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United Nations "Enhancing the Competitiveness of SMEs: Subnational Innovation Systems and Technological Capacity-building Policies (Economic and Social Commission for Asia and the Pacific)"

This publication contains the proceedings and papers presented at the Regional Consultative Meeting on Subnational Innovation Systems and Technology Capacity-Building Policies to Enhance Competitiveness of SMEs, which took place in Beijing, China in October 2006.

CONTENTS

Page

ABBREVIATIONS vii

PART ONE 1

REPORT OF THE REGIONAL CONSULTATIVE MEETING ON SUBNATIONAL

INNOVATION SYSTEMS AND TECNOLOGY CAPACITY-BUILDING POLICIES

TO ENHANCE COMPETITIVENESS OF SMES 1

I. ORGANIZATION OF THE MEETING 2

II. OPENING OF THE SESSION 3

III. CONSIDERATION OF ISSUES 5

IV. CONCLUSIONS AND RECOMMENDATIONS 20

PART TWO 27

BACKGROUND PAPERS

PAPER I: STUDY ON SUBNATIONAL INNOVATION SYSTEM POLICY

TO ENHANCE LOCAL SMES COMPETITIVENESS 27

I. INTRODUCTION 28

II. SUBNATIONAL INNOVATION SYSTEM AND SME POLICY IMPLICATIONS 30

III. STATUS AND POLICY ISSUES OF SIS AND SMES IN THE REGION 41

IV. A FRAMEWORK OF SIS-RELATED SME POLICIES 50

V. RECOMMENDATIONS 59

VI. CONCLUSIONS 61

PAPER II: STUDY ON STRATEGY FOR ENHANCING COMPETITIVENESS

OF SMES BASED ON TECHNOLOGY CAPACITY-BUILDING 65

I. INTRODUCTION 66

II. POLICIES, INCENTIVES AND MECHANISMS: A REVIEW 67

III. GLOBALIZATION, TECHNOLOGY AND COMPETITIVENESS 86

IV. POLICIES AND MECHANISMS IN SELECTED COUNTRIES 97

V. KEY ISSUES AND BEST POLICIES 116

VI. STRATEGIES, RECOMMENDATIONS AND CONCLUSIONS 127

PART THREE 141

BENCHMARKING FROM SUCCESSFUL COUNTRIES: EXPERIENCES,

LESSONS AND BEST PRACTICES ON SIS 141

I. PROSPECTIVES ON THE TECHNOLOGICAL INNOVATION: LESSONS 142

FROM KOREAN EXPERIENCE

A. Economic Growth in the Republic of Korea 142

B. Growth of Science and Technology Sector

C. National Innovation System in the Republic of Korea 145

D. Sources of Corporate Growth in the Republic of Korea 147

E. Economic Growth Model of the East Asian Countries 149

F. Some Lessons from the East Asian Countries' Experiences 151

II. DAEDEOK INNOPOLIS STRATEGIES FOR SMES: ITS ROLE AND

MISSION WITHIN NATIONAL INNOVATION SYSTEM 152

A. Introduction 152

B. Vision and Strategic Plan of "Daedeok Innopolis" 153

C. Policies for SMEs 154

D. Case Study: Havit Information Inc. 155

E. Conclusions 156

III. REGIONAL SCIENCE & TECHNOLOGY POLICY AND REGIONAL CAPACITY-BUILDING:

WITH FOCUS ON KNOWLEDGE CLUSTER INITIATIVE 156

A. Introduction 156

B. Regional S&T Policy in Japan 157

C. Variety of Region 162

D. Case Study for Region 164

E. Conclusions 165

IV. SUBNATIONAL INNOVATION SYSTEMS AND TECHNOLOGY CAPACITY-BUILDING

POLICIES: THE CASE OF GERMANY 165

A. Introduction 166

B. Key Points and Trends from a Medium-Term Perspectives 167

C. Research and Innovation Policy Measures by the Government 170

D. Current Status of Subnational Innovation Systems and SME Technology

Capacity-Building in Germany 171

E. Conclusions 181

V. PROMOTION STRATEGY FOR TECHNOLOGY-BASED INNOVATIVE SMES:

MALAYSIA' MSC CLUSTER AND THE MSC TECHNOPRENEUR DEVELOPMENT

FLAGSHIP PROGRAMME 185

A. Introduction 185

B. Some National Level Institutions for SME Development 187

C. The Multimedia Super Corridor Cluster and MSC Technopreneur

Development Flagship Programme as Support System for SMEs 189

D. The MSC Technopreneur Development Flagship Programme 193

E. Challenges, Opportunities and Best Practices 196

VI. SUBNATIONAL INNOVATION SYSTEMS FOR REGIONAL DEVELOPMENT POLICY

AND PONDERABLES 201

A. Introduction 201

B. The Policy 201

C. The Ponderables 205

D. Conclusions 211

VII. TECHNOLOGY OUTSOURCING AND POLICY INSTRUMENTS

FOR SME TECHNOLOGY CAPACITY-BUILDING 212

A. Technology Outsourcing from Developed Countries 212

B. Policy Instruments for SME Technology Capacity-Building 215

C. APCTT Activities for SME Technology Capacity-Building 216

PART FOUR 219

COUNTRY PAPERS 219

I. BANGLADESH 220

II. CAMBODIA 228

III. CHINA 231

IV. INDIA 234

V. INDONESIA 245

VI. LAO PEOPLE'S DEMOCRATIC REPUBLIC 253

VII. MONGOLIA 256

VIII. MYANMAR 265

IX. NEPAL 272

X. REPUBLIC OF KOREA 288

XI. THAILAND 304

XII. UZBEKISTAN 308

XIII. VIET NAM 342

PART FIVE 347

SPECIAL PRESENTATION OF KOREAN EXPERIENCES ON THE PROMOTION OF SIS

AND SME TECHNOLOGICAL CAPABILITY 347

I. ENHANCING THE COMPETITIVENESS OF SMES BY FOSTERING RIS:

THE KOREAN CASE 348

II. INNOVATIVE SMES AND PROMOTION POLICIES IN THE REPUBLIC OF KOREA 353

A. SMEs in the Korean Economy 353

B. Innovative SMEs in the Republic of Korea 355

C. The Government Policies and Promotion Programmes 359

D. Recent Initiatives for Promoting SME Innovation 365

III. REGIONAL INNOVATION SYSTEM AND TECHNO-PARK POLICY IN THE REPUBLIC

OF KOREA: THE KYEONGBUK TECHNO-PARK CASE 367

A. Preface 367

B. Regional Innovation System and Techno-park Policy 367

C. The Kyeongbuk Techno-park Case 370

D. Conclusions and the Way Forward 376

ANNEXES 379

I. INAUGURAL STATEMENTS 380

II. LIST OF PARTICIPANTS 384

III. PROGRAMME 389

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