The National System of Innovation as a Co-evolutionary The National System of Innovation as a Co-evolutionary Regime for Socio-Technical TransitionRegime for Socio-Technical Transition

Sangook ParkSangook Park

SPRU, University of SussexSPRU, University of Sussex

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Contents

Part I. Brief introduction of my Ph.D. project

The National System of Innovation as a Socio-Technical Regime: Co-evolution of Technology and STI Policy in the Early Stages of the Hydrogen Energy Transition.

Part II. Ongoing WP on the result from Korean case study

R&D Network as a Precursor to an Emerging Sectoral System of Innovation: Evolution of the Hydrogen Energy Sector, Incubated by Government Funding Programmes.

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Context of this research

The NIS concept had contributed to explain the national dependence of econ

omic development on its first phase in 1980s. (Freeman, Lundvall, Nelson) : Un

derstanding what has happened.

Until recently and going on, researchers has been using the NIS concept to s

how international differences in capability, growth, performance, etc. (Verspage

n, Fagerberg, Godinho …) : Seeing what is going on.

Various systemic approaches have been located at the centre of STI researc

hes.

In this research, the NIS is to be seen as a regime for co-evolution of everythi

ng (actors/components, tangible/intangible things), especially the co-evolution o

f an emerging technology and STI policy for it, emphasizing social aspects, co

mbined with socio-technical system theory.

Part I.

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Societal aspects of emerging technologies, especially (large) energy technology

“I wish to emphasize only that there are numerous compelling reasons

for preferring one energy form over another. Energy models that do not

take these reasons into account will be very inadequate guide to future

energy policy making.” (Rosenberg)

“Consumers cannot possibly be aware of the various long-term side

effects of a multitude of individual choices about many products….Yet the

social costs may well be so great that they negate the private benefits to

most consumers.” (Freeman)

• Innovations and deployment of sustainable energy technologies have been d

riven by supply-side actors and government policies, rather than consumers’ d

emand.• Social acceptance and technical compatibility became key factors in a large t

echnological system transition.

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Relatively new and growing Interdisciplinary Not a big, unifying theory but a mixture of theories

Theories

(large) Technological System Theory

Actor Network Theory

Socio-technical system theory

• System builder• Pattern of evolution: inventiondevelopmentinnovation

transfergrowth, competition and consolidation• Energy systems, transport and social infrastrucre• Hughes(1983), Hughes(1989), Coutard(1999)

Innovation System Theory

• Actor, actant and their network• Mediator• Translation, Purification, Inscription• Latour(1987, 2005), Callon(1989)

• Components, actors and their networks• Institution, culture and government policy• Interactive learning• National, regional, sectoral level• Freeman(1987, 1997), Lundvall(1992), Nelson(1993),

Edquist(1997)

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T im eT im e

L a n d sc a p e d e v e lo p m e n ts p u t p re s su re o n e x is tin g re g im e , w h ic h o p e n s u p , c re a tin g w in d o w s o f o p p o rtu n ity fo r n o v e lt ie s

S o c io - te c h n ic a l re g im e is ‘d y n a m ic a lly s ta b le ’.O n d iffe re n t d im e n s io n s th e re a re o n g o in g p ro c e ss e s

N e w c o n f ig u ra tio n b re a k s th ro u g h , ta k in ga d v a n ta g e o f ‘w in d o w s o f o p p o rtu n ity ’ . A d ju s tm e n ts o c c u r in s o c io - te c h n ic a l re g im e .

E le m e n ts a re g ra d u a lly l in k e d to g e th e r,a n d s ta b il is e in a d o m in a n t d e s ig n .In te rn a l m o m e n tu m in c re a se s .

L e a rn in g p ro c e s se s ta k e p la c e o n m u ltip le d im e n s io n s .D iffe re n t e le m e n ts a re g ra d u a lly l in k e d to g e th e r in a se a m le s s w e b .

N e w s o c io - te c h n ic a lre g im e in f lu e n c e s la n d s c a p e

Tech n o log ica ln ich es

S oc io -tech n ica l’lan d scap e

S oc io -tech n ica lreg im e

Te c h n o lo g y

M a rk e ts , u se r p re fe re n c e s

C u ltu reP o lic y

S c ie n c eIn d u s try Components and network in the

socio-technical regimeWhere co-evolution take place.

Landscape:• Global environment• outer-regime factors• Interaction with the regime

Niche:• New and emerging technologies• Competition • Technology trajectory

Geels(2004)

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EmergingTechnology

Governance:mediator

Policy

STAGE I STAGE II STAGE III

possibilityDevelopment/commercialization consolidation

social change

Promotion ofR&D/ risks

+ demonstration/ industry formation/ market rules/ social acceptability

+ Regulation/ social effects/ competitiveness

emergence

researchers

maturing complex

+ Government/ industry

+ civil society/ users

all the people

Co-evolution of emerging technology and policy, mediated by governance

scientific evidence

engineeringfeasibility

innovation

Co-evolutionary paths depend on national systems of innovation• It is not necessary to start from stage I • The direction is not time-dependent: stage-up can occur discontinuously• Some countries may take the reverse-direction

Framework

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FrameworkComponents and actors in NSI which influence the co-evolutionary pathway in e

merging energy technology

STI policies for emerging technology: • Communication language and learning process between various actors• Steering the direction of co-evolution• Influenced by actors and also influencing actors (Interacting)• They are forms of institutions and they are transforming institutions• Initial code for industry formation and market rules (standards, regulations etc.)

NIS basic factsR&D capacity

Market conditionInstitutions

Governance & political systemSocio-economic aspects

Networks of actors, especially firms (MNEs, LFs, SMEs)

Strategic aim of a nationMajor target technologies

/ technological pathwaySTI policy

Industrial policySTS policy

Interactions/ Co-evolution

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Framework and methodology

Analysing NISs of three selected countries Comparative analysis of hydrogen R&D and energy policies

Iceland: A test-bed for the first Hydrogen Society in the world. United Kingdom: A European developed country, putting more weight

on sustainability. South Korea: Lately developed country with a rapid catching-up experi

ence.

Semi-structured interviews (government, quasi-government agencies, firm

s, policy researchers, scientific researchers, NGO etc.) Iceland: 7 interviews United Kingdom: 13 interviews so far (planned more) South Korea: 18

Social Network Analysis United Kingdom: Evidence for policy networks South Korea: will be presented in this presentation

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Results: NSI and co-evolutionary pathways

Iceland: a living-scale experiment of socio-technical transition

Economy & energy environ.

Small economic size with high GDP per capitaPopulation: 270,000Plenty of renewable energy (hydropower and geothermal)

Society & culture

Small, primary societyEnvironment-friendlyChallengingEnergy transition experiences(coal gas renewable)High social acceptability

STI and Industry

Low technological capabilityFishery Aluminum processing FinanceEnergy firmsAlmost no manufacturing industry except aluminum

Policy Transportation (FCV and marine use), demonstration, social acceptance

Oil-free country

Focused hydrogen technology

Hydrogen storage, on-site hydrogen generation

Knowledge from operation

Governance Small, simple, primary, flexible and effective

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Evolution of hydrogen energy policy in Iceland

(~1997)

No specific policy or R&D programme on hydrogen energy

Small group in scientific community discussed about the possibility

(1998)

The government statement on the Hydrogen Economy (world 1st)

It was resulted from the converging of following three parts; the characteristics of natural

environment of Iceland, the debates of Icelandic scientist, and the inspiration from the

changes of global status about Hydrogen energy.

Drivers: aluminum industry, Kyoto protocol, energy security

(1999~2005)- The Icelandic New Energy Ltd. established, which has performed most of activities- Demo projects like fuel cell bus, Hydrogen fuelling station

- Social aspect studies and developing PR.

- International partnership; IPHE- Supporting domestic R&D

(2006~)

- National Hydrogen Roadmap: Strategic selection of target technologies, the plan for

deployments

- Second phase demo projects

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United Kingdom : Sustainability matters

Economy & energy environ.

Large economic size with high GDP per capitaNorth Sea oilLong history of industrialization and economic changes

Society & culture

Large, complex societyHigh environmental concernSensitive to climate changeHigh social acceptability for renewable energyMature civil participation

STI and Industry

High technological capabilityBut weak manufacturing industryLarge energy firmsService industryActive and good-quality policy researches

Policy Sustainability & against the climate change, energy security

Many policy-suggestion bodies, including interest groups, NGOs, and policy researchers

Focused hydrogen technology

Hydrogen generation and storage as an electricity storing method

Governance fragmented, complex governance

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Evolution of hydrogen energy policy in the UK

(~2001) Research-councils based, less-organised R&D programmes (2002) DTI started organised activities, such as formation of network of interest groupsThe Carbon Trust established. (2003) Fuel Cells UK: A fuel cell vision for the UK 2003 - It emphasised the possibility of fuel cell technologies.- It requested leadership and vision on fuel cells, contained messages to stakeholders, and

requested for government actions.(2004) Tyndall Centre: Hydrogen Energy Scenarios to 2050 - To map out the stages required for a national energy infrastructure based on hydrogen

produced from renewable sources.(2004) A strategic framework for hydrogen energy in the UK (official policy paper)- Hydrogen energy is a desirable addition, to CO2 reduction and improved upstream energy

security as key goals for UK innovation and wealth creation.- The UK’s technical strength and industrial weakness(2005) Fuel Cells UK: Roadmap for fuel cell sector development - Assessment of the UK situation: strength and weaknesses in fuel cells- Steps, actions and timescales to overcome challenges(2005 onward)) UK sustainable hydrogen energy consortium: UK Hydrogen Futures to 2050 - Roadmap development and designing scenarios - Hydrogen transition (adopted socio-technical system approach)- Various social aspects, such as acceptability and risk

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South Korea: Catching-up / hydrogen as a new industrial opportunity

Economy & energy environ.

Large economic size with mid-high GDP per capitaDepends on imported fossil fuelsUnderdeveloped renewable energy Big firms (BGs) are important

Society & culture

Large, complex societyLittle environmental concernChallenging cultureRapid changesHigh social acceptability for new technologiesImmature civil participation

STI and Industry

High technological capability, especially applications & productionElectronics and automobile industry GRIsLess policy researchesCatching-up in not only technologies but also policies

Policy Industrialization of FCV and energy security

Benchmarked foreign policies, mainly U.S. policy

Focused hydrogen technology

Fuel cells

Governance Centralized, top-down (government lead), lack of policy research capability

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Evolution of hydrogen energy policy in South Korea

(~2002)

Several national-level R&D programmes on hydrogen energy as part of new & renewabl

e energy research. (Hyundai Motor Company started in-house R&D on FCV in 1998)

(2003)

Fuel cell technology was selected as the one of ten ‘Next Generation Technologies for

Economic Growth’

The first policy research report on Hydrogen technologies was reported to the

Presidential Advisory Council of Science and Technology; This report was mainly

technological, paid no attention on scenarios or socio-economic aspects.

(2004)

National RD&D Organization for Hydrogen & Fuel Cell, was launched.

South Korea joined IPHE

(2005)

The Hydrogen Economy Master Plan published by MOCIE

This can be regarded as mostly R&D policy, partly energy usage forecasting.

- The aim of this master plan is shown clearly that it is focused on the industrialisation of

fuel cell vehicle. (industrialisation > energy security > sustainability)

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Results: Policy-steered technological development

• Socio-technical regime (NSI) influences R&D activities

• Government policies strongly steer the direction of technological trajectory.

Comparison of UK and South Korea

1. Hydrogen technology emerging, and Korea’s catching-up in hydrogen technologies

SCI publications in the UK and South Korea. Subjects related to Hydrogen generation, storage, and fuel cells.

0

50

100

150

200

250

300

kor- alluk- all

kor-all 6 2 7 10 24 37 32 46 68 86 104 131 155 231 235

uk-all 85 98 91 91 109 147 149 177 162 196 166 204 190 232 246

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

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0

20

40

60

80

100

120

140

160

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

kor- stouk- sto

0

20

40

60

80

100

120

140

160

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

korea- genuk- gen

0

20

40

60

80

100

120

140

160

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

kor- fcuk- fc

0

20

40

60

80

100

120

140

Number of US patent applications

2. Technology selection: SCI publications decomposed

Hydrogen generation Hydrogen storage Fuel cells

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Conclusion

• Co-evolution in NSI: A dynamic transition• Everything in the system co-evolves, interacting with each other.• STI policies are steering the co-evolutionary pathway. STI policies are not

only the product from but also the language of interactions among actors an

d institutions.

• National System of Innovation as a co-evolutionary regime• This research shows that national dependence exists not only in performan

ce and capability, but also in evolution of policies.• The dependence and differences were resulted from systemic factors.

• Social aspects: historical and cultural perspectives• Existing strong industry• Governance: social capital, civil participation, and policy networks• Institutional and organisational aspects

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Part II. Ongoing WP on the result from Korean case study

R&D Network as a Precursor to an Emerging Sectoral Syste

m of Innovation: Evolution of the Hydrogen Energy Sector in Kor

ea, Incubated by Government Funding Programmes.

Sangook Park

SPRU, University of Sussex

Hyun-do Choi

TEMAP, Seoul National University

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The emergence of a new SSI (Malerba, 2002, 2007)

1. Emerging knowledge base

- From scientific and technological development (not necessarily new)

- From emerging social demand, or from socio-technical landscape changes

2. Formation of networks

- (sometimes) Aided by government policy

- Global industrial trend / activities of MNEs

3. Involvement of existing actors and new actors

- Number of startups in the sector can be an indicator of SSI emergence.

- The role of government / quasi-government agency is important, especially

when it is immature.

4. Institutions, evolving

- With existing institutions, in the early stages of the emerging SSI.

- Institutions are co-evolving, within the evolution of the SSI.

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Obstacles against the emergence of a new SSI

1. Uncertainty and risk

- Technological uncertainty

- Unknown social acceptance of the new technological system

2. Possible system failure

- Absence of relevant industry policy

- Difficulties in transition management

3. Resource and investment

- (sometimes) Infrastructure is needed

4. Difficulties in knowledge flow

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Government funding programmes as catalysts

Building capabilities for the future

Seeding and managing of knowledge networks (between universities,

GRIs, and firms)

Reducing uncertainties of under-realised technologies

Direct/indirect subsidizing firms, especially SMEs, to encourage their

involvement into the emerging sector.

Part of STI policy and/or industrial policy activities

Also, formation of policy network which is specialised to the technolo

gy

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R&D networks as precursor to the emerging SSI

Malerba (2002, 2007) wrote about the main building blocks of a sectoral

system of innovation and production as being identified by the following ones:

• knowledge base and learning processes

• basic technologies, inputs and demand, with key links and dynamic complementarities

• type and structure of interactions among firms and non-firms organizations;

• institutions

• processes of competition, cooperation, and coevolution.

AND/OR three building blocks as:

1. Knowledge and technological domain 2. Actors and networks

3. Institutions

R&D networks can be regarded as a precursor to the sectoral system

• R&D networks have many of above identifications.

• R&D links can evolve to value chains, R&D collaborations can evolve to busi

ness collaborations/alliances. So can R&D competitions.

• They will co-evolve, interacting with other components in system.

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Methodology

Social network analysis on government R&D funding programmes in Korea 19

89~2005• Network maps were drawn by using UCINET software• Non-R&D bodies such as the government and quasi-government agencies w

ere intentionally omitted.• Any participation in the same programme was marked as one link between n

odes, with no weight given.

year Programme

1988~2004 New and renewable energy technology development (hydrogen division)

1992~2001 G7/ new energy technology development (fuel cell division)

1998~2001 G7/ Next-generation vehicle technology development

2000-2002 High efficiency hydrogen generation technology development

2003-2005(cont.)21C Frontiers/ high efficiency hydrogen energy production, storage, and

application

2004~2005(cont.) Hydrogen and fuel cells national research

2004~2005(cont.) Fuel cells core technology development

2004~2005(cont.) Driver for growth/ Future vehicle technology development

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Results

Firms Universities GRIs

1989~1991 1992

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Firms Universities GRIs

1993 1994

27

Firms Universities GRIs

1995 1996

28

Firms Universities GRIs

1997 1998

29

Firms Universities GRIs

1999 2000

30

Firms Universities GRIs

2001 2002

31

Firms Universities GRIs

2003 2004

32

Firms Universities GRIs

2005

33

0

5

10

15

20

25

30

35

40

45

50

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

number of large firms

number of SMEs

0

2

4

6

8

10

12

1998 1999 2000 2001 2002 2003 2004 2005

# of ties, LFs

# of ties, SMEs

Dynamics of formation of the new industrial sector

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Firms

• Large firms were pre-existing actors

– Conventional energy firms, former national: Korea Gas, KEPCO etc.

– Conventional energy firms: LG-Caltex (MNE), SK corp, etc.

– Non-energy firms

• Hyundai Motor Company

• LG Chemical

• POSCO (steel)

• LG electronics

• SMEs were mostly technology-specific startups

– Growing importance of the roles in the network, but less links than LFs.

– Not only R&D, but business partnership with large firms

– Focusing on components and materials, rather than system

– Fuel Cell Power, Heung Chang Carbon, etc.

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Analysis and discussion

• Pattern and characteristics found in evolution of R&D network

– Increasing number of involving firms (snowball, critical mass?)

– R&D bodies large firms SMEs

• Role of government-funded research institutes (GRIs: KIER, KIST, KATEC

H, KIMM)

– R&D: intermediate technologies

– Network hub: the centre of knowledge flow

– Quasi-government agency; sub-contracting, performing demo project

– Policy input

• Evolution of knowledge networks are

– Collective, rather than fragmentizing

– Cumulative: the importance of key actors are growing

– Existing-sector compatible, rather than disruptive

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Thank you.