Shifting geo-political and economic ties offer new opportunities
A few years ago, Russia and South Korea embarked on a joint space programme. Not without teething problems – the first launch went smoothly but the satellite did not make it into orbit – it was emblematic of a growing industrial partnership between the two nations.
Korean conglomerates such as Samsung and LG had been hiring scores of engineers and scientists at their research centres in Russia, which are responsible for registering many international patents annually.
“Probably more important for us is technology outsourcing,” said a spokeswoman at LG, which employs some 150 engineers and scientists in its lab at St Petersburg and a further 50 people in its Moscow office who are devoting themselves to arranging technology outsourcing in Russia.
Tie-ups thrive as each country complements the other’s weakness, according to Michael J Panzner, an investment analyst. Panzer, who has worked in New York and London for HSBC, Soros Funds, ABN Amro, Dresdner Bank, and JP Morgan Chase, has studied the economic relationship between the two countries.
Korea, home to leading makers of TVs, mobile phones, flat-panel screens, cars, and ships, is helping its Russian partners to commercialise technologies and apply them in mass production while taking advantage of Russia’s excellent research on basic sciences and original technologies, said Panzner.
Both Samsung and LG, for example, develop in Russia software platforms for their mobile phones, chips used in digital products, and optical solutions.
Reluctance by Western companies to share technologies with Korean rivals was another reason for Koreans to forge partnerships with the Russians. “The Japanese, Germans, and Americans either deny access to their stateof- the-art technologies or charge exorbitant license fees to Korean rivals,” according to senior researcher Cho Joong Hoon at the state-funded Korea Institute for Advancement of Technology.
“Russians are also more accommodative in negotiating terms for sharing intellectual properties after joint R&D.” The trend began in the early 2000s, said Panzner, when Korea’s companies attempted to start leapfrogging their Japanese mentors with innovation. At the time there was no shortage of access to Russia’s underemployed educated class because of economic difficulties in their nation. Many Russian engineers worked in Korea for years at labs run by companies and the government to help iron out problems in the course of rolling out leading-edge products.
Examples of Russian achievements abound in the line-up of popular Korean products. Russian brains helped Samsung develop the imageprocessing chips in its digital TVs and refine its frequency-filtering technology that significantly reduced noise on its now-ubiquitous handsets.
Russian scientists from Moscow State University also helped develop LG’s efficient cooling pipes that bolster its air conditioners, while the technology that was once used to cool Soviet tanks was applied for a multicompartment appliance that chills, ferments, and stores kimchi, the spicy, pickled cabbage served on virtually every Korean dining table.
“Now with the Russian economy back on its feet, many Russians have returned home. But big Korean companies have already firmly established their research centres in Russia. So the Seoul government’s current focus is on maintaining technological cooperation with Russia for Korea’s small and midsize companies,” said Panzner.
“The government is running a pilot project this year to help smaller companies find Russian partners with original technologies,” said Kim Gwang Seok, a deputy director at the Knowledge Economy Ministry, which gives out up to $320,000 to each select start-up seeking a technological breakthrough together with a Russian engineering partner.
There are early signs the government project could prompt start-ups to seek innovation. “Partnership with the Russians allows us to tackle ambitious tasks that would be too complex and costly otherwise,” said Chief Executive Ahn Saeng Youl of Wookwang Tech, a beneficiary of government aid.
Wookwang, an electronics components maker, plans to sell a power cable monitoring system that combines a chip-based sensor technology developed by Russia’s St Petersburg State Polytechnical University with wireless communications to quickly detect abnormal power distribution. “Government involvement also provides credibility when we seek ventures with Russian partners,” added Wookwang.
The Seoul government planned to expand the aid project if the pilot project proves successful. “There are good business potentials for a win-win in this project,” said ministry official Kim Gwang Seok. “Both parties will benefit if the Koreans’ production and application technologies could be married to advanced research results in Russia that have not been put into commercial use.”
But South Korea is now aiming to establish such partnerships with the West, in America and Europe. Last month, it was announced that Strathclyde University had been selected as the exclusive European partner university for South Korea’s global research and commercialisation programme.
The Global Industry-Academia Cooperation Programme, funded by the Ministry of Knowledge and Economics (MKE), will see Strathclyde academics working with technology companies in South Korea, providing leading-edge research and creating business opportunities in areas including health, electrics and electronics, and new materials. The news follows the establishment of the Georgia Institute of Technology as Korea’s sole university partner in the USA in 2010.
Representatives of the Ministry and the Korea Institute for Advancement of Technology (KIAT) – an institute under MKE – visited the university to meet some of the leading academics who have teamed up with Korean firms.
Professor Jim McDonald, Principal of the university, said: “This partnership is fantastic news for Strathclyde and to be chosen ahead of many other top European institutions is an indication of our growing reputation as a leading, international technological university.
“Working with industry, sharing knowledge and engaging with the wider international community are defining characteristics of the University of Strathclyde, and this agreement provides a platform to ensure our leading research is well-utilised throughout the world.”
The Korean Government’s Global Industry- Academia Cooperation Programme will provide funding each year to support the development of research expertise between the university and Korean small to medium-sized enterprises (SMEs).
Chang-ha Lim, Senior Researcher at KIAT, said: “KIAT is very pleased that the University of Strathclyde has been selected as our European partner in the Ministry of Knowledge and Economics’ Global Industry-Academia Cooperation Programme.
“Along with the Georgia Institute of Technology, our partner in the USA, the University of Strathclyde will be able to work with Korean SMEs and to obtain funding for the cooperation programme.”
The University of Strathclyde was selected in a competitive process from a shortlist of six higher education institutions across Europe and received support from Scottish Development International (SDI) to secure the contract.
Anne MacColl, Chief Executive of SDI, said: “This partnership very much endorses Scotland as an academic and industry partner of choice. This is especially true given that the endorsement is from the Korean government that chose a Scottish university over any other in Europe in its search for an institution with a strong track record of success in commercial innovation and industry-driven research capability.
“We know that research and commercialisation are key drivers of growth and by collaborating with other countries we can further enhance our reputation on the global stage as a knowledgeled economy. This is about delivering long-term, sustainable partnerships and economic success for Scotland.”
As part of the agreement reached between Strathclyde and the Korean Government, funding will support both feasibility study projects and full-scale research and development projects in a range of technology areas including industrial materials, clean manufacturing, transportation and logistics, bio and medical devices, knowledge services and service networks, robotics, software and computing, electronics and information devices, industrial convergence and the next generation of mobile communication media.
Dr David McBeth, Director of the university’s Research and Knowledge Exchange Services, added: “To be named as the sole European partner university by the Korean government provides a unique opportunity to build on the existing links of our academic staff to Korean companies and enhance the impact of Strathclyde’s research internationally. I am hopeful that, in due course, the programme will open up opportunities for economic activity for Scottish companies as the collaboration matures.”