Toward the Market Formation Phase

On August 9, the Ministry of Knowledge Economy and the Ministry of Education, Science and Technology jointly formed a consultative group to tackle the challenges together, strengthen the strategic coalition among them and provide better services to nanotech-related enterprises, colleges and research centers. The group will present a series of policy measures to turn the infrastructure, which is the outgrowth of the massive national-level investments, into the pivot of nanotech R&D in the future. BusinessKorea sat down with Cha Dong-hyung, Director General for Emerging Industries in the bureau of Ministry of Knowledge Economy to hear about the detailed government plan to nurture the nanotech industry.

Q: It has been 10 years since the government enacted the Nanotechnology Development Promotion Act in December 2002, setting the stage for the growth of the nanotech industry. What is your assessment of the accomplishments during the decade?

A: In November last year, the Woodrow Wilson International Center for Scholars released some data on how many nano-convergence products were developed by major nations. Korea accounted for 23% of the world’s total and ranked second on that list, following the United States. I believe that the ranking exemplifies Korea’s efforts to turn itself from a barren land to a linchpin in terms of the nano industry. There is no doubt that the Act and the nanotechnology development plan have played a crucial role during the years.

In 2001, the Korean government had invested 105.2 billion won in the sector. The figure increased more than double to 242.7 billion until 2010 and the 10-year sum amounts to 2.37 trillion. Korea’s nanotechnological competitiveness was just 25% or so of the US’s in 2001. However, it rose to the 75% level seven years later and Korea is now closing behind the United States, Japan and Germany. Between 2001 and 2005, the number of Korean patents disclosed in the US skyrocketed from 81 to 464. Since then, Korea has not missed the third place on that list. Only the US and Japan are ahead of it now.

In particular, the government has focused on the long-term growth of the industry and built nanotech infrastructure nationwide to help the research, development and industrial utilization of relevant technologies. It is well known that nations around the world have been in envy of the infrastructure, including the National NanoFab Center in Daejeon City, Korea Advanced Nano Fab Center in Suwon, National Nanotechnology Integration Centers in Pohang, North Jeolla Province and Gwangju and Nano Practical Application Center in Daegu. They carried out 134,686 industrial-academic tasks in combined total until 2010 and their equipment working rate amounts to 60% for now.

A decade ago, only three local colleges were running nanotech-related curricula, but 69 of them are doing so now. The number of the enrolled students surged from 1,804 to 8,448 during the period and 857 and 512 of them are in masters’ and doctoral courses, respectively.

Q: The inter-ministerial Nano Conv-ergence 2020 Project is launched soon. What is the background and what are the key subprojects of it?

A: After the Nanotechnology Develo-pment Promotion Act was enacted, the government concentrated its nanotech investment in the establishment of research infrastructure between 2001 and 2005, and in the training of personnel and development of technologies between 2006 and 2010. Now, for the upcoming 10 years, it is striving to make use of the past accomplishments and create new markets and industrial segments.

At present, nanotech powerhouses like the US and Germany are shifting their focus from simple technological development to commercialization and industrial utilization, hiring the sector as a strategic member to address many national issues. I am convinced that now is the time for Korea to create on the achievement the high value-added market from nano-convergence and give a new technological momentum to its manufacturing sector.

These days, the global nano-convergence markets are forecast to grow 18% each year and the world-leading players’ technological strategies are undergoing a paradigm shift from R&D-centered to commercialization-oriented. Governments’ R&D budget supports to that end are moving in the very same direction, too. In short, nations the world over are scrambling to get the upper hand in advancing into the new market where prosperity is guaranteed.

Let’s look in the mirror. We are the world’s fourth-largest nanotech developer. Nevertheless, our track record in the application of the technology is lopsided to household goods and the R&D outcome has been rather slow to find their way into major industries. It is to deal with the drawback that the government is launching the project. It seeks after R&BD, or research and business development, rather than R&D. For that goal, the Ministry of Knowledge Economy and the Ministry of Education, Science and Technology have cooperated closely from the get go, co-planning the entire programs.

The project can be categorized into three major nano-convergence segments and 10 strategic subprojects. The former is about blending the technologies of environment, information and bio with nanotech. From the research on source technologies to industrialization, the two ministries provide all-round assistances as a team.

Q: The Nano Convergence 2020 Project was rejected last year due to the lack of feasibility, but is doing well at this year’s pre-feasibility study with some excellent marks. Still, it seems not to be perfectly free from the worry of being under-budgeted. Why is that?

A: In 2010, it was subject to the pre-feasibility study under the name of Nano Covnergence 2.0. Back then, we focused heavily on the new concept of R&BD and blundered by making light of the actual contents.

This year, we followed experts’ advice that nano-convergence be backed up by the government and the specific plans be fleshed out for higher viability. We invited more than 100 specialists as project planners from corporations, academia and research centers and gave a concrete shape to the project, which is waiting for a positive final assessment.

Nonetheless, the recent financial woes of the United States and its aftereffect have led the Korean government to ponder upon some cut in fiscal expenditure. In addition, there are a number of large-scale R&D projects already underway, including the ones to set up science business belts. Under the circumstances, it cannot be denied that the allocation of some substantial budget is a tall order.

However, I believe that the enhancement of industrial competitiveness via technological development should be our no.1 tool to break through the hard times. Korea has followed the fast second strategy for its economic and technological growth. With time, it is getting more difficult to find a role model and we are required to be the epitome of emerging economies.

Well aware that nanotech impacts the overall industrial landscape and its investment is crucial in there, the government came up with its third set of comprehensive and systematic plans in April. The Nano Convergence 2020 Project is the first step for the plans to fly high in the long term.

Nowadays, not only the US and Japan but emerging nations like China and Russia are stepping up their investment in nanotech. Not to fall behind them and rue the day, the budget will have to be available as much as needed even though it lies somewhat heavy on the fiscal expenditure side.

Q: How do you think will the Nano Convergence Project 2020, if going well as expected, impact sectors other than the nano industry?

A: Through the project, at least 10 global best-selling products are developed while more than 50 companies are nurtured as nanotech commercialization leaders. They will bring Korea an opportunity to join the global top three in nano-industrial competitiveness.

As mentioned earlier, the project will be in progress on the three pivots of IT-, BT- and ET-NT convergence. As such, the nation’s industrial strength will be much beefed up across the board, especially in the three future growth drivers, if the project runs on wheels.

Nano-industrial pioneers of the world have already passed the stage of technological innovation and are heading toward the market formation phase, in which whole new functions can be added to the technology to create high added value. Unfortunately, we are thought to be in the innovation stage yet.

Korea will be able to join them in the new phase, enjoying primary economic impacts worth over six trillion won in all, on the assumption that the product-oriented R&BD undertaking goes on without a hitch. If nanotech companies’ gross sales and source technologies’ potential added value put in the calculation, the overall amount will soar up to 52 trillion.