Standards Infrastructure as a National Growth Engine: from Imitator, Imovator, to Innovator por Dr. Dong Geun CHOI

23 August 2011 (version 2)

Donggeun CHOI Chief Manager, Korean Standards Association (KSA)

Guest Researcher, National Institute of Standards and Technology (USA)

Standards Infrastructure as a National Growth Engine:

from Imitator, Imovator, to Innovator

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Contents

I. Warming Up Quiz about South Korea

II. Korea’s Economic Growth

III.Economic Growth with Korean Standards

IV. Changing Global Business Environments

V. Future Agenda 2

I. Warming Up Quiz about S-Korea

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Q. Basics of about S-Korea?

Q1. Where is it?

Q2. How warm/cool is it?

Q3. How big is it?

Q4. How many live there?

Q5. How many live in Seoul Metropolitan area?

Q6. What is the GDP in 2010?

Q7. What is the GDP ratio of 2010 by 1960?

Q8. What is the ranks of GDP and Trade in 2011?

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Q1. S-Korea: where is it? Where is Korean Peninsula Located in Asia?

1) North-Eastern Asia

2) North-Western Asia

3) South-Eastern Asia

4) South-Western Asia

*Between China and Japan

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Q2. S-Korea: how warm/cool is it? What is the common weather of Seoul, S-Korea?

1) August:51°F-66°F, January: 01°F-15 °F

2) August:61°F-76°F, January: 11°F-25 °F

3) August:71°F-86°F, January: 19°F-33 °F

4) August:81°F-96°F, January: 29°F-43 °F

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Q3. S-Korea: how big is it? S-Korea is around OO% of Peru in size

1) 8%

2) 13%

3) 18%

4) 23%

* South Korea: 100,032 km2, Peru: 1,285,216 km2,

- Lima region: 32,129km2, - Junin regoin: 44,197 km2, - Pasco region: 25,319 km2

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Q4. S-Korea: how many live there? S-Korea is around OO% of Peru in population

1) 75%

2) 115%

3) 145%

4) 165%

* Peru: 30,135,875; S-Korea: 50,004,441 (2012 July)

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Q5. S-Korea: how many live in Seoul Metropolitan area?

Seoul Metropolitan area (Seoul plus 50k near by area)

is around OO% of Peru in population

1) 25%

2) 50%

3) 75%

4) 100%

* Seoul metropolitan : 23,616,000 (Seoul + Incheon + Gyeonggi

province)

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Q6. S-Korea: What is the GDP in 2011?

Which country is most comparable (IMF, PPP, $Million)?

1) Argentina (716,419)

2) Brazil (2,293,954)

3) Mexico (1,661,640)

4) Peru (301,967)

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Q7. S-Korea: What is the GDP ratio of 2010 by 1960?

What is the growth rate 1960-2010?

1) 50 times

2) 100 times

3) 200 times

4) 250 times

* Peru: 2.5B to 154B (60times)

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**GDP nominal in 1960-2010 - 4B to 1,000B (250 times)

13B to 1,000B (Mexico 75 times), 15.2B to 2,100 B (Brazil, 130 times)

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**GDP per Capita in 1960-2010 - 155 to 22,424 (nominal)

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Value of imported goods and services as percentage of GDP.

Q8. S-Korea: What is the ranks of GDP and Trade in 2011?

GDP nominal and Trade volume ranks?

1) GDP: 8th - Trade: 15th

2) GDP: 12th - Trade: 22nd

3) GDP: 15th - Trade: 8th

4) GDP: 22nd - Trade: 12th

* Exports(7th) and Import(8th)

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So, What do these mean? - Korea’s Development

Rapid and Successful Development in the 1960s-90s

Short and Quick Industrialization History

Government Leadership based Success

Limited Private Sector Leadership

Export/Imports Trade Dependent Country

All of above applies to Standards Infrastructure

US-Korea is major trading partners in both Goods/Services

Standards Governance of Trade Partner May Matter

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II. Korea's Economic Growth

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1. Korea’s Economic Growth - GDP and Export

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Korea’s National Strategy

Export-driven Growth Strategy

Globally-harmonized Open Policy

GDP (12th )

Export (9th)

GDP: (1970) 3 B-USD (2009) 1,364 B-USD

Export: (1970) 0.8 B-USD (2009) 364 B-USD

Source: IMF

2. Korea’s Economic Growth – World Class Product

The number of Korea’s World Class Products has grown ten times: (‘01) 55 products (‘09) 387 + 197

World Class: ranked within top 5 in global market share Movie clip of ‘Korea’s World Class Products’ (MKE)

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3. Korea’s Economic Growth – World No.1 Products

Korean Product with No.1 Global Market Share (2002) 49 Products (2009) 148 Products

Expansion of world No.1 products has been supported by export-driven policy and globally-harmonized standardization strategy

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Products M.Share Companies

Memory/DRAM 50.0%Samsung Electronics,

Hynix

TFT-LCD 46.0%Samsung Electronics,

LG Philips LCD

PDP 52.0%Samsung SDI,

LG Electronics

LNG Carrier 73.0%Hyundai Heavy Industry,

Samsung Heavy Industry

CDMA Mobile Phones 38.0%Samsung Electronics,

LG Electronics

Flash Memory 54.0%Samsung Electronics,

Hynix

Industrial Monitor 70.0% Kortech

large-size marine

diesel engine61.3%

Hyundai Heavy Industry,

Doosan Engine

4. Korea: Industry Development - 1950s to 2010s

50-60s Raw, Agric,

Marine.

70s Light Industry

Fabrics, Clothing

80s Heavy Industry

Ship, Auto

90s EE product

00s ICT

10s Smart Product

Knowledge Serv

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5. Korea: National Priority Evolution - Standards and Quality Infrastructure

‘60: Legislation, Organizations

• ISA, MA, PSA

‘70-’80 : Quality Control

• KS certification, TQC, QC-Circle, Quality Control

’90 : Quality Management

• ISO 9000, WTO-TBT, International Standard

‘00 : Internet, Climate Change

• Web-base technology, E-commerce, GHG reduction,

• Sustainability

’10 : Smart Technology, Convergence Industry

• IT-convergence, mobile, smart phone, smart car, smart home, smart city

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6. Korea: Key Legislation Timeline 1949 Agriculture Inspection Act

1961 Industrial Standardization Act

1961 Measurement Act *1992 Act on Weight and Measurement *2000 Measures Act

1967 Industrial Product Safety Control Act *1993 Quality Management Promotion Act *2000 Quality Management and Industrial Products Safety Control Act

1974 Electrical Appliances Safety Control Act

1980 R.O.Korea’s Constitution (27 Oct)

The State shall establish a system of national standards.

1999 National Standards Framework Act

2010 Framework Act on Product Safety

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7. Korea: Key Legislation - Standards, CA, Measurement

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8. Korea: Key Organization Timeline 1961 Bureau of Standards (within Ministry of Commerce)

*1973 (IAA) Industrial Advancement Administration

*1999 (KATS) Korean Agency for Technology and Standards

* merged with National Technology and Quality Agency

- 1994 (KOLAS) Korean Laboratory Accreditation System (AB for labs)

- 2001 (KAS) Korean accreditation system (AB for product certification)

1962 (KSA) Korean Standards Association

1975 (KSRI) Korean Standards Research Institute

*1991 (KRISS) Korean Research Institute for Standards and Science

1990 (KASTO) Korea Association of Standards & Testing Organizations

1995 (KCA) Korean Association for Quality and Environment

Certification * 2001 (KAB) Korean Accreditation Board

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9. Korea: Key Organizations

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G

G

G

G

III. Economic Growth and Korean Standards

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1. Korean Standards – Publications 1962-2009

300 1081

1846

4698

7029 7475 8552

9368

10845

15176

19865

22058

23372

0

5000

10000

15000

20000

25000

62 65 70 75 80 85 90 95 00 02 04 06 09

•1962-2000 : Zero to 10,000+ KSs • Production Based Standards; Mainly from JIS, BS, DIN, ASTM, etc

•2000-2010 : 10,000 to 20,000+ KSs • Function based Standards; Mainly from ISO, IEC

Imitator

Imitator

+Innovator

= Imovator

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Mainly from JIS,

BS, DIN, ASTM, etc

Mainly

from ISO, IEC

2. Korean Standards – Number of Publications

KS iSO/IEC DIN BS JIS

10,000

20,000

30,000

40,031 39,555

23,372

10,864

24,229

40,000

No. of Standards

Quantitatively, the number of KS is world class level

Similar to the total volume of ISO plus IEC

Consideration of industrial changes,

Korea employed new classification system in KS: In line with ISO ICS (International Classification System)

More standards on functions and processes than product standards

I E C 6,146

ISO 18,083

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3. Korean Standards – mainly originated from ISO/IEC

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Original (15%)

JIS, BS, DIN,

ASTM, etc (24%)

ISO, IEC (61%)

as of

Dec 2007

Statistics 61% identical/modified from ISO, IEC

24% based on JIS, BS, DIN, ASTM, etc

15% purely Korean

Strategy Harmonized

with Int’l Standards

Originated from advanced formal or non-formal standards

These National Standards Have Assisted Korea Economic Growth Institutionally

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4. Korean Standards – KS Certification

KS Certification in 1985 – 2005 (cumulative)

KS Certification of KS (based on ISO, IEC, other advanced standards) Contributed to the Development of World Class Korean Products

Semiconductor, Ship-building, Automobiles, TFT-LCD

Knowledge and Technology transferred to developed countries

Number of Certification

Number of Factories

Number of Standards

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5. Korean Standards - ISO Certification in Korea The double increase of ISO 9001/14001/TS16949 Certifications

have facilitated Korean Export, thus Economic Growth Higher Level of Openness and Advancement of Socio-Economic Infrastructure

31 (Source: ISO Survey 2004 and 2008)

ISO 9001 : 11th(‘04) 10th (‘09)

ISO 14001: 10th (’04) 6th (‘08)

TS 16949 : 6th (‘04) 3rd (’08)

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6. Quality Activities in Korea

Number of Quality Circles

2003~2005 Listed Companies

Companies

with QC Circles

Average Profit Ratio

No

Yes 1,240

289 No

0.0415

-0.0517

Yes

Companies with QC Circles Reported Higher Profit Ratio

KS and ISO Certifications have triggered QC Activities

QC Activities have positive impact on Business Performance in Korea

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IV. Changing Global Biz Environments

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V. Standards and Trade & Innovation

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ISO, IEC, …

JIS, DIN, …

1. Imitator, Imovator, and to Innovator in Standardization

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Law • Legislation

• Regulation

Mark • Certification

• Test/Inspection

Award • Promotion

• Competition

Korean E

conomic G

rowth

Standards have functioned as a mechanism for

knowledge and technology transfer in Korean economic growth. It started from the position of imitator, has evolved to imovator, and will transform to innovator in the upcoming years.

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2. Strengthening ‘Research’ Activities domestically and internationally

Trade/FTAs Public Policy Economic

Impact

Business Strategy

Corporate Intelligence

Open Source Model

R&D-IPR-Standards

Technology Innovation

Service Innovation

Case Studies HRD

Education … …

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3. Standards and Trade “New rules will determine who flourishes, and who falls

behind. At the heart of those new rules are standards.

Honourable John Manley, Canadian Minister of Industry (March

2000)

“From a macroeconomic perspective, it is significant that

standards make a greater contribution to economic growth

than patents or licenses…. Innovation potential alone is not

sufficient to maintain competitiveness. An efficient

dissemination of innovation via standards is a precondition

for economic growth.”

“Economic Benefits of Standardization Summary of Results”

Published by DIN German Institute for Standardization (2000)

**Korea’s trade statistics

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**Peru’s trade statistics

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**Brazil’s trade statistics

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"Approximately 80 percent of international trade is affected by standards

and the health, safety and environmental regulations that incorporate the

m. The Department of Commerce is pledged to ensuring level playing field

s for US manufacturers and exporters by urging our trading partners to a

dopt market-driven performance standards, and to seek assurance of confo

rmity to agreed-upon standards so that we can achieve the goal of "one te

st, one time, accepted everywhere.“

Dr. Arden Bement, Director, National Institute of Standards and Technology (20

02)

“At the international level, standards are becoming a pillar of the new glo

bal trade system. As barriers to trade and investment are eliminated and

information technologies continue to evolve, standardization is taking on

an increasingly important role in global affairs.”

“Canadian Standards Strategy and Implementation Proposals” (March

2000)

4. Standards, Innovation and Competitiveness

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Standardization

Testing /Inspection

Certification

Accreditation

Legal Metrology Calibration

Measurement

**SCaM is tech-quality infra

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5.1 Task – Three sectors (not separately)

CA M S

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5.2 Task – Governance: who/what Government led?

Industry led?

Partnership?

Model country?

USA?

Germany?

Japan?

Government

Industry

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5.3 Task – Standards harmonization and development

Gold-powder/Zinc/Copper, Oil/Gas/Petroleum,

Coffee/Meat, Machinery

Harmonization with ISO, IEC

Harmonization with Exporting countries

EU, USA, China, Switzerland, Canada

Harmonization with Importing countries

EU, USA, China, Brazil, Ecuador

Developing Pure Peruvian: pros and cons?

What if they are slightly different?

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5.4 Task – Seven Pillars

Source: NSCAF (KSA 2012)

Infra- structure

Process

Human Resources

Metrology

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6 4 5

Stakeholders Strategies and

Implementation Plans

2 3

Laws, Systems and Institutions

1

Performance

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5.4.5 Task – HRD/HRM

Concept

• Cultivation of human resources(education, qualification, eligibility criteria)

• Management system for human resources

• Capability of human resources(size, level)

1) Standardization

• Experts on standards planning(Strategy, needs)

• Experts on standards development

• (development & preparation)

• Experts capable of international standardization activities

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2) Conformity Assessment

• Policy experts for conformity assessment

• Certification auditor

• Experts for testing, calibration, inspection

• People in charge of quality control

3) Metrology (science, industry, legal)

• Experts on measurement standards development

• Experts on reference materials development

• Experts on reference standards development

• Experts on international measurement standards development and activities

5.3.5 Task HRD/HRM (2)

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CONCLUSION - Cooperation to move forward together

1) Strategy for Expanded Role/Domain of Standardization

2) Efforts in Human Resources Development for Standardization

3) Serving and Contributing More to Int’l Standards Activities

4) Strengthening ‘Research’ Activities‘ at nationally and internationally

5) Cooperating with our neighbors

Thank you for your attention!

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