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2012 Knowledge Sharing Program with Turkey


Title: Knowledge Sharing Program Interim Reporting and Policy Practitioners Workshop October 8, 2009 Seoul, KDI Author: Last modified by – PowerPoint PPT presentation

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Title: 2012 Knowledge Sharing Program with Turkey

Strategic Policies for Productivity
  • 2012 Knowledge Sharing Program with Turkey
  • Youngsoo Kim, Jin Woong Kim
  • Korea Institute for Industrial Economics Trade
  • 2013. 3. 27

Table of Contents
  • Importance of Productivity
  • and Policy Areas
  • Productivity Status Major Issues In Turkey
  • Productivity Improvement Policy Cases in Korea
  • Implications for Turkeys
  • Productivity Strategy

I. Importance of Productivity and Policy Areas
  • The Importance of Productivity
  • General Definition
  • A ratio of output to the production factor input
  • Implications
  • Implies efficiency of a given inputs can produce
    goods and services
  • It is usually a proxy variable that represents
    technological advances.
  • It indicates the dynamism of the economy and
    future growth potential.
  • Why is productivity important?
  • Given the amount of resources, improving the
    productivity is the sole alternative for
    sustainable growth
  • Purpose of productivity measurement and study
  • Understanding the extent of technology change and
    the efficiency of economy and industries
  • Reduction in actual cost

I. Importance of Productivity and Policy Areas
  • Factors That Affect Productivity
  • Almost all factors such as those that influence
    labor capital quality improvement, technology
    innovation, macro-economic stability business
    environment, and labor relation of individual
  • Drivers of Productivity (England DTI, 2003)
  • Investment Macro-economic situation and tax
  • Skill and human capital Levels of skill embodied
    in an individual and level of industrial
    technical workforce
  • Innovation and technology
  • Competition Competitive environment in the
    capital market, labor market, and product market
  • Enterprise Vitalization of business incubation,
    customized support for small businesses,
    productivity improvement for company-level

I. Importance of Productivity and Policy Areas
  • Major Areas of Productivity Improvement Policy
  • Setting up the policy area for productivity
    improvement centering around the factors that
    directly affect the productivity of the industry
    and enterprises

II. Productivity Status Major Issues in Turkey
  • Structural reforms made way to a stable economic
    growth, and despite the crisis, Turkey has became
    one of the fastest growing countries in the
  • Productivity growth rates are also relatively
    high, but Turkey lacks behind in terms of
    productivity levels and contribution of
    productivity to economic growth.

II. Productivity Status Major Issues in Turkey
  • DGP has been preparing the Productivity Strategy
    and Action Plan (2014-2017) document for
    industry. Some of the frequently stated problems
    during the workshops and interviews held with the
    stakeholders so far
  • Lack of long term education planning, inadequate
    performance -quality and quantity- of the
    education system, lack of workforce planning,
    skill mismatch...
  • Lack of risk-taking and innovative behaviour of
    enterprises, orientation of investments to
    unproductive sectors (Real estate, financial
  • Disorganized incentive system, complicated
    incentive procedures, inadequate monitoring and
  • Ineffective protection of IPRs, weak university-
    industry collaboration
  • Low levels of health, safety and environment
    awareness among enterprises Assymetry between
    awareness levels and regulations put into force.
  • Low level of productivity, RD and innovation
    awareness among enterprises, concentration on
    inceremental product improvement activities
    rather than research and development.

II. Productivity Status Major Issues in Turkey
  • Major Mission of DGP
  • To do research, prepare policies and strategies
    for productivity, monitor the implementation and
    to evaluate the results
  • To provide technical assistance for enterprises
    to improve productivity, perform training and
    consultancy activities and promote productivity
  • To perform studies for productivity measurement,
    assessment and monitoring
  • To develop and implement productivity and cleaner
    production programs and projects at country,
    region, sector and enterprise levels, to promote
    and support the activities in this field

II. Productivity Status Major Issues in Turkey
  • Direction for Establishing the Productivity
    Strategy in Turkey
  • Results of the current situation analysis of the
    strategy document shows that there is a
    significant potential of productivity improvement
    for Turkey. Main improvement areas are also in
    the process of identification.
  • Actions to improve efficiency levels of
    enterprises are beneficial but only have short to
    medium term effects on productivity.
  • As stated, almost all aspects of factors affect
    the productivity and this requires harmonization
    between different policies, especially science,
    education and training, industry and technology
  • For the long term productivity improvement, state
    needs to take an active role, but not only in
    harmonizing those policies. Conducting skills and
    needs analysis, forecast studies, determining
    vision, planning and targeting, coordinating and
    effectively supporting the enterprises during the
    process would be among the functions of the
  • Improving national innovation capabilities in
    selected target sectors where there is
    significant experience and capability, improving
    design capabilities in so-called low productivity
    sectors, attracting FDIs while ensuring knowledge
    spillovers to local enterprises in high-tech
    sectors would be the direction of the
    productivity strategy.
  • Education and training seems to be playing the
    key role in this scenario.

III. Productivity Policy Practices in Korea 1
Industry Technology Development Policy
  • First Round of the 5-year Productivity
    Technology Development Plan (1991)
  • Purpose Improving advancing vulnerable on-site
    production technology
  • Strategy
  • Demand-driven approach method based on the needs
    of industries
  • Selecting 26 core technology sectors
  • Placing equal emphasis on vulnerable technology,
    core element technology cutting-edge production
  • Emphasis on commercializing the RD results
  • Practical measures
  • Setting up project group for developing
    production technology by 26 core technology
  • Establishing designated research group for
    production technology encompassing corporations,
    government-funded RD centers, and universities
  • Korea Institute of Industrial Technology(KITECH)
    acting as a proceeding organization

III. Productivity Policy Practices in Korea 1
Industry Technology Development Policy
  • Second Round of the 5-year Productivity
    Technology Development Plan (1996)
  • Purpose
  • Efficient combination of learning utilizing the
    new technology
  • Establishing nations technology innovation
  • Strategy
  • Designation of 43 technology areas in 6 major
    sectors Platform technology, industrial
    machinery, general machinery, electric/electronic,
    chemical, living/textile
  • Understanding technology gap compared to those in
    advanced nations by 43 technology areas and
    setting the goal for technical level
  • Practical measures
  • Procurement of funds by government and private
    entity with matching-fund method for detailed
    businesses for acquiring utilizing the new
  • Capital required for foundation technology fully
    supported by the government

III. Productivity Policy Practices in Korea 1
Industry Technology Development Policy
  • Third Round of the 5-year Productivity
    Technology Development Plan (1999)
  • Purpose
  • Restoration of the potential of technology
    development after the financial crisis
  • Raising the overall technology level of the
    industries up to 70-80 by 2004 in contrast to
    developed countries
  • Strategy
  • Designating 5 major industries 15 major
    technological areas that have huge ripple effects
    in industry-correlations as the core technology
    sectors to foster
  • Focusing on improving the future-oriented
    efficiency based on the performance analysis of
    existing projects
  • Practical measures
  • Investment distribution between industrial
    sectors Electrical/electronic communication
    industry(33), chemical/bio industry(25),
    material industry(17), high-tech machine
    industry(19), energy/environment industry (6)
  • Carrying out the development of technology
    infrastructure in connection to strategic
    technology development

III. Productivity Policy Practices in Korea 1
Industry Technology Development Policy
  • 5 Major Industries 15 Technologies of the
    Third Round of the 5-year Productivity Technology
    Development Plan (1999)

Industrial Sector Major Technology
Electronic/communication Communication/network, electronic parts/semi-conductor, computer system, S/W game, electrical/electronic devices
Chemical/bio Macromolecule, precision chemistry, bio tech, fabric/ living products
Material Metallic/ceramic
Energy/environment Energy environment
High-tech machine Industrial/transportation, aerospace
III. Productivity Policy Practices in Korea 1
Industry Technology Development Policy
  • Fourth Round of the 5-year Productivity
    Technology Development Plan (20042008)
  • Purpose
  • Constructing the innovation-led advanced
    industrial nation through the establishment of
    the national innovation system
  • Improving technology up to 85(2008) from
    72(2003) compared to that of developed nations
  • Strategy
  • With the government acting as a catalyst,
    establishing a developed nations tech
    innovation system led by the private sector
  • Forming future-oriented industrial structure with
    a flexible and strong health condition adaptive
    to the ever-changing economic environment
  • Developing balanced regional economy thru
    establishing self-sustainable technology
    innovation system
  • Strengthening performance analysis feedback to
    overall tech innovation business

III. Productivity Policy Practices in Korea 2
Policy for Improving Skill Training Industrial
Work force
  • Supporting the Employment of Industrial Technical
  • Subsidizing the labor cost when a small medium
    enterprise hires an unemployed with Masters
    degree Ph D. (2004). Expanding the candidates
    to conglomerates and retired technical workforce
    in 2008.
  • Tax reduction or return cost in RD expense,
    workforce development, facility establishment
  • Supporting the Training of the Industrial
    Technical Workforce
  • Job performance development project by the
    Ministry of Employment Labor Subsidizing
    employers when executing/outsourcing
    education(training) of workforce skill
  • Strengthening the innovative performance of the
    industrial technical workforce through
    re-education of on-site technical workforce
  • Recent trend of expanding the support of
    technical workforce by connecting it with the
    fostering of the regional industry

III. Productivity Policy Practices in Korea 2
Policy for Improving Skill Training Industrial
Work force
  • Supporting Industrial Technical Workforce through
    Dispatching Researcher
  • Bridging the tech gap promoting the development
    of new technologies by dispatching researchers
    belonging to research institute funded by the
  • Supporting Industrial Technical Workforce through
    Exemption of Military Duty
  • There is a substitute system for mandatory
    military duty for those researchers who engage in
    technological/scientific development in the
    corporate RD center(since 1981)
  • A significant measure for enterprises to secure
    excellent research workforce
  • The candidate business for the special case of
    military service system should have a corporate
    RD center with over 30 dedicated researchers
    with B.S. degree, 5 of whom should have a
    Masters degree (3 for small medium enterprises)

III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • History of KPC (Korea Productivity Center)
  • 1957 Established as a non-profit organization
  • 1987 Designed as a Vocational Training Center
  • 1989 Launched 5-year plan to double national
  • 1994 Designed as a Quality Guarantee System
  • Organization
  • 1996 Designed as an Environment Management
    Consultant Training
  • Agency
  • 1999 Began to offer Six Sigma Management
  • 2000 Began to offer Knowledge Management
  • 2003 Developed NBCI (National Brand
    Competitiveness Index)
  • 2005 Expanded the Korea Productivity Center
    Training Institute

III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • Main Roles of KPC
  • Improving National Productivity and

Public Business
Improve National Productivity and Competitiveness
III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • Major Project 1 Productivity Management System
  • Goal and Characteristics of PMS
  • Assisting Korean companies (especially SMEs) for
    establishing advanced productivity management
  • Providing one-stop service (evaluation ?
    consulting education)
  • 60 of total cost is supported by governments
  • Key points of PMS (Evaluation, Grading,
  • Incentive (Financial benefit, award, Special

III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • PMS procedures 4 step
  • STEP 1 Field evaluation for certification
  • Evaluating the level of current management system
  • STEP 2 Presenting problems and solutions
  • Suggesting tasks to achieve productivity target
  • STEP 3 Consulting education
  • Providing field consulting and customized
    education program to assist productivity
    promotion activities
  • STEP 4 Post field evaluation for certification
  • Providing continuous PMS service each year

III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • Major Project 2 Korea Production System(KPS)
  • The KPS is a methodology for manufacturing
    Innovation that is developed to establish
    production systems suitable to global and Korean
    Industrial culture and bring innovation to
  • Improve easiness to apply for SMEs by integrating
    domestic and foreign manufacturing Innovation
    methodologies and reflecting the characteristics
    of manufacturing in Korea.
  • Present solutions for problems in production
    sites and support establishing production systems
    that are suitable to each companys circumstances.

Localization of global standards Integrated
global manufacturing innovation methodologies
- LEAN, TPS, 6-sigma, TOC, ERP Design
manufacturing systems meeting global
Systemization globalization of Korean
characteristics Reflect Korean companies
characteristics and culture Reflect their
know-how and successful cases in manufacturing
KOREA Production System
III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • Overall Structure of KPS
  • The KPS consists of 3 elements
  • Standard Manufacturing Model A standard model on
    the structure of manufacturing operation systems
    and how they work
  • Assessment scheme A system to diagnose the level
    of manufacturing competitiveness based on the
    Standard Mfg. Model
  • Implementation Tools Promotion roadmaps by level
    and characteristic, implementation manuals for
    core activities

1. Standard Mfg. Model
3. Implementation Tools
Goals and performance indicators(KPIs)
Principles Core activities

Promotion roadmap by level Promotion roadmap
by industry Implementation manual by core
III. Productivity Policy Practices in Korea 3
Productivity Improvement Business at Corporate
  • Major Project 3 Productivity Research Institute
  • Mission
  • To increase the National Competitiveness by
    encouraging enterprise to improve its
    productivity using statistical analysis and
  • Major Activity
  • Labor Productivity Index
  • Total Factor Productivity Index
  • International Labor Productivity Comparison
  • Analysis of Listed Companys Value-added
  • Productivity Thesis Contest
  • Dissemination of Productivity Techniques Tools

IV. Implications for Productivity Strategy in
  • Clearly Setting the Target for Improving
  • Because productivity is a very broad concept, the
    related policy area is also very wide.
  • This study suggests 3 factors centering around
    causes directly affecting productivity
  • Industrial technology development policy
  • Improving the skill fostering industrial
    technology workforce
  • Advancing the productivity thru production system
    establishment at a corporate-level
  • Raising the industrial tech development
    workforce is related to the productivity
    improvement strategy at an industry level and its
    productivity improvement strategy should work as
    a bridge to co-relate to other policies at a
    nations level

IV. Implications for Productivity Strategy in
  • Specifying Productivity Improvement Goal by
    selecting the Target Industry and Target
  • Korea has proceeded to develop by designating the
    target industry, and developing technology by
    each phase of the plan since 1991.
  • Although there was criticism over selecting the
    target industry(picking winners) in the
    industrial policy, interest in sectoral approach
    has been increasing again since 2009.
  • What is notable in Korean case is that the
    functional approach is implemented in a balance
    with the sectoral approach.
  • The strategy of concentrating on the industrial
    technology areas that contribute to industrial
    productivity improvement and have large
    spill-over effect to other industrial
    technologies would be essential in consideration
    of limited governmental resources on technology

IV. Implications for Productivity Strategy in
Main sector Target tech
1st round of 5 -year productivity tech development plan (1991-1996) 26 core tech (weak, core factor, cutting-edge technology) Foundation-tech, precision processing, engineering machinery, machine parts, electric/electronic parts, machine parts, electronic/electric parts, apparel machinery, hot-air engine, material equipment, air-conditioning/heating, thermo/humidity, purification, high molecule, rubber, chemical engineering, transportation machine, CAD/CAM , automation, environment devices, measurement devices, semi-conductor equipment, light application, communication devices, medical devices, aircraft, high-pressure, new material applied tech
2nd round of 5 -year plan 6 major sectors, 43 tech areas Foundation-tech, industrial machinery, machinery, electric/electronic, chemical/bio, apparel
IV. Implications for Productivity Strategy in
Main sector Target tech
3rd round of 5 -year plan (2000-2004) 5 major industry 15 tech areas - Electronic/info-communication industry Communication/network, electronic parts/semi-conductor, computer sys, S/W /game, electric/electronic devices - chemistry/biology High molecule, precision chemistry, bio tech, apparel/living - Material metal/ceramic - Energy/environment industry Energy/environment - Cutting-edge Industrial machinery, transportation, aerospace
5-year industry tech innovation (20042008) 15 major industry strategy tech, 5 major energy tech - 15 major strategy tech Semi-conductor, display, automobile, shipbuilding, apparel, production sys, metal, chemical processing material, digital convergence, robot, bio, medical device, production-base, nano-base, purification-base, knowledge service - 5 major energy tech Energy efficiency, green house has reduction, new recycled energy, resource development, electricity, nuclear energy
IV. Implications for Productivity Strategy in
  • Making an Industrial Technology Roadmap for a
    target technology to present the detailed goal
    and schedule of technology development
  • Korea has promoted the Industrial Technology
    Roadmap since 2000.
  • The industrial technology and energy
    roadmap(2008) was generated by 314 professionals
    from the industries, academia and research
    institutes to deduce 5,936 key technologies in 20
    industrial areas.
  • Technology roadmap consists of ? Mega Trend, ?
    key technology system, ? parameter for each
    key-tech, ? tech development support status,
    ? tech development target level, ? roles of
    tech development projects
  • Such industrial technology roadmap greatly helps
    increasing the effectiveness of technology
    development projects by clearly presenting the
    technology development goal for each period and
    organically linking the related technology
    development support programs.

IV. Implications for Productivity Strategy in
IV. Implications for Productivity Strategy in
  • Expanding the share of development research in
    the public RD investment
  • The share of development research(industrial
    tech) in the public RD investment is relatively
    high in Korea.
  • Increasing the public RD investment in the field
    of industrial technology is important.

IV. Implications for Productivity Strategy in
  • Promoting along with productivity improvement
    movement at a corporate level
  • Establishing improvement promotion plan by the
    phase of economy industry
  • Raising the awareness on the importance of
    productivity among entrepreneurs and laborers
  • Constant-promoting the improving work in
    production system to reduce production cost and
    raise the productivity onsite
  • Promoting integration between productivity
    strategy at a industry level productivity
    improvement projects at a corporate level

IV. Implications for Productivity Strategy in
  • As for the promoting organization to improve
    productivity, partnership between government
    private sectors is desirable
  • The public leads to the industry level
    policy(technology development policy and
    workforce policy), and the private sector propels
    productivity improvement projects at a
  • Fund-raising both by private and the government
  • The subject of the productivity improvement is
    human beings
  • Promoting human-based productivity movement
  • Recent productivity movements are transforming
    from the product supplier's production site
    centered movement to the consumer centered
    movement to satisfy the customers.
  • Trend of emphasis on sustainable management and
    green productivity focusing on the environment in
    the productivity movement

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