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Reaching True Innovation through the National Innovation Cluster

Promoting innovative growth is critical for sustainable growth of a country and is closely connected with its industrial and economic competitiveness. The fact that nations around the world race to become the leader in the Fourth Industrial Revolution further proves that innovative growth, especially in science and technology, stands as one of the core agendas of major nations across the globe today.

On June 10th, South Korea’s Ministry of Trade, Industry and Energy announced a follow-up to the Special Act on Balanced National Development, which will materialize the development and operations of the National Innovation Cluster. Although the National Innovation Cluster is a recent project pursued by the government, the country’s efforts in fostering science and technology innovation dates back to the 1970s with the Daedeok Special Zone for Research and Development.

Daedeok Special Zone for Research and Development

Located 164 kilometers south of Seoul, Daejeon is South Korea’s fifth-largest metropolis. It has emerged as the science hub of South Korea, home to numerous science-related institutes and research centers such as the Institute for Basic Science (IBS) and Korea Advanced Institute of Science and Technology (KAIST). Against this backdrop, Daejeon hosted OECD Science Summit (World Science & Technology Forum) in 2015.

In the northern part of Daejeon is the famous Daedeok Research Complex/ Special Zone for Research and Development. Daedeok Research Complex was established in 1973 in a bid to develop science technology that would support the growth of the heavy chemicals industry. After designating Daedeok as a research base, many research institutes as well as science centers started to form a cluster in Daejeon and naturally, more infrastructure sprouted out around the area.

Though the primary focus of Daedeok Research Complex was research and education, “Daedeok Valley” was established in 2000 in recognizing the need to connect pure research with industry and commerce. In 2005, Daedeok Research Complex was re-established as Daedeok Special Zone for Research and Development, further connecting science with industries. In just six years after its re-establishment, the special zone had doubled its number of residing companies and its revenue had grown eight times greater. To accelerate the growth of such complexes thus propelling South Korea’s science technology capabilities, Daedeok was selected as the site for the “science-business belt” project launched under former President Lee Myung-bak in 2011. Since then, the cluster has proved to be one of the main innovation clusters in the nation.

The National Innovation Cluster (Nation- al Innovation Convergence Complex)

While Daedeok Special Zone for Research and Development has been the main actor in South Korea’s R&D sector, the arrival of the Fourth Industrial Revolution prompted the government to focus more on innovation. Currently, the government is investing heavily on fostering startups and new growth industries such as IoT, FinTech and ICT. The National Innovation Cluster is expected to not only boost innovation industries but also promote balanced development throughout the country.

The National Innovation Cluster will connect key regional entities including innovative cities, industrial complexes, special R&D zones and universities. The Ministry of Trade, Industry and Energy (MOTIE) set the goal for each cluster to attract 150 businesses. To this end, MOTIE vowed to provide incentives for businesses that invest in the National Innovation Cluster including financial aid, subsidies, tax exemption, regulatory exemption and innovation projects.

A cluster will be designated in each of the 14 cities and provinces of South Korea excluding the capital, Seoul. Each cluster will be associated with a specific industry, as seen on the map.

To ensure innovative growth in each cluster, the Regional Innovation Council, comprised of 20 specialists from various fields, will be created to come up with and efficiently carry out innovative projects. In addition, the Presidential Committee for Balanced National Development will restructure the current Regional Development Investment Agreement that is run by MOTIE. The Regional Development Investment Agreement is a system in which local governments subsidize budgets to ensure the stable implementation of pending regional projects in the span of several years. The committee and the newly formed agreement will facilitate more departments to utilize the agreement. Even though the development of the National Innovation Cluster is only in its early stages, there is no doubt that these efforts will indeed result in a more balanced growth; a growth that will maximize cooperation and the potential of various regions in South Korea

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