Geoff's blog

My week in Korea and China

Geoff Mulgan - 26.09.2012

I spent a few days in Korea and China last week, both countries with a distinct spring in their step compared to north America and Europe.

The main focus for the trip was the two day annual OECD conference on science and technology - the Global Forum on the Knowledge Economy. This is where the OECD launch their fascinating science and tech country reports, in-depth and richly analytical assessments of the state of innovation policy across the world.  Their data on knowledge-based capital confirms the growing importance of intangibles, and that in the UK intangible investment is larger than tangible investment.  This makes it all the more remarkable that it remains almost wholly absent from economic commentary - despite Nesta's best efforts. 

There was also plenty of discussion of industrial policy and renewed activism by governments around the world, and interesting shifts in opinion amongst the experts, including a good deal more scepticism about R&D tax credits (which are increasingly seen to favour particular sectors, rather than innovation, and which appear to be being used for tax manipulation by larger multinationals).

Korea continues to impress as it grows through the economic slowdown. Alongside China it is the only major economy sustaining business investment in R&D; and demonstrates a rare industrial policy confidence, despite Samsung's court defeat by Apple (which most of the science and tech experts saw as a pretty bad decision that calls IP law into question). 

The big concern in Korea is the excessive power of big business chaebols relative to SMEs; and economic inequality.  My talk at the OECD was on jobs. Here is a summary of what I said, focusing both on where future jobs will come from and on the case for innovation in jobs.

I also took part in the Korea Capital Markets Institute conference in Seoul, exploring the future of capitalism and new types of capital markets, including interesting speeches by Harvard's George Serafeim, Jed Emerson (the pioneer of blended value), and Jitinder Kohli, formerly a co-author of mine when at the Center for American Progress and now at Deloitte.   

Serafeim showed that greater attention to environmental, social and government reporting correlates with superior corporate performance. He also presented a remarkable slide showing that the world's top 1000 firms' share of OECD GDP has risen from 30-70 per cent since 1970.

Within Seoul itself, expanding welfare and social strength is set to be the top priority for the next few years - with the recently elected Mayor Won Soon Park (who I spent some time with) pioneering a new welfare minimum and large scale implementation of collaborative consumption models under the slogan 'Sharing City'. 

Next year's SIX (social innovation exchange) annual event will take place in Seoul and will showcase how this new sharing economy is evolving worldwide.  I also spent time in Seoul doing seminars and masterclasses with the Hope Institute and Haja Centre, two leading NGOs; and with the Hope team researching social innovation across Asia, mapping the very different emerging models in countries such as India, China, Korea, Thailand and Japan.  I gave a lecture at the Seoul Institute, which is the city's thinktank, floating some ideas about how cities can create more effective systems for 'collective intelligence'. Here is a summary of some of the ideas.

For the second half of the week I went to Beijing - primarily for a conference on social innovation organised by the British Embassy with the China Center for Comparative Politics and Economics (CCCPE)at Qinghua University.  It was exactly 6 years since a big joint event hosted by CCCPE with the Young Foundation which aimed to introduce the idea of social innovation to China, and to senior UK policy-makers who were invited along.  

A great deal of progress has been made since in China and worldwide with a proliferation of new ventures, funds and policy initiatives.  Back then few in Europe, north America or Asia knew the term and there was little interest from big corporates and consultancies. Now organisations from McKinsey to Deloitte, Dell to Unilever have swung round and even set up social innovation teams; and it's part of the policy debate in Europe, the US and China, even though there is a long way to go.   CCCPE is running a particularly interesting social innovation prize in China - whose first winner was a venture employing 3000 disabled people in programming based in Shenzen.  There's a seriousness about experimentation, including around social media, and almost certainly an advantage in terms of scaling up.

The seminar at Qinghua looked at how social innovation is evolving, looking at changing legal frameworks, and at the role of the Internet.  These are my presentations:

Social innovation

Role of the Internet

Other sessions while I was there included one with the China Academy of Governance - which leads on training civil servants across the country - exploring some potentially exciting collaborations with Nesta. There were discussions with the UK ambassador and his team on a new project on science and technology which we hope Nesta will help run over the next year; and of possible links to Qinghua University.  A dinner with thinkers and commentators focused in particular on the remarkable state of Weibo, the vast microblogging site that has changed the dynamics of public opinion, albeit with a mix of strong controls and subtle steers. Also discussed was China's row with Japan, symbolised by a Japanese restaurant next door covered with banners expressing support for Chinese ownership of the disputed Diaoyu islands.