Efficiency of Innovation Policy with Different Types of R&D Planning: Evidence from South Korea’s Information and Communication Technology Sector

• Published in: Journal of the knowledge economy Vol. 16; no. 1; pp. 630 - 662
• Main Authors: Lee, Jeongwon, Shin, Kiyoon, Kim, Hongbum, Hwang, Junseok
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.03.2025; Springer Nature B.V
• Subjects: Artificial intelligence; Data envelopment analysis; Digital economy; Digital technology; Digital transformation; Economic impact; Economic Policy; Economics; Economics and Finance; Efficiency; Electronic commerce; Entrepreneurship; Financial management; Information technology; Knowledge economy; R & D/Technology Policy; R&D; Research & development; Sustainable development; Uncertainty; South Korea; R&D planning; ICT sector; Top-down; Bottom-up; R&D efficiency; Data envelopment analysis
• ISSN: 1868-7873; 1868-7865; 1868-7873
• DOI: 10.1007/s13132-024-01947-4

Two major approaches in national research and development (R&D) planning, top-down and bottom-up, have been compared in academic research, and their differences and respective advantages have been ascertained. However, studies on which planning method is best for improving R&D efficiency are insufficient. South Korea, a country that spends a high portion of its budget on R&D, has changed the direction of its R&D planning from top-down to bottom-up to improve R&D efficiency. However, few studies have analyzed the impact of this change on R&D efficiency in an empirical way. This study analyzed the efficiency of the R&D planning method, which has yet to be evaluated ex post facto, using a two-stage data envelopment analysis with a focus on the South Korea’s information and communication technology sector. The results showed that government-led planning projects in the research stage, which requires systematic planning due to high uncertainty, can be more efficient than in the development stage, where uncertainty is low. This implies that systematic planning support for research subjects is required to effectively promote the bottom-up R&D method, while the prerequisites of the bottom-up approach must be ensured for it to have its advantages over the top-down approach.