This document discusses technology transfer between Korea and other countries, using Korea's experience with ESCO projects as a case study. It describes how an ESCO project was conducted between a Korean company and US partner to identify energy efficiency opportunities at a Hyundai Motors factory. While the project identified some opportunities, it faced barriers like different funding systems and regulations between the countries. The document concludes that technology transfer must be considered within the context of a country's strategies and circumstances, and that experience with the evolution of technologies over time is important.

1. Technology transfer in bilateralTechnology transfer in bilateral
program and lessons learned:program and lessons learned:
The Case of KoreaThe Case of Korea
KEMCO, April, 2002KEMCO, April, 2002
Seoul, KoreaSeoul, Korea
Dr. Suk-hoon WooDr. Suk-hoon Woo

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1. Technology transfer or cooperation?1. Technology transfer or cooperation?
Technology is a good that can beTechnology is a good that can be
transferred?transferred?
– Globalization makes the technologicalGlobalization makes the technological
competitiveness as a primary factor in worldcompetitiveness as a primary factor in world
economy system.economy system.
Public funding replaces the direct subsidy of eachPublic funding replaces the direct subsidy of each
countries’ national economic policycountries’ national economic policy
– more R&D expenditure, but the result of research ismore R&D expenditure, but the result of research is
considered as national strategy factor.considered as national strategy factor.

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Network effect of technologyNetwork effect of technology
– A combination of units of technology is “oneA combination of units of technology is “one
system of technology.system of technology.
Path dependency of investments already made.Path dependency of investments already made.
– Choice of one technology is not just a choice ofChoice of one technology is not just a choice of
one unit, but a choice of future systemone unit, but a choice of future system
ex) natural gas pipe-line network, electrification andex) natural gas pipe-line network, electrification and
grid networkgrid network

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Transfer activities are multiple and complexTransfer activities are multiple and complex
– Joint research, FDI, joint-venture, consortiumJoint research, FDI, joint-venture, consortium
can be used as a implementation tools ofcan be used as a implementation tools of
technological cooperation.technological cooperation.
– Public program for demonstration project canPublic program for demonstration project can
be understood as a principal scheme for thebe understood as a principal scheme for the
technology transfer under UNFCCCtechnology transfer under UNFCCC
role of government and public sectorrole of government and public sector

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2. Criteria for needs assessment2. Criteria for needs assessment
Market potential : the technology near toMarket potential : the technology near to
commercialization (pre-commercializationcommercialization (pre-commercialization
stage, pre-standardization stage)stage, pre-standardization stage)
Public oriented technologyPublic oriented technology
Trigger-effect to create a new markets withTrigger-effect to create a new markets with
advanced technologyadvanced technology
Technology includes “Technology includes “know-howknow-how” of soft” of soft
technologies like energy managementtechnologies like energy management

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3. Selected technologies3. Selected technologies
ESCO(Energy Service Company) andESCO(Energy Service Company) and
energy management systemenergy management system
Methane capture and reuse in waste land-fillMethane capture and reuse in waste land-fill
sitesite
Heat recovery, including heat-pumpHeat recovery, including heat-pump

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4. ESCO Experiences4. ESCO Experiences
ProcessProcess
– Circulation of proposals for the national stake-Circulation of proposals for the national stake-
holders (1999) - phase 1holders (1999) - phase 1
– Selection of the ESCOs and potential projectsSelection of the ESCOs and potential projects
Hyundai Motor Ulsan Factory was selected for theHyundai Motor Ulsan Factory was selected for the
demonstration projectsdemonstration projects
– Co-auditing : Korean ESCO and US partnerCo-auditing : Korean ESCO and US partner
– Project identificationProject identification

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Hyundai Motors : site
SempraEPS Korea
KEMCO NREL
Korea side US Side
Technology Transfer Scheme
ProviderRecipient
Energy auditing and ESCO
MOU for TCAPP-Korea
Technical support

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BarriersBarriers
– Funding : who will pay for the initial survey?Funding : who will pay for the initial survey?
Sempra, EPS Korea, Hyundai Motors, orSempra, EPS Korea, Hyundai Motors, or
KEMCO/NREL?KEMCO/NREL?
– Technological system : the difference ofTechnological system : the difference of
regulation of environment related to theregulation of environment related to the
painting process (ex. Treatment of VOCs)painting process (ex. Treatment of VOCs)
– ESCO market structure : difference of auditingESCO market structure : difference of auditing
tools and systemtools and system

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Limited success in Hyundai ESCO projectsLimited success in Hyundai ESCO projects
– successsuccess
Technology transfer throughout a experience ofTechnology transfer throughout a experience of
auditingauditing
Detailed auditing report and project identification -Detailed auditing report and project identification -
heat recovery process in painting processheat recovery process in painting process
– FailureFailure
EPS Korea has been bankrupted - external causeEPS Korea has been bankrupted - external cause
Difference of funding system for ESCO projectDifference of funding system for ESCO project
– public funding (Korea) versus private funding (US)public funding (Korea) versus private funding (US)
– Hedging for the exchange rateHedging for the exchange rate

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5. Lessons learned5. Lessons learned
Technology transfer must be considered inTechnology transfer must be considered in
the context ofthe context of national strategynational strategy, including, including
specific circumstances and developmentspecific circumstances and development
stages.stages.
Experience mattersExperience matters : technology it-self is a: technology it-self is a
kind ofkind of evolutionaryevolutionary process, not just aprocess, not just a
good.good.
History mattersHistory matters : path dependency, network: path dependency, network
effect must be considered.effect must be considered.