Developing private innovation scoreboard and its application in South Korea

Abstract

The private sector is considered as a core driver of national innovation activities. From the perspective of national innovation system, it is the key sub-system in which various innovation activities are triggered by profit maximization motives. Currently, in South Korea, the research and development (R&D) investment in private sector accounts for about 75% of the national R&D investment. Considering the increasing role of the private sector in the national innovation system, it is essential for policy makers to make innovation activities in each domain to be complementary with each other. From the perspective of the national innovation system the primary objective of this study is to develop the innovation scoreboard that enables us to monitor the status of the innovation activities in private sector. Furthermore, we seek to ensure the comparability of all indicators so that we can easily identify one nation’s area of relative strength and comparative advantage.The private sector innovation scoreboard is composed of four sub-categories: innovation infrastructure, institutions, innovation activities and impact. The innovation activities are divided further onto knowledge activities, organizational activities and innovation output. By doing so, the part of innovation activities model the sequential process of input-output flow of innovation. In total, 60 indicators are included in the private innovation scoreboard.Among the 60 indicators, South Korea has relative strength in science and technology human resources, market size, private R&D support system, start-up system, and the number of start-ups. However, it shows relative weakness in indicators such as financial infrastructure, legal system for promoting science and technology, financial system, labor market efficiency, regulation and output. Scores on science and technology manpower, start-ups, and input into knowledge activities, which can be regarded as input, were relatively good. However, the output and impact sectors of innovation, which can be considered as performance areas, seem relatively vulnerable. Compared to input, the causes of low performance can be explained with lack of financial infrastructure, financial and scientific technology promotion system, and industry-academic cooperation.By creating a private innovation scoreboard this study contributes to the understanding of current status of overall private sector innovation system in Korea. Therefore, we can compare the current South Korea system with that of advanced countries and identify its strengths and weaknesses. As a result, we can contribute to the development of strategic policymaking, such as the supplementation of relatively vulnerable areas.