leadership role in emerging technologies "We need to be at the forefront of the digital revolution which is characterized by "digital convergence" and "ubiquitous" (MIC 2003)

11. page 11 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (4) National ICT policy in Korea II Government's role: organizational and legal arrangement Korea's ICT policies are shaped, promoted and implemented by several responsible bodies (e.g. MIC, NAC, IPC) IPC chaired by the Prime Minister with ministerial-level officials from allmost all of the governmental ministries Since April 2004, the Presidential Committee for Government Innovation and Decentralisation carries out the President's agenda (e-government as a strategic tool, special committee for e-Government) ICT supporting measures: R&D programmes The Informatization Promotion Fund (IPF) as the main financing vehicle for ICT R&D IPF primarily gets revenues from spectrum licences and taxes on telecommunication operators; rather than putting it into the government's general budget, these funds are strategically reinvested in the telecommunications and ICT sector (fund holds US$ 5bn) The Korean government has contributed about 10-15% to total R&D investment in ICT each year; in addition to IPF, three other public R&D programmes

12. page 12 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (4) National ICT policy in Korea III Key success factors of Korea's ICT sector Establishment of a comprehensive informatization promotion framework and system Establishment of a vision for the information society in response to the changes in the environment Upgraded information infrastructure Strategic investments in key sectors, effective financing and promotion of market competition Cultural compatibility with information technology

13. page 13 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 Übersicht wichtiger IT bezogener Politikmaßnahmen in Asien ChinaIndiaKorea Singa- pore Taiwan Direct R&D funding Technology transfer, PPPs and network support Incubators and innovation clusters Skills and training initiatives specific to the ICT sector Government coordination Provision of Venture Capital for ICT firms (start-ups) Inward investment support Trade support and export market situation Strategic intelligence (on national/regional level) + +++ ++ +++ + +++ ++ + ++ +++ + ++ + +++ ++ +++ ++ +++ + +++ + +++ ++ +++ hohe Politikrelevanz ++ mittlere Politikrelevanz + niedrige Politikrelevanz

14. page 14 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) Mögliche Übertragbarkeit "erfolgreicher" Politikansätze auf Europa Vision building and focussed strategies, carried by top-level representatives Identification of technological strengths and innovative potentials in the public research institutes and the business sector Identifcation of national centers of excellence in ICTs and provision of financial means to "strengthen the strengths" Developing or selection of new technology-transfer models in general and new approaches for developing Public-Private Partnerships (PPPs); the establishment of university-industry research centers (UIRCs), with the aim to bridge the gap between basic research and industry or applied research, as one approach? National campaigns with regard to ICT related education, qualification and sensibilisation ("digital divide") Public procurement of ICTs: the government as a lead market? Improvement of governance coordination on (and between) the different policy levels (multi-actor, multi-level policies)

15. page 15 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (1) Main research questions in relation to WP7 Which of the "ingredients" or critical factors are the result of a policy or could be reinforced by policy action? Under what political conditions do ICTs participate in the transformation of the economy? Under what political conditions do other sectors take advantage of ICT? What role is played – and under what political conditions – by mature and edge (ICT) technologies, R&D and innovation, public and private financing in the transformation of the economy? Which lessons can be learned from the European perspective?

16. page 16 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (3) National ICT policy in India I Policy on Computer Software Export, Development, and Training (1986) World Market Policy (1988) Information Technology Action Plan (1998) Allowance of import of foreign software into the country for the first time (with 60% tariff) Focus on software development reform for export; establishment of the Telecommunications Regulatory Authority of India; privatisation in telecommunications sector, more broad ICT approach Elaborated by a new National Task Force; three basic objectives: acceleration of IT infrastructure, increase of IT exports, increase of IT penetration and awareness ("IT for all by 2008") ICT policies in context: form a restrictive import-substituting policy regime in the 1980s to an ICT world market policy in the 1990s

17. page 17 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (3) National ICT policy in India II Key policy initiatives Establishment of the Ministry of Communication and Information Technology (MCIT) in 1999: integrating existing government agencies in charge of IT. Software Technology Park Policy (STP) (since 1990): a 100% export oriented scheme for the development and export of software. STP can be a virtual software devlopement unit or an infrastructure complex. First STPs established in Pune and Bangalore. Foreign equity up to 100% permitted; exemption of software and IT services exports from taxes. "Operation Knowledge" as a national campaign focusses on computer literacy and broad use of computers and IT in education; set up of different institutions: a National Council of IT Education, Indian Institutes of Information Technology, Institute for Computer Professionals of India etc. E-governance projects: Establishment of a National Institute of Smart Government and National Informatics Centre to support e-government implementation or e-government support to ministries

18. page 18 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (3) National ICT policy in India III Key initiatives for ICT innovation Establishment of a high level institutional framework in order to coordinate and foster research, design and development (RD&D); crucial actors: government with active participation of industry. Establishment of a non-governmental, autonomous Information Technology Development Board. Tasks: identification of Information Society projects, encouragement of collaboration between academia, RD&D organisations, IT industry, project funding and establishment of funding mechanisms. Measures for support of RD&D manpower such as minor IT education by all undergraduate and postgraduate colleges, qualification of industrial R&D staff, support of exchange between academie and industry. Establishment of inter-department committee for the formulation of policy and programmes to adopt national standards for Information Technology.

19. page 19 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (3) National ICT policy in India IV Lessons learned from India The Indian government heavily stimulated ICT industries by its large demand (28 percent of total IT spending can be attributed to government and public sector expenditure); this was followed by an increase of ICT sector's domestic activities with a high impact on the domestic economy. A further key factor in India's ICT development are the public-private partnerships initiated by the Ministry of Information Technology. Development of an international competitive software industry as a strategic policy goal National ICT policies are supplemented by ICT policies of the Indian states (huge differences in the development of the states)

20. page 20 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (5) National ICT policy in Singapore I Singapore has relied almost exclusively on foreign direct investments (FDI); particularly Transnational Companies (TNCs) have enabled the country to move to advanced manufacturing in the 1980s/90s National IT plan (1986-1991) IT2000 (1992-1999) Infocomm 21 (2000-2003) Connected Singapore (2003-present) Provision of one- stop services through cross- agency linkages. Public services using IT to automate traditional manual administrative processes Position Singapore as a global IT hub; construction of a high-speed nationwide broadband network (Singapore ONE), forging of intern. alliances with industry leaders Develop Singapore into a global infocomm capital (e- economy, e- society); the plan included multiple strategic thrusts (e.g. promoting e- business, gov. service online) Current blueprint continues to build on the Infocomm plan; it sees infocomm as a key enabler to create new business opportunities, consumer value and cultural experiences Singapore's National ICT strategies

21. page 21 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (5) National ICT policy in Singapore II The Infocomm Development Authority (IDA) as a key player Primary focus on developing suitable policies and initiatves for the telecommuni-cations and IT sector (Activities: 1. Outreach to residents and companies to promote the use of information and networking technologies, 2. Promotion and development of S's info-comm industry itself, 3. Outreach beyond S's borders to stimulate investments and provide an outled for exports) IDA pursues these activities through organized and well-funded programmes to proactively subsidize and sponsor the development and adoption of new technologies, apllications, services and business models.

22. page 22 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (5) National ICT policy in Singapore III Key national initiatives within the context of "Connected Singapore" Infocomm for Connectivity, Creativity and Collaboration (promoting the development of useful applications for work, play, lifestyle and learning; promoting of infocomm literacy) Digital Exchange (develop S. as a leading global digital distribution and trading centre of digital content, products and services) Engine of Growth (strategy aims to create new economic activities by developing innovation capabilities and encouraging technology development, expanding access to overseas markets) Agent for Change (this strategy aims to help businesses and government agencies use infocomm to achieve higher efficiency, effectiveness and customer satisfaction)

23. page 23 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (5) National ICT policy in Singapore III Source: IDA Singapore

24. page 24 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (5) National ICT policy in Singapore IV Other government initiatives in the last couple of years E-Government action plan (launched in July 2003) with the aim to transform the public service into a networked government (plan was valued at S$1.3bn) "E-Lifestyle": National IT Literacy Programme to equip Singaporeans with basic ICT literacy skills Number of initiatives have been launched to encourage greater business adoption of ICT and e-commerce and e-business) Mobile commerce: developement of a nationwide mobile payment platform Government promotion of VC industry: establishment of a US$1 bn Technopreneurship Fund under the Technopreneurship 21 Initiative

25. page 25 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) National ICT policy in Taiwan I Direct government intervention to coordinate technological development and diffusion in the IT area (institution building for ICT R&D e.g. ITRI, R&D consortia), massive investing in training. Institutional system of Taiwan's ICT sector well adapted to the needs of the private firms as well as to changing market conditions. Ministry of Economic Affairs (MOEA) and the National Science Council (NSC) as the two most important government planning bodies. The Industrial Technology Research Institute (ITRI) was established in 1973 under MOEA's supervision to conduct research on civilian industrial technologies.

26. page 26 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) National ICT policy in Taiwan II The Challenge 2008 National Development Plan The Plan was finalised in 2003 and formulated the vision to transform Taiwan into a "Green Silicon Island" The vision has become the main national development policy and is being implemented by all ministries According to the plan, massive investments will be made by the government in the digital content industry over the next five years. Investments will be targeted at four areas – digital learning, video and multimedia, digital animation, and computer games.

27. page 27 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) National ICT policy in Taiwan III The e-Taiwan Project The e-Taiwan Project is a six years National Development Plan with the purpose to promote the application of the internet to establish Taiwan as an e-oriented and high-tech island. The goal the of e-Taiwan project is to reach 6 million broadband users in 2007 (funding of NT$36.6 bn from 2002-2007) The main propositions are (1) provide the government with electronic service, (2) simplify online trade convenience and develop a barrier-free internet user environment, (3) setup the internet in librariers in every community and provide free training programmes on internet skills, (4) subsidize funds to support ICT training programmes for students in elementary and middle schools in rural areas, low-income households, farmers and aborigines.

28. page 28 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) National ICT policy in Taiwan III Source: NICI (2005): The Vision of e-Taiwan The vision of e-Taiwan

29. page 29 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) National ICT policy in Taiwan IV The m-Taiwan Project The central aim of the m-Taiwan Project is to shift Taiwan from an "e-nation" to an "m-nation", to realize the Taiwan vision of "Mobile Taiwan". The m-Taiwan Project is expected to beef up the wireless networks, integrate mobile phone networks, setup the optical-fiber backbones and create an "ubiquitous network". Three core aspects of the project: 1. m-life: m-social well-being, m-communities, m-entertainment, m-health care 2. m-services: complete the basic infrastructure in Taiwan (e.g. broadband channel, fiber optic connections) and bring convenient mobile services to everyone 3. m-learning: creating a new wave of lifelong e-learning beginning at schools Multi-level project with a budget of NTD37 bn dollars in five years

30. page 30 Thomas Stahlecker Seminar Angewandte Wirtschaftsgeographie WS 2006/2007 (6) National ICT policy in Taiwan V Key success factors of Taiwan's ICT sector Accoring to Kraemer et al. (1996), Taiwan's success in ICT has been due to a coordinated government strategy to support private entrepreneurship by a large number of small, flexible, innovative companies ("two-way relationship between environment and policy"). The government has closely complemented the activities of the ICT companies in the international markets by carrying out R&D and transferring technology to the private sector. Multi actor national innovation system: multitude of government planning and coordination bodies (MOEA, NSC, NIIA) as well as other important institutions (e.g. ITRI, the Institute for Information Industry (III), the Hsinchu Science-based Industry Park) Human capital development or the provision of highly skilled workforce as a key success factor of Taiwan