Do we need a double-edged sword?; Triggering networking of Silicon Valley

Korean diaspora and their contribution to home country institution transformation

Jeong Hyop Lee (Science & Technology Policy Institute, STEPI)

AnnaLee Saxenian (UC Berkeley)

Presented at the International Conference

on Diaspora for Development,

July 13-14, 2009, Washington D.C.

Contents

• Study structure and position of the pilot study

• Introduction

• Immigration paths of Korean engineers in Silicon Valley

• Korean entrepreneurs in Silicon Valley

• Contribution of Silicon Valley Korean entrepreneurs to Korea

• Networking of Korean engineers in Silicon Valley

• Discussion and policy implications

0. Study structure and position of the pilot study

Pilot Study on Silicon

Valley’s Korean S&T

diaspora

Interviews on Korean

policy makers,

conglomerates and SMEs

Survey on Korean S&T

diaspora in the US

Strategies development

study with the case of

mobile cluster with a free

economic zone policy

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Public/private

Networks

1. Introduction

• How can the diaspora contribute to the institutional transformation of the Korean economy in a post catch-up phase of development that requires greater capacities for innovative search?

• This paper identifies both strategic opportunities and challenges for Korean diaspora members’ contributions to home country institutions.

• The paper draws on the findings of a series of in-depth interviews and participation in the networking activities of the Silicon Valley Korean diaspora.

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2. Immigration paths of Korean engineers in

Silicon Valley

• The combination of important changes in national immigration policy and corresponding immigration trends, the openness of US institutions of higher education to qualified foreign students (at least through the 1990s), the growing presence of immigrants in graduate S&E programs relative to native born students, the tendency of immigrants to geographically concentrate, and the growing demand for skill by Silicon Valley-based industries were combined to create the Asian ethnic force in Silicon Valley (Saxenian and Shin, 2005).

• Korean high technology workforces in the Silicon Valley area, however, were negligible in 1970s and have increased modestly compared to other Asian ethnic groups of China, India, Vietnam, Philippines, etc.

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1970 1980 1990 2000

Number % Number % Number % Number %

Foreign born

Europe 5410 5 9523 4 16576 4 27413 6

Canada 1203 1 1741 1 2854 1 4638 1

China 100 0 3420 2 10828 2 26594 5

Taiwan 0 0 920 0 6516 1 12907 3

Japan 600 1 1421 1 2939 1 4468 1

Korea 100 0 1500 1 3507 1 5758 1

Philippines 600 1 7250 3 20520 5 23219 5

Vietnam 0 0 3023 1 15248 3 27174 6

India 400 0 1120 1 7371 2 30058 6

All other Asian born 0 0 1121 1 4234 1 9215 2

Middle East 201 0 1141 1 4373 1 7399 1

Australia and New Zealand 0 0 241 0 392 0 1005 0

All other foreign born 2206 2 9941 4 24565 6 26661 5

Native 94151 90 184656 81 325345 73 286772 58

Total 104971 100 227018 100 445268 100 493281 100

Source: Saxenian and Shin (2005)

Table 1: Transformation of High-Technology Workforce in Silicon Valley, 1970-20004

• Korea has been one of the biggest economies to send students overseas; In 2004, around 190,000 students studied overseas, which in terms of per capita is the largest in the world.

• The developmental state model economy has been institutionalized with infusion of the foreign educated S&T talents; GRIs in 1970s, universities in 1980s, large companies in 1990s have been major recipients of them, while technology SMEs are expected to do the similar roles in 2000s.

• Previous success model of the Korean system to rely on foreign education system, however, is confronted with limitations; The stay rate of Korean doctorate recipients from US Universities began to increase since mid of 1990s and the brain drain index of IMD also falls from 7.53 in 1995 to 4.91 in 2006.* Brain drain decreases as the index approaches 10.

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1987/88 1990/91 1992/93 1994/95 1996 1998

China 65 88 92 91 96 90

India 72 79 83 87 86 86

Taiwan 47 42 36 42 40 47

Japan 17 13 21 27 24 37

Korea 17 11 9 15 21 34

Total 41 47 53 51 56 61

Table 2: Stay rate of foreign doctorate recipients from US University

after five years

Source: Jin (2007)

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• This trend has been reflected in the educational and occupational profiles of Silicon Valley’s Koreans.

• In 1990 the educational achievement of Koreans was similar to that of the region’s Vietnamese and Filipino immigrants, with only 39% holding a B.S. or advanced degree; By 2000, however, the proportion had grown to 71%, more closely resembling the Japanese levels of educational attainment in the region.

• Korean immigrants have also significantly improved their occupational positions during the 1990s, reflecting their increased educational achievement, from the largest number (38%) having semi-skilled jobs in 1990 to professional occupations becoming the dominant category in 2000 (55%).

• The Korean large companies and SME technology companies which have aggressively entered the Silicon Valley especially in 2000s have also contributed to the formation of Korean ethnic group in Silicon Valley and they have also upgraded the average Korean education achievements and their occupational profiles .

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<The case of Silicon Mitus>

• As Korean large companies dominate a few of the global electronics market such as mobile phones, display, etc., there are quite good opportunities to create new venture companies to supply for them in Korea. As they develop new products, they need experienced engineers from Silicon Valley.

• The Silicon Mitus which is a spin-off company from the MagnaChip Semiconductor LLC in the spring of 2007 in Korea has also opened its Silicon Valley branch office in the fall of the same year.

• The company is developing and manufacturing the power management IC focusing on TFT LCD notebook & monitor, LCD/AMOLED mobile display, LED lighting/BLU applications. It is supplying chips to LG and now designing the IC for Samsung.

• The Silicon Valley branch office hires Korean experienced engineers to focus on chip design and the Korean headquarter is focusing on development and manufacturing of IC with close contact with Korean client companies.

• The Walden International, Silicon Valley venture capitalist, has also invested in the company.

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• The extensive statistical review has shown that Korean engineers and scientists have only modestly grown in Silicon Valley even though Korea has been one of the largest countries to send talented students to study overseas.

• The economic success of the home country has provided quality jobs and opportunities for the foreign educated to return to Korea just after they finished their study.

• The magnetic attraction of home country, however, cannot be sustained for last two decades, which has been reflected in the increase of stay rate of the Korean doctorate recipients from the US Universities.

• Korean companies of large and SME technology companies which have tried to absorb new technologies and find new clients from Silicon Valley have grown as strong reservoir to hold Korean engineers especially in 2000s.

• These have combined to enlarge and upgrade the Korean ethnic group in Silicon Valley.

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3. Korean entrepreneurs in Silicon Valley

• There are not many success stories of Korean entrepreneurs in Silicon Valley; That the economic success of home country of Korea has received many talented scientists and engineers who were educated in the US can be the reason of the few Korean entrepreneurs in the Silicon Valley.

• A few of them are Philip Hwang in 1970s, Chong-Moon Lee in 1980s and David Lee in 1990s. There are, however, few successful Korean entrepreneurs in 2000s.

• In this section, those famous Korean entrepreneurs will be reviewed to figure out their characteristics.

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3.1 Philip Hwang and TeleVideo from 1970s

• Philip Hwang has founded the TeleVideo in 1975, which is specialized in developing and manufacturing computer terminals; The company has developed smart terminals with Intel microprocessor when dumb terminals were the industry standard and it was listed in the NASDAQ in 1983 and has successfully led the video display terminal industry in 1980s.

• The company also established a very distinguished model to produce the terminals with strategic partnership with Dongynag, a Korean engineering company which used to produce TV sets in Korea; The TeleVideo led technology development with the US market trend analysis and Dongyang did the development project to produce the terminals in Korea.

• The company, however, has suffered from the shrinking of the terminal market since late 1980s. Philip Hwang never gave up his ownership of the company, which is also the typical attitude of entrepreneurs in Korea. It is believed that new investment and new technologies has been blocked because of his ownership.

• Though the TeleVideo was successful in the beginning, it was a Korean enclave in Silicon Valley which was owned and managed by the Korean founder and produced terminals with strategic partnership of Korean engineering company.

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3.2 Chong-Moon Lee and the Diamond Multimedia

Systems from 1980s

• The Diamond Multimedia Systems was established by Chong-Moon Lee in 1982.

• The company produced the computer graphic cards and was successfully taken to the IPO in early 1995.

• After he retired from the company, he established the AmBex Venture Group to invest in the areas of wireless communication, voice over IP applications, internet infrastructures, network security and multimedia applications in 1995.

• He has also been well known for his various social activities of education, cultural as well as athletic activities. The Chong-Moon Lee Foundation donated $16 million to The Asian Art Museum of San Francisco and it is named as “Chong-Moon Lee Center for Asian Art and Culture.”

• He is commendable not only for utilizing technology and market opportunities of Silicon Valley to launch his businesses but also for his successful engagement in and contribution to the local business environment.

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3.3 David Lee and the Silicon Image

• The Silicon Image which is developing various technology products related to secure storage, distribution and presentation of high definition contents was founded by David Lee in 1995 and now has grown up as a key company linking global computer and consumer electronics companies and major SoC providers.

• The market power of the company comes not only from the unique technology it developed but also from its market position and strategy to dominate market standard.

• Two important standard initiative of Silicon Image are the Digital Display Working Group (DDWG) in 1998 and the HDMI Working Group in 2003 where major global consumer electronics producers such as Sony, Hitachi, Thomson (RCA), Phillips, Matsushita (Panasonic), and Toshiba have taken part.

• According to John Shin, the vice president of the Silicon Image, the Silicon Image would not be possible, if the founder were in Korea. The various opportunities and resources the Silicon Valley has provided the founders made him successfully launch the business.

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3.4 Peter Bae and the Anoxis in 2000s

• In 2000s there have not been many successful entrepreneurs. One of the typical cases is the trial of Peter Bae, chair of the BayArea K Group, with his co-founders.

• Peter Bae started the Anoxis with two Korean Ph. D. engineers in 2003 after he worked at the Agilent which is an HP spin-off company for two years. The company was to develop a high solution LCD parts which could be applied variously.

• He was in charge of finance and management and mobilized investments not only from Korea but also from the US. The company developed hand-phone LCD products jointly with the LG to provide them to the Neodis which is an LCD module supplier for LG.

• He tried to sell the company to a Silicon Valley LCD company which is a supplier to Samsung in 2006 and 2007. He could not succeed because the stakeholders and the investors from Korea and the US could not make consensus.

• After he shortly worked in the LAM Research Corporation which is a supplier of wafer fabrication equipment and services, he started another venture company which produces high efficient solar chips in 2007. He moved out from the company after it mobilized investments. Now he joined an internet company of the Fantage since then.

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3.5 Achievements of Korean Silicon Valley entrepreneurs

• In spite of lack of critical mass of qualified Korean engineers and scientists in Silicon Valley, quite successful entrepreneurs have appeared from the Korean ethnic community since 1970s and they have shown strong adaptation to the Silicon Valley business ecology.

• Philip Hwang was the first Korean entrepreneur to list his company in NASDAQ. He utilized the brilliant technological opportunity of Silicon Valley but, his business model was like a Korean enclave which has been owned and managed by Korean founder and produced its products with strong partnership with Korean company.

• Then the Korean entrepreneurship has evolved to have the most influencing Korean entrepreneur, Chong-Moon Lee who has successfully intermingled with American business society and culminated in David Lee who has created an innovative business model to dominate a standard leadership in the area of digital interface.

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4. Contribution of Silicon Valley Korean

entrepreneurs to Korea

• The S&T diaspora is considered for its potential as search networks for new experimentation in Korean innovation system.

- The Korean innovation system, once proven successful through the strategic coupling of efficient and committed central government and a few chaebols, large conglomerates, in the global market, is currently accused of choking new creativity dynamics of small and medium sized technology companies in Korea.

- The venture dynamics, that were generated through the financial crisis in the late 1990s, are withering at the moment, and needs to be revitalized in Korea.

• With quick review of the first successful Korean entrepreneurs’

contributions, here we try to find the conditions with three personal

experiences of engagement in Korean economy; large company,

SME venture companies, and venture investment.

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4.1 Early Korean entrepreneurs’ contribution

• The Korean entrepreneurs who had business successes in Silicon Valley have tried to invest in Korea but the investment turned out to be serious failures. Philip Hwang, the founder of the TeleVideo, invested in Korea in 1980s. He established the TeleVideo Korea in Korea in 1984 but the company was sold after losing clients from the severe strikes of 1988.

• Other approaches to contribute to the development of Korean economy are well represented by the contribution of Chong-Moon Lee. He donated 2 million USD to the Stanford University in 1998 and provided an education program for Korean venture entrepreneurs in the University. He also donates to the Korean Universities which include his donation to the Korea Advanced Institute of Science and Technology (KAIST) in 2004.

• They are also actively engaging in enlightening advisory activities in Korean agencies network, which includes delivering their experiences in various seminars organized by Korean institutes and networks.

• Woo K. Kim, former president of the Korean IT Network, believes that Philip Hwang has motivated Korean large companies such as Samsung, Hyundai, Daewoo, etc to invest in the computer industry and paved out the foundation of the industry because engineers who experienced the industry through his business has spread out to the industry.

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4.2 In-between Korea and US; a Silicon Valley Korean

CEO to work for the Korean large company

• Dr. John Shin has an interesting career of education, research and management. He has acquired technical and management knowledge and networks both in Korea and in USA. He has also tried to apply what he has acquired as researchers and managers as he has managed in Korea and USA.

BA in SNUMA in KAIST

Ph. D in UC Berkeley

Researcher in KIET

CEO in Hynix

CEO in Silicon Image

Researcher/ Manager in

IBM

In Korea

In US

Education Research Management

Founded by

Korean alumni of

UC Berkeley

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• In 1996, he joined Hyundai Electronics (now Hynix) as an executive vice president of memory product and technology development.

• Since then, he led the system IC project which was stopped by the financial hit in the late 1997. He was also confronted with the different working attitudes in Hyundai from the working attitudes of IBM researchers who were self-motivated.

• During the financial crisis of 1998 and 1999, he opened and operated Hyundai DynaLogic, subsidiary of Hyundai, in Silicon Valley to hire and utilize American expertise. It was not successful because the company should absorb Korean researchers of the previous research center and the best Silicon Valley engineers were reluctant to join the company.

• From the second half of 1999, he was asked to lead the “Blue Chip Project” in Korea. The project was to enhance productivity of chip production and produce next generation chips through optimizing and maximizing existing facilities. It was successful though the project was not based on his experiences in the States.

• In the end of 2001, he joined as a vice president of technology development in Silicon Image.

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4.3 Korean engineer who to try to lead technology

development in Korean SMEs

• Dr. TJ Kim has experienced to produce mass technology products in the SDL of Silicon Valley since 1998 after he finished his Ph.D. in the University of Arizona and worked for the NEC Research Institute.

• He joined the COSET, Korean venture company as a founder and chair of the research center in 2001. He was offered to take the CEO position by the investors there, but he couldn’t take it because of his responsibility of several liability guarantees.

• He was offered to work in another venture company, Teralink, which is a spinoff company from the KAIST Lightwave Systems Research Lab. There he was in charge of the technology development but couldn’t mobilize research staffs because the founder assumed the personnel and salary management power over them.

• Then he came back to Silicon Valley in 2005 after working for KITECH which is a government research institute to specialize in industrial extension in Korea and taking professorship in a a local university.

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• Mr. Chris Piercy has begun his venture capitalist career after he had two successful IPOs in Silicon Valley.

• After he married Korean woman and stayed in Korea for one year, he had various consulting experiences for Korean SMEs, even consulted for one of S&T clusters in Korea and invested in a Korean venture company in the area of electronics and internet.

• He was quite sure of the technological competence of the Korean venture companies but found out that the two important venture capitalists’ exit strategies of IPO and M&A are not easily applied to the Korean venture companies; The revenue regulation makes the IPO strategy seriously difficult while the Korean M&A market is too small and large companies such as Samsung are reluctant to acquire venture companies.

4.4 A Silicon Valley venture capitalist who has married a

Korean woman and invested in Korea

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• Therefore when he invested in the Korean venture company, he

would like to take the company to the NASDAQ market. The Korean

CEO whose company he invested in was an excellent scientist. He

provided financial supports not only for the product development but

also for the Korean CEO’s annual salary of 180,000 USD. He could

not control his expensive way of life and personal debts. The Korean

CEO eventually developed products but he paid back his debts with

the revenue he earned from selling his products in Japan. His first

investment in a Korean venture company turned out to be failure.

• He emphasized that the failure cannot keep him from investing in

Korea. He is now mobilizing investment fund and wants to have

more investment in Korea. A few Korean investors of Silicon Valley,

who are successful in investment in Korea, are focusing on Korean

companies and understand Korean entrepreneurs and their attitudes.

• He believes that with more customized portfolio strategies, he can

overcome the IPO regulation, M&A problems, dominance of large

companies, and other institutional and cultural differences.

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4.5 Legacies of past success

• As the Korean economy is leading a few areas and confronted with the uncertainty of technology and marketability, the demands for the Korean diaspora have grown not only for their new technology but also for their management and entrepreneurship.

• The legacies of the success of the developmental state model, which are reflected in the strong entrenchment of stakeholders of Jaebol system, have limited the opportunities for the diaspora to initiate an economic transformation in Korea.

• Three cases of individual diaspora members experiences in Korea were used to illuminate the lock-in characteristics (constraints) of home country institutions; one in a large Korean company, another mostly in small venture companies, and the other in venture capital investment.

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5. Networking of Korean engineers in Silicon

Valley

• The Korean entrepreneurs and high-tech employees were not active in networking by early 2000s; Most of the members are self-employed and few of them are high-tech employees while only the one and half and second generation high-tech employees were actively networking through the KASE (Korean American Society of Entrepreneurs) by early 2000s.

• It is in the 2000s that the Korean engineers and businessmen have actively tried to make their ethnic networks in Silicon Valley; Quite many Korean engineers and businessmen feel that it is necessary to have Korean ethnic network not only for sharing their experiences with young generation but also for sustaining themselves in the Silicon Valley.

• The Korean IT Network (KIN) has taken the pivotal position in networking the Korean engineers and businessmen in Silicon Valley since its inception in 2001 and the BayArea K Group was very recently organized to overcome the limits of the KIN. Therefore it is meaningful to review these two networks to figure out the characteristics of Korean networks of Silicon Valley.

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5.1Korean IT Network (KIN)

• The KIN started its establishment discussion in 2000 and was officially launched in 2001. At the beginning of its establishment, the TiE, Indian Silicon Valley network, was the most important benchmark case for the KIN.

• The KIN was fully supported for the first three years from 2001 to 2003 and half the amount from 2004 to 2005. Since 2006, it became a financially self-sustained network. With the support of government, the KIN has organized annual conferences. Korean large companies and Silicon Valley companies have also sponsored the conferences. It has also organized training courses of global business for local governments and local SMEs.

• JK Kim, board member of the KIN, believes that the KIN can evolve as a business group to trigger the entrepreneurship among the Korean engineers as it provides mutually benefited resources for the members; management training for engineers and technology insights for non-engineers.

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• The KIN now becomes a financially self sustained body mostly from

project-based contracts such as the training courses for Korean

local governments, while it has not been yet successful to mobilize

major players from Silicon Valley and Korea, who can be facilitating

the scale-up dynamics of the network;

- Firstly most of Silicon Valley Koreans are engineers and they are

hardly in the position to hire other Korean engineers and they, if a

few Korean VPs and project managers have the authorities, are not

actively participating the KIN activities because they are not

benefited from the network activities

- Secondly the large Korean companies such as Samsung, KT, SKT,

etc. could be major resources for the scale-up process. The KIN

could play a platform to trigger the match making processes

because of the members who were only interested in commission

fees and blocking the process by filtering and twisting the

relationship in their tastes.

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• Financial support from the Korean government to trigger the

networking activities seems to be necessary because there is not

sufficient number of Koreans in Silicon Valley, compared to Chinese

and Indian networks of Silicon Valley.

• The problems which were raised in a Korean IT newspaper article in

2001 as it received the financial support from the Korean

government are not yet overcome;

It is hopeful that the Korean government announced it would held

the (official) first meeting to organize the Korean IT Network in

Silicon Valley this coming June. There is no potential for the further

progress, if this network is considered in a political and

administrative perspective by the Korean politicians and government

officials.

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5.2 The BayArea K Group (K Group)

• In a certain conference of the 2006 spring, a couple of young Korean engineers and businessmen most of whom are in their thirties and studied in the US came to TJ Kim to offer an advisor position of the Korean network in Silicon Valley they are preparing. And the network had its inauguration meeting at June 2006, which is the BayArea K Group.

• Most of the initiators of the K Group feel that it is necessary to have their own ethnic network to share their experiences and to help each other to find jobs and to encourage new entrepreneurship in Silicon Valley as they are confronted with other ethnic groups such as China and India. They believe this network may also contribute to the development of the home country of Korea;

There are various ethnic groups in Silicon Valley. Especially the Chinese and Indian networks are famous for helping each other through their networks. Then they could take important positions in the Silicon Valley companies and contribute to the job creation and knowledge transfer to their home countries through R&D centers relocation to their countries. It is the time for the Korean professionals in Silicon Valley to take rank with them. For that purpose, it is necessary to have a practical networking and to share personnel and other expertise information (K Group homepage).

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• This need of Korean ethnic network is not only for the founding members of the K Group but also for other Korean engineers and businessmen in Silicon Valley. Registered number of the K Group members continues to increase to reach eight hundred, which is almost forty percent of the whole Korean engineers in Silicon Valley. Every activity is voluntarily organized and operated which is another reason of the rapid growth of the K Group.

• Two pillars of the K Group are entrepreneurship for start-ups and job/career management. It organizes various technology seminars, talks with Korean venture capitalists, beer meetings with senior Silicon Valley Koreans of 50s and 60s.

• Small group meetings are also important tools for the members to share their experiences and to help each other. The K Group has seven sub groups and a special relationship with the independent BAKAS (Bay Area Korean-American Scientist in Biotech and Pharmaceutical).

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• The poor contribution of the KIN is another reason to establish the K Group. Peter Bae, the current chair of the K Group, believes that the KIN is now shrinking after the financial support from the Korean government finished. It couldn’t satisfy the needs of members because it focuses only on show-up events. It couldn’t coordinate needs and capabilities of its members.

• As for the management of K Group, he and his members are reluctant to receive financial support from Korean government. If it receives, the K Group should organize show-up events to promote government policies to satisfy government officials’ requests. This is not helpful to anyone whether it is government, companies, or K Group members. Instead the K Group is collaborating with the KITECH (Korean Institute of Industrial Technology) USA Technology Cooperation Center.

• The K Group is now passing through very difficult times since the Silicon Valley economy was hit by the global economic turbulence. Quite many members of the K Group were laid off. This situation may also be an opportunity for the K Group because the laid off members are more eager to attend the various meetings to find their jobs, which is one of the K Group’s important mission.

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5.3 Two different networking

• The Korean network has been actively mobilized in 2000s in Silicon Valley. The two important networks of the Korea IT Network (KIN) and the BayArea K Group paper were compared for their formation, evolution, and future prospects.

• The KIN has almost ten years experiences in Silicon Valley. It has been installed in Silicon Valley by the strong support of Korean government, especially former Ministry of Information and Communication. It is now financially self-sustained but does not function as a platform to solve the real problems for the Korean diaspora; job finding and helping venture start-ups.

• The BayArea K Group, which is now two years old and very bottom-up association, has pursued to solve the real issues. Though this has mobilized eight hundred members of Korean engineers, scientists and businessmen in Silicon Valley, it is struggling to sustain its network activities because it is reluctant to receive government support and also passing through the global economic turbulence.

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6. Discussion and policy implications

• The economic success of Korea during last several decades has made matters worse for the Korean diaspora to contribute to the institutional transformation of home country.

- On the one hand, the critical mass creation of ethnic networks in the knowledge hub of the world such as Silicon Valley was delayed.

- On the other hand, the home country of Korea has strongly locked in the previous success experiences. The outsiders’ experiences and knowhow have not been easily tapped in.

• Korean entrepreneurs and engineers, however, began to mobilize themselves as resource networks as they are confronted with the severe competition from diverse ethnicity competing communities during the economic uncertainties and turbulence.

• This self motivated Korean ethnic network, combined with strong demands for diaspora’s experiences from Korea, has generated new conditions for the Korean diaspora to mobilize their resource network to contribute to their home country.

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• This paper argues that the very bottom-up Korean ethnic networks in Silicon Valley is necessary not only for the Korean engineers to help each other in Silicon Valley but also for them to return to Korea.

• To design the institutionalization strategies, the receptivity of the clusters to returning diaspora members needs to be diagnosed in Korea for the economic and institutional change can be ignited in a certain location or domain with the participation of a highly skilled diaspora (Saxenian, 2006).

• The strategic coupling of Silicon Valley diaspora networks and Korean supply chains, most of which has been exploited by large companies, in locally embedded business environments may trigger the mutually benefited process.

• This may lead to self sustained Korean diaspora networking in Silicon Valley and institutional transformation of local suppliers with overcoming developmental state legacies.

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