{"id":2202418,"date":"2023-10-04T19:10:55","date_gmt":"2023-10-04T10:10:55","guid":{"rendered":"https:\/\/koreapro.org\/?p=2202418"},"modified":"2023-11-20T16:52:24","modified_gmt":"2023-11-20T07:52:24","slug":"how-south-koreas-all-encompassing-ministies-stifle-innovation","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/10\/how-south-koreas-all-encompassing-ministies-stifle-innovation\/","title":{"rendered":"How South Korea\u2019s all-encompassing ministries stifle innovation"},"content":{"rendered":"

South Korea\u2019s Ministry of Trade, Industry and Energy (MOTIE) just had a busy month.<\/span><\/p>\n

On Sept. 8, the ministry <\/span>recognized<\/span><\/a> the Asan Tangjeong Foreign Investment Zone on Sept. 8 as an \u201cadvanced technology investment zone.\u201d This designation places it among nine special economic zones in South Korea. Notably, within this zone, Hyundai Motors has a manufacturing complex focused on transitioning from internal combustion vehicles to electric ones.<\/span><\/p>\n

Then, the ministry <\/span>launched<\/span><\/a> the second \u201cKorea-US Advanced Industry and Technology Cooperation Forum\u201d on Sept. 21. During this forum, it outlined the objectives of advanced technology cooperation, which includes strengthening the industry supply chain, building strong partnerships, promoting dynamic collaboration, and identifying opportunities for technological collaboration.<\/span><\/p>\n

In both cases, MOTIE focused on what it refers to as \u201cadvanced technology,\u201d but its expansive approach raises the question of what it even means by the term.<\/span><\/p>\n

This, as it turns out, gets at the heart of how not only MOTIE but a number of other South Korean ministries operate: They take what\u2019s known as an omnibus policymaking approach, attempting to tie together a wide range of areas that may not be directly related.<\/span><\/p>\n

This \u201ccontrol tower\u201d approach to economic policymaking has its advantages, in particular by facilitating legislative changes.\u00a0<\/span><\/p>\n

But it also concentrates power in a single institution and can result in confused and inefficient policymaking, highlighting the need for South Korea to rethink how its superministries operate.<\/span><\/p>\n

OMNIBUS POLICYMAKING<\/b><\/p>\n

Omnibus policies aim to achieve multiple unrelated objectives within a single policy or law. While this approach can expedite the legislative process, it often compromises democratic principles like transparency, accountability and participation. Therefore, such legislation can also <\/span>impact<\/span><\/a> the overall quality of the law.<\/span><\/p>\n

This approach serves as the context for the challenge North Korea faces to create a robust legal framework for advanced technology.<\/span><\/p>\n

The <\/span>Industrial Development Act\u2019s<\/span><\/a> Article 5 outlines the criteria for the Operation of Advanced Investment Districts. It emphasizes investments that align with long-term development goals and those that focus on high-intensity and rapid technological innovation.<\/span><\/p>\n

In contrast, the <\/span>Industrial Cluster Development and Factory Establishment Act\u2019s<\/span><\/a> Article 2(8) categorizes advanced technology investment as \u201chigh-tech investment.\u201d This refers to the research and production of advanced technologies and products, as detailed in Article 5 (1) of the Industrial Development Act.<\/span><\/p>\n

Further, Article 2(8-4) describes a \u201chigh-tech investment zone\u201d as areas designated to encourage high-tech investment. Article 22(6) empowers MOTIE to designate these zones, allowing for potential subsidies, tax benefits and incentives for foreign investment.<\/span><\/p>\n

This authority draws from a broad spectrum of legislation, including the Technology Transfer and Commercialization Promotion Act and the Special Act on Balanced National Development. These laws prioritize high-tech investment over other concerns, such as preserving forestry resources and managing traffic congestion.<\/span><\/p>\n

However, the Industrial Sites and Development Act mandates that MOTIE can only oversee advanced technology special economic zones in collaboration with other central government ministries, except when foreign investments are at the forefront.<\/span><\/p>\n

The key takeaway is MOTIE\u2019s significant decision-making authority in this domain, regardless of the specific terminology used, be it advanced technology or high-tech.<\/span><\/p>\n

\"\"

An illustration of a microprocessor | Image: Korea Pro<\/em><\/p><\/div>\n

CONTROL TOWER POLITICS<\/b><\/p>\n

The role of “control tower” ministries, such as MOTIE, is pivotal in shaping Korea’s broad policymaking landscape. These ministries function similarly to \u201csuperministries,\u201d holding authority over a wide range of policy areas and reporting directly to the executive branches of government.<\/span><\/p>\n

Historically, the position of the primary “control tower” for Korea’s innovation policy has been <\/span>highly coveted<\/span><\/a>. This began with the emphasis on “telecommunications” and ICT as emerging industries in the 1980s. However, with each change in the presidential administration, the leadership role in innovation policy often shifted.<\/span><\/p>\n

This led to the <\/span>establishment or renaming<\/span><\/a> of various ministries, including the now-dissolved Ministry of Information and Communication and the Ministry of Science and Technology.<\/span><\/p>\n

Emerging from this competitive landscape in 2013, MOTIE was restructured from the remnants of the former Ministry of Knowledge Economy. While pinpointing a single dominant \u201ccontrol tower\u201d ministry might be challenging, MOTIE\u2019s significant influence in shaping advanced technology policy solidifies its prominent position.<\/span><\/p>\n

TIME FOR CHANGE<\/b><\/p>\n

It\u2019s worth questioning if it\u2019s time to reconsider the omnibus strategies in investment law and policy. These strategies, while seemingly efficient, often lead to hasty and unrefined policymaking.<\/span><\/p>\n

Such omnibus investment policies, though convenient, can have unforeseen repercussions, potentially undermining the regulatory environment for international investments.<\/span><\/p>\n

Direct ties to executive powers, while powerful, are susceptible to the unpredictability of political scandals, shifting international relations and changing campaign promises. A stable and long-term innovation policy is crucial, especially concerning foreign investments. However, achieving this becomes challenging when \u201csuperministries\u201d influenced by politics lead the charge.<\/span><\/p>\n

Moreover, omnibus policies that introduce foreign investment incentives without aligning with Korea\u2019s broader economic and public interest goals can create inflexible governance structures. This misalignment can hinder efficient economic and development policymaking. The broad definition of \u201cadvanced technology,\u201d encompassing areas like semiconductors and energy storage systems, when combined with other policy objectives, can lead to inefficient resource allocation.<\/span><\/p>\n

As Korea refines its investment laws and policies, it will become imperative to simplify these intricate structures into more lasting frameworks, like international investment agreements. This approach would promote high-quality foreign investment but also minimize the risk of potential investment disputes.<\/span><\/p>\n

Edited by John Lee<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

South Korea\u2019s Ministry of Trade, Industry and Energy (MOTIE) just had a busy month. On Sept. 8, the ministry recognized the Asan Tangjeong Foreign Investment Zone on Sept. 8 as an \u201cadvanced technology investment zone.\u201d This designation places it among nine special economic zones in South Korea. Notably, within this zone, Hyundai Motors has a […]<\/p>\n","protected":false},"author":10407,"featured_media":2202419,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,27],"class_list":["post-2202418","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-domestic-politics"],"yoast_head":"\nHow South Korea\u2019s all-encompassing ministries stifle innovation - Korea Pro<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2023\/10\/how-south-koreas-all-encompassing-ministies-stifle-innovation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How South Korea\u2019s all-encompassing ministries stifle innovation - Korea Pro\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s Ministry of Trade, Industry and Energy (MOTIE) just had a busy month. 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