Korean Techno-Town

Korean technology - the quiet achievers

Technological innovation is alive and well in Daejeon, South Korea, despite the continual threat of war with its northern neighbour.

Korea is well known as a divided nation that has experienced an uneasy truce since the end of the Korean War in 1953. Tension between North and South Korea was heightened in March 2010 by the sinking of the South Korean warship Cheonan, killing 46 sailors. South Korea and the international community blamed the North for the sinking, but Pyongyang has denied the accusations. Then, in November, the North accused the South of firing into its waters and retaliated by shelling Yeonpyeong Island, killing four South Koreans.

Since then, the North has called for better ties with South Korea, including what one source called 'unconditional peace talks'. In January 2011, South Korean President Lee Myung-bak reassured the world that 'the door for dialogue is still open'. 'If the North exhibits sincerity,' he added, 'we have both the will and the plan to drastically enhance economic cooperation together with the international community.'

Despite the underlying tensions, the South has pursued its goal to develop world-class technology in a globally competitive arena. We all know South Korea for its value car-makers Daewoo and Hyundai, and its consumer electronics manufacturers LG and Samsung, but the Republic of Korea is far more than an offshore manufacturer of cheap western paraphernalia. For example, it is one of only ten countries capable of placing its own spacecraft in orbit using a domestic launch vehicle. It is also investing heavily in nuclear fusion research, biotechnology and 'grass roots' science.

Science town to innovation cluster

Much of South Korea's technological innovation springs from its tidy but uninspiring second city Daejeon (formerly Taejon) and a sprawling campus-style suburb known as Daedeok Innopolis (a contraction of innovation and metropolis). According to the Boston Consulting Group's International Innovation Index for 2009, Korea was second only to Singapore 'in innovation leadership among 110 countries', including the United States which ranked eighth. Moreover, in September 2010, BCG's 12th annual report in its 'Value Creators series' identified a South Korean company, OCI, as number four in its list of 'top ten value creators'.

As a technology hub that considers itself to be 'on the front line of Asian innovation', Daedeok Innopolis takes a major part of the credit for this position.

Given that Daejeon itself was completely destroyed in the Korean War of 1950-53, its heritage as a science and technology centre is short but impressive, illustrating what targeted and sustained funding can do. Established as an R&D centre in 1974, the Daedeok Special Zone has benefited from investments of more than 30 trillion won (about £15bn) over the past 30 years. Gradually, organisations such as the Korean Electronics and Telecommunications Research Institute (ETRI) and Korea Advanced Institute of Science and Technology (KAIST) moved their facilities to Daejeon, while the government in Seoul passed a number of special laws encouraging research and fostering business ventures.

New legislation initiating Daedeok Innopolis came into effect in July 2005 and, today, what the area's publicity calls 'the world's No.1 innovation cluster' covers more than 70km2 to the north of Daejeon's city centre. And just in case a lingering doubt remains as to the westernisation of this southward-thrusting peninsula, nestled as it is between its economic rivals China and Japan, it has already succumbed to the necessities of brand identity. Daedeok's colourful logo comprises five overlapping D-shapes representing its five 'areas of expertise': industry (red), academia (blue), R&D institutes (green), community (purple) and government (orange).

It's not all logos and marketing-speak, though. Daedeok Innopolis houses five universities, 29 government-funded institutions, 400 corporate R&D centres and more than 1,000 small and medium-sized companies, between them employing 10 per cent of the nation's engineering PhDs (some 7,000 individuals). The tax benefits for start-ups are significant, including national income and corporate tax-exemption for up to five years, while all local registration and property taxes are waived for up to ten years.

Meanwhile, Daedeok itself provides umbrella services, such as an investment and business incubation fund and 'Daedeok Connect', which encourages and supports 'a cooperative culture among industries, academia and research institutes'. In addition, the area has 23 per cent of the nation's research equipment (on a par with Seoul itself) and attracts 35 per cent of the national R&D budget.

In 2008, Korea invested 34 trillion won in R&D, which amounted to 3.37 per cent of its total GDP. According to an analysis of government R&D policy by Lee Min-hyung, a research fellow in future science and technology strategy, this placed Korea in fourth place in R&D investment, just behind Japan but well ahead of the US and China. Moreover, she reports, the government's own R&D budget is growing by more than 10 per cent per year.

Electronics industry

So what does the Korean government get for its money? A thriving and innovative electronics industry for a start.

For example, according to Kim Dae Sik, executive director of ETRI, 'Korea's mobile communications field surged to global prominence in 1996 with the commercialisation of the CDMA system, which was developed by ETRI'. Code Division Multiple Access technology, a cornerstone of the global cell phone market, has generated 300 billion won in royalties over ten years and produced what Kim calls a £56 trillion economic ripple effect' representing 30 per cent of the Korean national budget. Moreover, adds Kim, 'following the development of CDMA, ETRI was the first company in the world to complete work on OFDMA technology, which is based on WiBro (Mobile WiMAX)'. The WiBro system, which had its beginnings in Daedeok, was commercialised in 2006 and services are now available in the metropolitan capital region, he says.

In 2008, the Korea Research Institute of Standards and Science (KRISS) sold its touch-sensor technology to Misung Polytech Co. in a deal second only to ETRI's on CDMA. Misung has applied the technology to touch-screens for mobile phones and 'super slim' computer mice'. Meanwhile, KRISS anticipates around 160 billion won in technology revenues if the product is commercialised successfully. The fact that its engineers got the idea when they were using touch-sensors to develop artificial skin indicates the unpredictable nature of spin-off applications.

Korea is also prominent in the memory field, as shown by Samsung's announcement, in 2009, of 'the world's first super-high-density DRAM [dynamic random access memory] using nanotechnology' (the 4Gb DDR3 chip is a product of 50nm process technology). Also in 2009, Daedeok announced that KAIST had developed the world's first transparent memory device, which it compared to 'those seen in the film Minority Report'. The device is similar to non-volatile memory devices – like USB flash – which retain data without a power source. Reportedly, it has 'a much simpler manufacturing process' than existing CMOS devices and is expected to have a much longer lifespan.

Interestingly, the area has attracted foreign firms as well: the Cavendish-KAIST Joint Research Center was established in 2004; Texas Instruments started working with KAIST on mobile media platforms in 2005; and Norsat opened a satellite terminal research centre with ETRI in 2008.

Beyond silicon

Daedeok Innopolis has been called 'the Silicon Valley of Asia', which might be considered the ultimate accolade, but its management feels the analogy 'risks obscuring the full range of technologies available'. One of them is nuclear technology.

Some 40 per cent of Korea's electricity is derived from nuclear generation and the Korea Atomic Energy Research Institute has developed its own sodium-cooled fast reactor, which has since been exported to the United Arab Emirates. But it is nuclear fusion that has technologists excited. The National Fusion Research Institute's superconducting nuclear fusion test reactor, KSTAR, produced its first plasma in 2008, an event that drew international attention as the world's first successful run of a fusion reactor using Nb3Sn, a material under consideration for the ITER international reactor design.

In fact, Korea is in the throes of a general push for 'sustainable eco-friendly energy', as illustrated by a demonstration model for a 'zero energy town' at the Korea Institute of Energy Research. Completed in October 2005, it comprises a two-storey, 260m2 house and a 1500m2 building containing a three-storey laboratory and four residential apartment units. They are equipped with a 100kW wind turbine, a 16kW solar generator and a 3kW fuel cell installation.

This is all just as well, as Korea is the world's 9th CO2 emitter. According to a report by the OECD's International Energy Agency released in October 2009, the percentage growth between 1990 and 2007 was, at 113 per cent, the highest among the 30 OECD countries.

Another key area of interest at Daedeok is space technology. Although 2009 marked the 20th anniversary of Korea's space programme it has not been well publicised, apart from the flight of its first astronaut, Soyeon Yi, to the International Space Station in 2008. Nevertheless, the design and development of the Naro KLSV-1 launch vehicle by Korea Aerospace Research Institute (KARI) marks a significant watershed in providing access to what is still a fairly exclusive club: the club of nations capable of delivering their own satellites to low Earth orbit (LEO).

Although the maiden launch of the rocket, on 25 August 2009, was only partially successful because half of the payload fairing failed to separate, preventing the satellite from reaching orbit, this is a common teething problem and was addressed for a second launch attempt in June 2010. Unfortunately, the vehicle's first stage exploded after only a couple of minutes of flight and a failure investigation board was unable to determine a definitive cause. Nevertheless, US$1.3bn has been allocated for the development of the KSLV-2, a locally-built vehicle capable of placing a much larger payload in LEO.

In common with other nations keen to develop their space capabilities, Korea has benefited from the long experience of others, such as Russia which supplied the KSLV-1's first stage, and the UK which trained some of Korea's first satellite engineers.

One of these engineers is Sungdong Park, president and CEO of small-satellite manufacturer Satrec Initiative, which was formed in 1999 by a group of KAIST engineers as a classical university 'spin-out' company. Park and some of his colleagues cut their teeth on Korea's first satellite, KITSAT-1, which was launched in 1992. It was part of a collaborative programme between KAIST and Surrey Satellite Technology Ltd (itself a university spin-out) and included technology transfer agreements and the training of Korean MSc students in Guildford, UK. Park says SSTL is a competitor, but is quick to add that he maintains a friendly relationship with his alma mater.

According to Park, the band of entrepreneurs pooled their 'retirement funds', or termination payments, to form Satrec Initiative, taking the abbreviated name of KAIST's Satellite Technology Research Centre (Satrec) while acknowledging their own 'initiative'. Following an injection of venture capital funding in 2004/05, the company was listed on the Korean stock exchange (KOSDAQ) in 2008, when it was capitalised at some US$80m.

The funding placed Satrec in a position to develop its own standard mini-satellite platform, the SI-200, while also addressing the export market. It did this initially in collaboration with the Malaysian space agency, ATSB, in developing Malaysia's RazakSAT imaging satellite, and then applied the same platform architecture to the DubaiSat-1 mission. The satellites were placed in orbit by different launch vehicles in July 2009.

Daedeok model

If Daedeok Innopolis was an experiment conducted by the Korean authorities, then it was a successful one. As a collective, by the end of 2009, it had registered over 32,000 domestic and some 6,000 foreign patents. It had earned in excess of 80 trillion won in technology transfer fees and 23 of its companies had been registered on KOSDAQ.

The overall impression is one of 'joined-up thinking' with almost every research institute and university offering programmes on how to start a company, as well as joint R&D, technology transfer and consulting services, all designed to make their spin-out companies successful. Indeed, the Korean government is keen to use Daedeok – 'the nation's only R&D driven innovation cluster' – as a model for similar clusters nationwide.

President and CEO of Daedeok Innopolis, Gye-Doo Kang, is bullish in the face of 'the current economic turmoil'. 'Daedeok Innopolis is determined to grow as one of the world's leading innovation clusters', he said, and expects to become 'an Asian hub for technology commercialisation'. It seems the West has yet to experience the full force of Korean technology innovation. We must hope that it is deployed for peaceful as opposed to warlike purposes. *

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