Analyzing the Dynamic Efficiency and Critical Factors of the Regional Innovation System: A Case Study of Korea

Abstract

The purpose of this study is to evaluate whether the dynamic efficiency of Regional Innovation Systems (RISs) across 16 provinces in Korea decline, and to analyze which determinant factors reduce this efficiency. Thus, the goal is to derive policy implications from these research findings in order to enhance the efficiency of 16 RISs. The former method used Window Data Envelopment Analysis with a unique focus on both quantitative and qualitative output measures, including the fee per technology transfer. The findings revealed a gradual decline in RIS efficiency over the study period, with Seoul, Gyeonggi, and Incheon consistently outperforming other regions. The latter method used a panel analysis with a focus on the role of the R&D investment of local government and regional R&D personnel, and technology commercialization ecosystems. The study reveals that while national R&D investment relative to regional GDP positively impacts efficiency, local government R&D funding—especially when aligned with central policies—tends to reduce efficiency. Also, the proportion of R&D personnel to total employment showed a negative effect on RIS efficiency, and regions with well-developed technology commercialization infrastructures display higher RIS efficiency. Our findings suggest the establishment of Government Efficiency Committee to enhance RIS efficiency, such as reducing the R&D investment of local government, restructuring regional R&D personnel to prevent overlap, and strengthening the technology commercialization infrastructure. These recommendations aim to support region-led innovation growth and foster a national innovation landscape.