By Jun Yeup Kim, Kyung Hee University, presented at the 17th TCI Global Conference, Monterrey 2014.

1. Future Cluster Policy in Korea:
Towards Global Collaboration Cluster Program
Jun Yeup Kim
13 November 2014

2. FUTURE CLUSTER POLICY IN KOREA:
TOWARDS GLOBAL COLLABORATION CLUSTER PROGRAM
PROF. JUN YEUP KIM

3. ISSUES IN CLUSTER?
Building capacity in sustainability
Hardware + software building in region-centric
approach or sectoral approach?
Talents? (Mathew 25:14-30)
Delivery mechanisms?
Cluster and the role of government organization ?

4. PRODUCTION, INFORMATION COSTS AND
ECONOMIC ORGANIZATION
“Conceiving competition as the exchange of knowledge
or information about qualities indicates that the firm is
device for enhancing competition among set of input
resources” (Alchain and Demsetz, 1972, p.795)
- These input resources can foster collaboration!
- Hence, the main idea is about the relationship between
firms and their environment, encompassing all the
institutions competing and collaboration

5. THE CONTEXT OF CLUSTER POLICY IN KOREA
Regional and Industry level?
Role of Government Organization?
- Dynamic brokerage process of regional and industrial
clustering
- Spill over of technological activity become more useful
when there are networking coordinators in nodes and
linkages
- Trinity of Cluster policy in Korea?

6. THE DIRECTION OF CLUSTER POLICY IN KOREA
The ultimate goal is to
strengthen the
industrial
competitiveness
through enhanced
interconnection
between the industry
and the technology
R&D sector in the
region

7. SHIFT FROM ‘INDUSTRIAL COMPLEX’ TO
‘INNOVATIVE CLUSTER’ IN KICOX POLICY

8. OVERVIEW OF KOREAN CLUSTER MODEL
Toward World-class Industrial Clusters that drive development of Korean
Economy
Vision
Mature (’13~’16)
Formation (’05~’08)
Growth (’09~’12)
Objectives Innovative Cluster with Open
Network
Construction of industrial
Cluster base
Individual Industrial Complex
(7→12)
Scope
Activation of Cluster Network
Regional Industrial Complex
(25 Hub, 168 Linkages)
National Industrial Complex
(All industrial complex)
Korean cluster model
Customized development
Strategy
Pan-Regional industrial cluster
Activate global network
Strengthen Network Activities
Autonomous grassroot
industrial ecosystem
Construction of Industry-University-Research Institute Networking ▷ Mini-cluster activities
Activities Pan-Regional cluster policy ▷ Strengthen R&D Capability (Theme Cluster activities)
Enterprise consulting Program ▷ SME’s Business Strategy, Financial Plan, Technology Development
자료) 한국산업단지공단(www.e-cluster.net)

9. 17 TH TCI GLOBAL CONFERENCE | CREATING SHARED VALUE THROUGH CLUSTERS FOR A SUSTAINABLE FUTURE

10. IMPORTANCE OF INDUSTRIAL CLUSTERS IN KOREA
Regional Manufacturing output share in Industrial Cluster is average 69%
Kangwon
42%
58%
10%
90%
10%
90%
48% 52%
27%
73%
Chungbuk
17%
83%
Inchon
Deajeon
Daegu
Busan
Ulsan
55%
45%
Gyunggi
57%43%
40%
60%
48%
52%
Chungna
m
12%
88%
0%
100%
Output in Industrial Cluster
29%
71%
31%
69%
17%
83%
Kyungbuk
Cheonnam
Jeju
Cheonbu
k
Kungnam
Gwangju
Output in elsewhere
* 2012년 GDP 중 제조업 비중 28%(지역별 비중 : 서울 6%, 부산 19%, 대구 22%, 인천 26%, 광주 27%, 대전 17%, 울산 56%, 경기 33%, 강원 10%, 충북 39%, 충남 51%, 전북 27%, 전남 36%, 경북 47%, 경남 43%,
제주 3%)
자료) 통계청(지역계정, 광업∙제조업조사, 국가산업단지산업동향)

11. FEATURE OF KOREAN CLUSTER MODEL
1. Mini-cluster
2. Theme Cluster
3. New Direction of Cluster Policy

12. WHAT IS MINI CLUSTERS?
Mini clusters refer to small group alliances of SMEs,
universities, research institutes, supporting agencies
and local government categorized by the similar type
of special sectors (e.g. engines, materials ..) in
strategic business or technological goal
Theme clusters are based on specific theme of
specialized production to collaborate among different
sectors’ firms and institutes

13. FORMATION OF MINI CLUSTER, INTER-FIRM NETWORK
ACTIVITY AND PROJECT SUPPORT
In 2013, 69 Mini Clusters create 59,900 network activities and 7,500 members
of Industry-University-Research Institute completed 17,700 projects
70 69
7차 8차
81
54
39
35
The number of MC is
when peak of 81
and then transform
in 2013, 69 MC
9차
34
3차 4차 5차 6차
77
2차
55
1차
7,537
13%
3%
10%
9차
4%
8차
73%
3%
10%
12%
5,987
13%
11%
74%
7,182
72%
5,413
5%
11%
13%
4%
5차
7,087
11%
6차
73%
연구소
69%
67%
17%
기업
19% 5%
11%
3차 7차
69%
4%
2차
2,706
70%
15%
70%
5,153
3,120
6% 8%
4차
13%
11%
5%
3,149
19%
5%
1차
대학
지원기관
대상단지
확대
광역 개편
정부정책 및
클러스터사업 설명회
10,560
(17.6%)
1,802
(3.0%)
교류회
7,686
(12.8%)
1,589
(2.7%)
5,222
(8.7%)
기술세미나
기타(홍보등)
1,718
(2.9%)
지원기관
협의회
정기회의
평가위원회
27,107
(45.3%)
4,205
(7.0%)
과제발굴회의
시제품제작
2,975
(16.8%)
기관연계
산업재산권
5,170
(29.1%)
마케팅
R&D
2,005
(11.3%)
기타
3,906
(22.0%)
120
(0.7%)
1,644
(9.3%)
1,935
(10.9%)
교육
Mini Cluster
formation
Number of MC
member
N/WN/ WAc 활tiv동ities Project Supports
 MC membership is
increasing trend
average per year 13%
in 2013, number of
member 7,537
 The number of N/W
activities 59,889, Ave.
per year
increased23% and
through conference
of project is the most
important
 Total number of
project support
17,755, Marketing
skill support is the
highest (total share
29.1%)
자료) 한국산업단지공단 자료 기반 KnowledgeWorks 분석

14. ORGANIZATION OF SIG WITHIN METAL AND
MATERIAL MINI-CLUSTER IN BANWOL SIHWA

15. ORGANIZATION OF SIG WITHIN METAL AND
MATERIAL MINI-CLUSTER IN BANWOL SIHWA

16. Background of Theme Cluster
16
Technology
Development
(2013. 9. 25 )Theme Cluster KICK OFF
Firm-led N/W
Theme
Cluster
(2005. 8. 26) Sub Mini Cluster KICK OFF
Network
Cluster in
Innovation
Regional &
Global Cluster
▶ Sustainable development of clustered firms &
Fostering regional industry development ~
Open
- Sustainable indigenous cluster
- Through ITC convergence technology innovation and fostering region
industry cluster
Specialization
Competitive
Cluster

17. The Case of Theme Clusters in Korea
Construction Engineering Attachment
Stakeholders
Construction Equipment Attachment
Vision Through Global Network to foster Construction Engineering Clusters
Project Cost
Business Area
Project Period 2013. 9.1 – 2015. 8.31
Mini Cluster
Location
Global N/W
Daemo Engineering, 15 related firms, university, Government Agency
1.3 million USD
Open Network
Total SH 18
Gyunggi Province, National Industrial Complex
USA CONEXPO Potential customer group meeting
Construction Equipment IT Technology & Safety Device Attachment
17

18. Theme Cluster Project – Network Structure
Project: Construction equipment in Attachment System Development
Daemo Engineering
Firm 6 Firm 7
Strategy (Ⅰ)
Jinki
Firm 1
Firm 2
Firm 3
Firm 4
Polytechnic Univ.
R&D(Ⅰ)
Daemo
R&D(Ⅱ)
Jungwoo
Firm 9
Polytechnic Univ.
Firm 10 Firm 11
Strategy (Ⅱ)
Firm 5
Firm 8
Korea Construction Association
Construction Pressure Breaker
Engineering system
Key Network
Open Network Hub
Daemo Firm 13
Firm 14 Firm 12
Strategy (Ⅲ)
18
Quick Coupler Security System
Technology Development
Quick Coupler Cast Steel Material
Marketing Information

19. New Direction of Cluster Policy in Korea
New Cluster Policy: Visions
Vision
Aims
Strategies
Vision
Establish Global Partnership to
foster innovative clusters that
drive the Development of Korean
Economy
Strategies
•Strengthen global & local
linkages
•Open innovation & cluster
•Triple Helix Relations
(University-Industry-Gov.)
•Regional Innovation
system
Aims
• Local Buzz (localized N/W) and Global pipeline
• Creative and convergence of industrial cluster
• Global Partnership and Open Networking
18

20. KNOWLEDGE SPILLOVER OPEN NETWORK (KSON)
Objectives
From Enterprise Perspective – Through Knowledge Spillover to achieve Innovation
From Ministry of Commerce or KICOX - Core Strategy need to reflect Industry’s opinion
Each Innovative Actors sharing Key Issues in Technology and Business Strategy
 Through KSON identify technology needs – Demand-oriented R&D program
 Special Interest Group (SIG) - Participate in various technology fields
 In these fields, Firms, Universities, Research Centers, Financial Institutes
– Semi-conductors, Advanced Material, Bio Science, Urban Planning, Resource
Efficiency, Digital Service, Electronics Sensor & Photonics, Energy, Food
Supply, Healthcare, High value Manufacturing, ICT, Space, Automotive
equipment
 On-line portal or off-line sharing information and workshop
 Innovation KSON
– Through collaborating with Enterprise, University, and Government Organization to
set up National Innovation Policy Agenda
 Advisory Group in KSON
– Young Professional Researchers’ Networking Group - to foster knowledge spillover
(e.g. Industrial Innovation Forum – main member group is CEO KICOX, Key
members of Korean Industrial Cluster Academic Society)
KSON
Operation
Examples

21. FK
London Paris
EU
Oslo Milan
International
Funding org.
EU, WB funding
Key Firms
Theme Cluster
KICOX
Network
TCI
Asian Chapter
Singapore
Beijing Taipei
Asia
Tokyo
Daegu
Sao
Paulo
America
Toronto
Monterrey
Silicon
Valley
Bogota
Information
Network
Centre
Tech-
ICT
Promotion
Centre
Automotive
Bio
Materials
Machinery Tech-
Development
Centre
Government
research centre
KICOX
KSON
Industrial
Innovation
Forum
Strategy
Implementation
Centre
WB
Knowledge
Sharing Centre ADB
UNIDO
IDB
Global Open Networks

22. NEED TO CONSIDERATION
• Sustainability?
• Bottom-up and need based approach
• Effective ‘long-term’ relationships with
global and regional stakeholders
• Efficient communication system building
- Government Institutional Setting
- Global and National level coordination

23. 4. Next step for Cluster Evolution:
Korean Case
Sustainable
Development
(Temporal)
Creative asset
(Talent-intensive)
Resiliency
Sustainability
S-M-A-R-T
Cluster Strategy
Anchor
Industry
Multi-Hub
Talent&
Technology
Multi-Hub & Spoke
(Spatial)
Embeddedness
(Knowledge, Technology
Resource)
Possibility of Recovery
(Cluster Eco-system)
Lee and Koo (2010)

24. THANK YOU
JUN YEUP KIM
JUNYEUP@KHU.AC.KR
17 TH TCI GLOBAL CONFERENCE | CREATING SHARED VALUE THROUGH CLUSTERS FOR A SUSTAINABLE FUTURE