National Innovation Systems in Asian Countries - Term Paper Example

National Innovation Systems Introduction The concept of National Innovation Systems (NIS) has in the recent decades been gaining increased intellectual and practical. This was preceded by NIS enjoying robust adoption in the Organization for Economic Cooperation and Development (OECD) and developed countries. More recent trends have seen its become a focus of heightened attention as a means of addressing some of the more intense issues in the developing countries (Feinson 2002, 14). According to Metcalfe (cited in OECD 1997, 10), NIS can be perceived as that set of distinct institutions which either through individual or joint efforts make robust contributions to the development and diffusion of new technologies which are key in the provision of a framework within which different governments formulate and implement policies to influence the innovation process. Thus, it is a system of interlinked institutions to create, store and transfer knowledge, skills and antefacts which are central in defining new technologies. Despite the fact that there are a number of historical precursors to the NIS concept Lundvall (2002, 215) determined that its major background should be based on the necessities of policy makers and students of innovation, representing an evolutionary process encompassing observation with economic theory. After defining the concept of NIS, this paper will explore the different approaches to the creation of national innovation systems that were taken by the various Asian countries. NIS in Asian countries NIS has been successful in different Asian countries. This is based on the cognition of the fact that the innovation capacity of a country is a primary propeller behind its economic performance. In addition, it provides a measure of the institutional frameworks and support systems which are central in sustaining innovative activities (Hu & Mathews, 2005, 1322). This paper will focus on several countries namely Japan, Korea and China. NIS in Japan The NIS element in the Japanese case was founded on three primary pillars. These are the central government and the role of the Ministry of International Trade and Industry (MITI), social and educational innovations as well as the firms (keiretsu) (Marinova 1999, 1). In the case of the central government and MITI, these institutions have exhibited a robust commitment by to the following issues. Firstly, this has been through long-term strategic goals. Marinova (1999, 1) noted that the economic and industrial transformation of Japan was subjected to careful designing and direction. Economic transformations after the devastating impacts of WWII were achieved and founded on a national consensus where the government played an integral role. The long-term plan was aimed at making Japan a country which is technologically advanced and self-reliant as well as being a leader in some carefully selected technologies. This goal was achieved in the 1980s. Secondly, there was the promotion of generic technologies, most notably communication and IT. In this case, the ‘invisible hand of the MITI’ was vital in molding the long-term economic future of Japan. In addition, it made judgments in regard to which specific technologies were imperative in the coming years (Marinova 1999, 1). Thirdly, there was technological forecasting where again MITI was mandated with the primary role of technology targeting and forecasting. This responsibility was, and is still is performed in collaboration with the Science and Technology agency. Lastly, the central government played a fundamental role in its capacity to mobilize huge resources in the pursuit of strategic priorities. In this case, research and development (R&D) as well as innovation have been perceived as strategic priorities by the central government in Japan as well as by the Industries (Marinova 1999, 1). In regard to the firms (keiretsu), their contribution to the strategic approach to NIS were attributed to close links with the central government, improved quality, reverse engineering and many incremental innovations, formation of enormous conglomerates (keiretsu) and lastly R&D departments closely interconnected with production and marketing (Marinova 1999, 1). Social and educational innovations also played a significant role. This has been linked to industrial training which is of high quality at the enterprise level, broken obstacles between ‘blue’ and ‘white’ collar work and lastly as a result of a large number of human resource with higher education, most notably in science and engineering (Marinova 1999, 1). Synergy of all these approaches has played a paramount role in the creation of a national innovation system taken by Japan. Korea Yim (2004, 1) noted that for the past four decades, Korea has portrayed exemplary economic growth which has been characterized by radical changes of its NIS. The approach that Korea has taken in its path of creating a National Innovation System will be analyzed in four primary perspectives. In this section, the approach to the creation of NIS in Korea is assessed through analyzing four basic elements namely R&D investment, human resource or manpower, individual innovation actors as well as technological achievement. In regard to investment in R&D, Yim (2004, 5) determined that Korea has over the years increased its expenditure in R&D. This was evidenced in 2003 whereby the 19,687.0 billion expenditure in R&D accounted for 2.64% of the Gross Domestic Product (GDP) which was an increase of 0.11% from the preceding year. the central/local government, industries, public research institutions as well as universities have been major players in facilitating the flow of R&D expenditure. In regard to human resource in R&D which is central to NIS, Yim (2004, 8) cited that the number of personnel in this field has encountered heightened growth in the past years. This is best epitomized in year 2003 where 297, 060 people were directly engaged in R&D activities in diverse capacities like researchers, research assistants as well as supporting personnel. This marked a 6.2% increase from the previous year. Thirdly, technological achievements have also been marked by tremendous increase and major efforts made to encourage technological achievements. This has been evidenced by the number of patent registrations which have registered rapid growth. In 1997, Korea was ranked 4th globally in terms of the number of patents and utility models applied in this particular year. It invented 175, 791 items which accounted for 3.7% of the global total (Yim 2004, 10). Lastly, individual actors have also played a key role in promoting the NIS. The central/local government has been in the forefront in supporting these individuals which has fortified the approach to NIS. In addition, institutions like universities have supported individual research in doctoral programs which has also encouraged the creation of a national innovation system in Korea. China According to Liu and White (2001, 1096), economic and enterprise reforms over the last two decades which include a huge number of science and technology initiatives have posed a clear and significant impact on the dynamics, structure and the performance of the innovation system in China. Beyond these reformation implication, the inflow of foreign direct investment (FDI), the rapid economic advancement in the last twenty years and developments in the realms of science and technology (S&T) have placed China in the limelight of the global economy (Schaaper 2009, 14). There have been several approaches in the creation of NIS in China as explored in the subsequent section. Firstly, there has been creation and recreation of institutions. In this regard, two primary changed epitomized the reform toward NIS in china which have posed radical impacts on the structures, dynamics and performance of its NIS. The first has been change in the legitimate criterion of assessing performance, whether at the organizational or individual level. The second has element whish underwent radical change was the decentralization of decision making over allocation of resources within the economy as well as the operational decisions within primary actors (Liu and White 2001, 1099). The second approach was through the redistribution of tasks among actors. This is whereby the Chinese government instigated institutional changes in an attempt to elevate performance in two basic levels. The first was organizational level, an approach which was aimed at improving the quality of output among different organizations as well as minimizing the drain on the central government budget. The other was the system level (national and industry) aimed at elevating competitiveness of the industries at the domestic level and on the other hand, to better the diffusion and exploitation of technological innovations aimed at enhancing the living standards in China (Liu and White 2001, 1100). The third approach in the creation of NIS has been the elevation of personnel as well as expenditure on R&D. This is whereby China has drastically increased its investment in R&D since 1995-2006. During this period, there was a doubling of full-time equivalent of R&D personnel from 0.75 million in 1995 to 1.5 million man-year in 2006. In addition, there was also an increase of the expenditure on R&D as a share of the GDP (R&D intensity) and this rose from 0.5-1.45% (Kong & Xu 2006, 3). All these are some of the approaches which have been used by China in the creation of a National Innovation System which has seen the advancement of China into a major economic powerhouse in the world. Conclusion From the preceding discourse, it is apparent that the concept of NIS has gained increased popularity. Different countries in the Asian region have used diverse approaches in the creation of NIS as evidenced by Japan, Korea and China as explored in the previous sections. In Japan, the approaches of the central government and the role of MITI, social and educational innovations as well as the firms (keiretsu) have been analyzed. In Korea, four approaches in the creation of NIS linked to R&D investment, human resource or manpower, individual innovation actors as well as technological achievement have been explored. Lastly, creation and recreation of institutions, redistribution of tasks among actors and increase of personnel as well as expenditure on R&D in the Chinese approach towards creating NIS have been analyzed. References Feinson, S., 2002. 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