Records of Honda Foundation Eco-technology
Workshop 2005 in Ho Chi Minh City
Part I. Morning Session
1.1 Opening Remarks of Toshio Ban
Good morning, everyone. Thank you very much for joining us today.
Welcome to the Honda Foundation Eco-Technology Workshop 2005 in Ho
Chi Minh City.
As you may already know, the Honda Foundation has advocated the conceptof eco-technology since its inception. Eco-technology reflects our belief that
we need to step away from technologies devoted only for efficiency and profit,and change a paradigm of technology so our activities become harmonizedwith the environment.
Last February we hosted a symposium in Hanoi under the theme of “Linking
Innovation and Entrepreneurship for Developing Countries.” It produced a
lot of reactions and responses in various circles in Vietnam. Today’s workshop
is designed as a follow-up for that Hanoi conference.
We have a couple of aims today. One, we invite the same discussants tofurther discuss the important issues raised in the Hanoi discussions. Two, weshould define an agenda for the next meeting scheduled for fall or winter in2006. Though not decided yet, the venue could be an Indian or Thai city, oronce again in a Vietnamese city.
Also we have invited new discussants from Thailand and India to widen andconsolidate our research network.
Today’s workshop will complete in two sessions: the morning session is a very
informal forum of free discussions; and the afternoon session is a bit formal

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with representatives from the administration, academy, and industry of Ho
Chi Minh City. We anticipate discussions get more specific, perhaps more
focused on Vietnamese- or Ho Chi Minh-specific issues.
We basically encourage you to use English, but you can speak in Vietnameseor Japanese if convenient. We have excellent interpreters today.
OK, my time is up. Two facilitators, Dr. Ca and Dr. Sunami, will take incharge of following discussions. Thank you very much for your kind attention.

1.2 Self Introductions of DiscussantsDr. Atsushi Sunami:
Thanks. As Mr. Ban has said, this morning workshop is very informal. So wehave decided not to do any specific structure as to the way of conducting theworkshop.
In fact I think it’s a good idea for us to get together and spend a couple ofhours to really discuss not just about the last conference we had in Hanoi, but
beyond that to see whether we can have a common theme — not only basedon the activities of the Honda Foundation in this region, but also on an idea ofan entrepreneurship and innovation in honor of the spirit of Mr. Honda, thefounder of the Honda corporation.
There is a multitude of experience in Vietnam, India, Thai; and perhaps we
can also include Korea and China as well. But to build a sort of common
ground for us, the other important thing is, as Mr. Ban said, that we areplanning a conference again for next year and we expect all of us to get
together again somewhere in this part of the world with the outcomes of thisconference.

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I think you have this copy from the last Hanoi’s conference. This is a very
informal compilation of various papers, but what we expect probably for the
next conference is to really come up with this kind of common-theme-based
papers that we can even publish and to spread to the world as our message.
In order to do so, I think it’s essential for us to get together and first to sharewhat we are thinking and what are the common questions. Of course, theHonda Foundation has been doing this, with a main theme called ecotechnology. However, my understanding is that they have based this theme in
the more advanced, European, US, or Japan sort of context. What do wereally mean by eco-technology in our Asian context? We actually haven’t hada chance to talk about it.
Even today I have been affiliated with the Honda Foundation only for lessthan two years, but we have Professor Uchida, a board member of the Honda
Foundation, who knows a lot about the concept of eco-technology and could
share his experience. To put the concept really into the Asian context is thevery important first step for us to launch the Honda Foundation activities inAsia.
So first of all, I think it’s a good idea, since this is an informal workshop, to get
to know each other first. Why not each one of us to do a brief introduction in
no more than five minutes? Just tell us what sort of affiliation you got, what isyour research background, career background and so forth. So introduce
yourself to us.
By the way, I have asked Professor Krishnan to give us a special sort of a 15
minute presentation on India’s innovation system as an introduction since, inthe last conference in Hanoi, we had presentations only from Japan, Thai,
China and, of course, Vietnam. But this time we’ll have for the first time an
Indian experience; so I am looking forward to his introductory remark later.
Then we ask Professor Krishnan to be the last one. I think it’s better to go
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round this way and then come back here. Let me just briefly start with me, I
guess.
I’m Dr. Atsushi Sunami, and I am affiliated with a small, actually the smallest
national university in Japan — the National Graduate Institute for Policy
Studies. My background is really political science and political economy,looking at the science, technology and innovation policy.
My first interest is to understand the influence of other ideas of innovation
system on a reform of the innovation systems of the U.S and U.K., particularly
looking in 1980s, when they were trying to understand the Japanese model ofinnovation systems. Whether they really understood it at all is a big question,
but they have tried to model after Japan to start large reform movements in
the 80s.
Now I am extending this sort of similar questions to the reform of China. I
spend many times working with the Chinese colleagues of mine, looking attheir policy, innovation, reform, and ideas. They are also looking at othercountries’ experiences. In fact they are closely learning the experiences fromthe European, U.S, and Japanese innovation systems, and how they will
design the process of their reform is an interesting question that I am
personally pursuing at this point.
At the last conference in Hanoi, I have talked about the Chinese experiencesince we didn’t have a Chinese colleague to do the presentation. But beyond
that, I am very much interested in looking at the Asian experiences as a wholeand see whether they really fit in to this notion of innovation institutional
reform.
Also I have been asked to work on the Honda Foundation planning forconference about year and a half now — at the time that the Honda
Foundation has decided to take their activities to Asia.

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My experience in Asia is fairly limited. I spent many years actually looking at
the U.S. and U.K., and my first visit to Asia was China in 1987 when I studied
Chinese at Beijing University. After that, I studied at Yonsei University inSeoul in 1988; and then I was absent from the Asian themes for about ten
years. But now I spend more time going back and forth and am looking
forward to working with you, especially in this activity of the Honda
Foundation here. Well, anyway, that’s yet for me.

Dr. Hirohisa Uchida:
Good morning, my name is Hirohisa Uchida. I’m from Tokai University ofJapan. Last time in Hanoi, I gave a lecture about eco-technology. Actually the
Honda Foundation’s philosophy is eco-technology; but today this afternoon, I
am going to touch on once again the definition of the “eco”. “Eco” is not justecology but also “environment conscious,” where “e” from environment and“co” from conscious. I wish we think more in this direction.
I think it’s very important to understand environment or “eco,” because, if wethink environment is not only water and air, but including our family or
schools, working places, markets or countries, our economic and politicalsystems, and everything else — all the factors surrounding us are actually ourenvironment. And if we think about, for example, the development of Asian
countries or any other country, we should also consider the role of “eco.”
Actually my major field is hydrogen energy. From my experience in the fieldof energy and materials, I am working with a small city in Japan and trying toimport a new energy system there. That is what I want to realize now.
While so many people say sustainable society or sustainable development,
what is sustainable development or sustainable economy? I do understand thetheory, but I actually feel and want to realize such a sustainable society fromviewpoint of my major field of hydrogen energy and similar systems, OK?

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And this afternoon, I’m going to touch again on some science and technology
programs, and also the importance of environment, actually, humanenvironment. I hope we can discuss more about that. Thank you very much.

Dr. Kitti Tirasesth:
Good morning, everyone. My name is Kitti Tirasesth, President of King
Mongkut's Institute of Tech, Ladkrabang, Bangkok, Thailand. This is my firsttime to have an opportunity to visit Ho Chi Minh City, and I am very glad tomeet all of you and very honored to be invited here today. And, of course, thisis the first time I have joined the Honda Foundation’s workshops.
May I introduce to you my background education? I myself graduated fromthis institute in the 1975 period and continued my master degree at the
Shonan campus of Tokai University; and then came back to Thailand to workat our institute. In 2001, I caught a doctoral degree also from Tokai University.
During my work at KMTL, I have some experience with the Japaneseindustry in Thailand for more than ten years, especially in the field ofautomobile companies and also in electronic companies.
Please allow me to give a brief introduction to the educational system inThailand and also our university. The educational system in Thailand is 6-3-3,
as is the same in Japan, and then from the high school enrolled students canenter the university. King Mongkut's Institute of Technology Ladkrabang, or
KMTL in short, is a relatively young institute but the nation’s best university
in ICT for two consecutive years in 2004 and 2005, respectively.
Having said that, the rapid uprising of KMTL education and research
excellence would not have been achieved without generous support from theJapanese government, especially JICA. We are extremely grateful for the
support for the past forty years.

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In term of research and innovations, many of our professors have developed
very good relationships with the Japanese counterparts and have worked
together very closely in many projects. Our research center of communicationand information technology is a very good and successful example. With thegenerous help from JICA and Japanese universities, especially the Tokai
University, the center has upraised the quality of our education andcapabilities in ICT and has produced a sustainable research organization.
I think it is now the time for us to move onto the next step. This too
capitalizes on basic research innovations and turns them into commercial
products, and encourages entrepreneurship in our university. In fact, we haverecently founded the university business incubator’s office at the head centerto promote and encourage entrepreneurship in KMTL. We are at the very
beginning of this learning process and I am very delightful to be at this roundtable meeting to share the idea about innovation and entrepreneurship.
As the very last note, I would like to take this opportunity to express mysincere gratitude to Professor Dr. Uchida, Mr. Toshio Ban, and all of theoperators concerned, and to the Honda Foundations for his generous
invitation. And I would like to invite all of you to visit KMTL in the near
future. We are located in the East of Bangkok, next to the new Bangkok
international airport called Suvarnabhumi Airport. This airport will be
opened in the next year. So it will be very convenient for you to visit KMTL.
Indeed, I would like to propose KMTL to be the host for the next Honda
Foundation symposium or workshop next year. Thank you very much.

Dr. Tran Ngoc Ca:
Good morning, everyone. Probably most of you have known me but I think I
have to present my introduction. My name is Tran Ngoc Ca — Tran is family
and Ca is first name. So you can simply call me Ca. Actually I’m a deputy
director of NISTPASS. NISTPASS stands for National Institute (Insurance)
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for Science and Technology Policy and Strategy Studies under the Ministry of
Science Technology. To give you a better idea how I am acting my steps, it’s
like an institute under MEXT in Japan; and to a certain extent, we work like
GRIPS. So we are working on policies or strategies for science and technology
and innovation.
More recently, just about two months ago, I have to take on another job. Thisis like a secretary general to the national council for science and technology
policy under the Prime Minister. So in that capacity, I just went to visit Japanlast week and met most of you there in Japan.
I think we might come to the title later; but because this is quite an interesting
issue, I want to talk about the theme of this meeting here. It’s quite timely
because what I found from many activities, especially from the last visit toJapan, is that the consciousness about environment is so strong everywhere. If
we link innovation and entrepreneurship, which are very two important
keywords for the purpose of environment and for sustainable development, it
would be much timely.
I am mainly doing research in science and technology policy, innovation issues
as well as other macro economics. I did my research mainly overseas in Russia,
then in Sweden and then in Edinburgh, UK. Interestingly, before going backto Vietnam, I worked with a multinational institute called JETS which stands
for Institute for Japanese-European Technology Studies as a fellow. So I wantto mention that the European once learned the Japanese experience: that was
to learn specifically what the Japanese innovation system is all about. It was
kind of a mutual learning process; and I believe that this meeting today isagain a mutual learning process where we can complement each other.
So my most specific background is economics. I’ve worked a lot on innovation,
especially at the firm level. Firm is my very much interest of research. Apart

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from my task that I have to do a lot work on the macro level, and more
personally, I like to do work on firms. OK, thank you.

Dr. Akira Goto:
Good morning, my name is Akira Goto and I am working at the University ofTokyo. My field is economics of innovation. I used to be an economist bytraining and I used to be a serious economist on applied microeconomics. But
when I was with the Yale University many years ago, Yale was a kind of world
center for economics of technology and innovation. There were Joe Peck,
Dick Nelson, Sid Winter, Alvin Klevorick and Richard Rabin, who is now
president of Yale. So I gradually moved into this field of economics ofinnovation.
Currently, I am working on basically three subjects: One is theoretical andempirical research on innovation process. I did innovation survey with Dick
Nelson and Wes Cohen many years ago; and I am still interested inunderstanding the process of innovation in theoretical and otherwise
empirical aspects.
The second research subject I am interested in right now is innovation policy,
particularly the role of university, and the role of public research laboratory in
the national innovation system. I am almost finished with a book on the roleof universities in the Japanese national innovation system. We did a serious
empirical research on this subject and I am writing a book with my colleague
Professor Baba which will be published next spring. I am also very muchinterested in the role of public research institutes in the national innovation
system. We have learned a lot from Taiwanese experience and from German
experience, using government laboratories as a hub of national innovation
system. I am thinking of starting a project on this. Maybe we can find apartner here today.
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The third subject I am interested in is patents and the economics of patents.
Not just economics of patent but I have been building a huge patent databaseusing Japanese patents and I have almost completed building this. It contains
all the Japanese patents ever applied starting from the beginning of thehistory. Next week I think I can make this database public so you can haveaccess to this huge patent database although yesterday I have received anemail from people working for me on this subject and they have found stillsome bugs. So we may have to delay several days. This database is modeled
after the NBER patent database built by Bronwyn Hall; and I think that I canprovide a very significant infrastructure for researchers on this area.
Another subject involved in this patent research is design of the optimal
patent system. I am currently chairman of ITR committee of the Industrial
Structure Council under METI. Currently we are discussing whether we haveto change the current Japanese patent law, particularly in regard to theadoption of what the French call it “SOLEAU Envelope.” They have a very
unique patent system called “SOLEAU Envelope,” in which, instead of
applying for patents, you write your invention and put it in the envelope andjust give it to the patent office: and then you can claim later that you haveinvented this particular technology in particular time on any day. We are
discussing whether we should introduce this kind of system, and that is one of
the major issues for the Japanese patent system right now.
So that is what I am working on right now and I am very much looking
forward to discussing with you today. Thank you very much.

Mr. Tateo Arimoto:Good morning, my name is Arimoto. I am now a research fellow of the
Economic and Social Research Institute, which is attached to the cabinet
office of Japanese government. Before I joined this institute, I had been in
charge of science and technology policies almost nearly thirty years,
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sometimes for nuclear and space development policies and life science
programs, and at other times for general science policies.
Until this summer, I was the director general of the Science and Technology
Policy Bureau under the Ministry of Education and Science, which is MEXT.
So far I have been deeply involved in the preparation of the MEXT five-year
science and technology basic plan, which will be effective next year and later
approved by the cabinet at the end of this year.
In the new basic plan, we focus upon the reform of Japan’s innovation system
as one of the major pillars, because Japan is now facing not only big
challenges from the world mega-competition and decreasing gross population,
but also great changes such as societal transformation from an industrial
society to a knowledge-based society.
This is the first time I attend the Honda workshop, and also the first time I
visit here in the southeastern part of Asia. I am very interested in various
types of innovation systems, dependent upon the stages of economic
development in each country.
Another point is, as I said, I am a senior staff of the Economic and Social
Research Institute which is a research center reporting directly to the cabinet.
This institute accepted engineers for the first time. Being an engineer myself, I
still can’t communicate with the economists at the institute very well. It is very
difficult to talk with people from a different background. So I am actually
feeling we need an integration of knowledge of science and engineering fields
and social and humanity areas, and put it into future S&T and innovation
policies of Japan. That is my background. Thank you so much.

Mr. Kunio Nakajima:
Good morning, my name is Kunio Nakajima. Until six years ago I had worked
for MITI for thirty one years. My chief responsibilities include the design andPart II-11

planning of Japanese industrial technology policies. Meanwhile, I also worked
on technology policies for small and medium enterprises, and engaged myself
in technological corporations for the developing countries.
Although we have named our last decade “lost ten years” due to economic
slump, that decade in my opinion was a confused time for Japan to really
evolve into something new. In fact, despite being the second largest economic
power in the world, the majority of the Japanese systems and institutions
remained almost the same as they were in the period Japan was a developing
country. We must immediately shake up such a national systemic fatigue ,especially in terms of our innovation system in science and technology, as Mr.
Goto and Mr. Arimoto already pointed out.
Now we seek a way to change our system. Nobody discussed it a few years ago,
but today we have some light lid on innovation and reform studies. I havebeen long working to consider what role the national government plays in theinnovation system of Japan, but we don’t have a clear direction yet. In thissense I’m still in the process of studying and learning. Thank you.

Mr. Nguyen Vo Hung:
Good morning, my name is Nguyen Vo Hung. In Vietnam we usually callpeople with first name, so just call me Hung. I am working for the same
institute as Dr. Ca who has already introduced about it. My background isoperational research. I got a BS degree in economic engineering. Since thenI’ve worked mainly in science and technology professional policies. I’ve got amaster degree in economics from Lancashire University in U.K..
During last five or six years, I don’t quite get involved in many different
projects, but my main interest is still in impacts of foreign investments in thedeveloping countries, especially in Vietnam. Also on that part, we havePart II-12

conducted some study on the behavior of foreign investors in emerging
markets — what it is like and its structure.
Besides that, in NISTPASS, we do quite a lot, various respects of technology
or innovation policy. Especially in areas in Vietnam that undergo a transition
to the market economy, we have to use a lot of so-called institutional reform.
We are now looking to developing distribution, market distribution tocommercialize science and technology results coming from the public
institutions and universities. We look at many experiences and practice of in
the U.S. and also a lot about in other countries. We want to follow that partfor Vietnam. Right now we do quite intensively on that. This year into 2006,
we like to find a way to utilize more effectively research results from publicschools and universities.
Besides these policy issues, I’m also very much interested in political study.
One of my fields is to try to apply the game theory in oversea research under
the context of Vietnam. But what I see is the main issues in development,
mostly about transfer of technology, come from social problems, social
instability. When you talk about that, this is the conflicts of benefit between
different groups. With my background, what I was doing in U.K has a great
potential to use the game theory for policy research in this country. I hopenext five years we can come up with some interesting results. Thank you.

Dr. Rishikesha Krishnan:
I am Rishikesha Krishnan. Please call me Rishi for short. I am a professor at
the Indian Institute of Management in Bangalore in India. My subject is
corporate strategy and policy, but my main research interest is the links
between strategy innovations and competitiveness. To study these links, I do
research at the level of firms, like Dr. Ca, as well as at the broader innovation
system level. I am currently writing a book on the evaluation of the IndianPart II-13

innovations system after the economic liberalization which started in 1991,
and I hope to complete this book by the first half of next year.
I have been working in this area for almost fifteen years now since I started
my doctoral research work in the early 90s. Being at the business school, I
have the opportunity to interact with a number of firms. So one of myresearch areas, as I said, is the firm level; but I also believe strongly that policy
level issues are going to be quite important in shaping the future course of the
Indian economy. Therefore, I have increasingly in the last few years got
interested in policy level issues.
To further this agenda, I am currently on the National Committee on
Technology and IPR of the Confederation of Indian Industry which is India’s
largest industry body; and I am also trying to have some more presence inpolicy making. Thank you.

1.3 Dr. Krishnan’s Short Presentation
Just to start, I want to give you what the picture of Indian economy looks likebefore we go into details of the innovation system. What you will see is thatthe economy is making a transition more to being a service economy. Even
though the manufacturing sector never became as prominent as in many of
the industrialized economies, the service sector is now more than half of theeconomy. And as a proportion, this has come at the expense of industry as
well as agriculture.
One of the big issues in India is whether we have moved too early towards theservice economy; and, therefore, we should really be trying to moreaggressively promote the growth of the manufacturing sector. Just to give youa few numbers, as yesterday at dinner time some people were asking me about
the Indian GDP and so on, some of the important numbers here is the GNPPart II-14

per capita in dollars is only 530 dollars. But, if you look at purchasing power,
it is almost 3,000 dollars. Still this is much less than even China, and of course
countries like the U.K. and the U.S.A., but the important thing is that, for thelast ten years or so consistently, we have been having a growth rate of
between six and seven percent. So there has been a rapid growth in theeconomy; and the hope is that this kind of growth rate will continue at least
for the foreseeable future.
Also, as you will notice from this slide, the economy’s export performance has
improved; still the overall export income is considerably less even than that ofChina. Another important figure which you will notice is the FDI. Its level isstill roughly about 1/10 of that of China. There is some dispute about thesenumbers because, in India and China, we are following different systems forcalculating FDI: maybe the level is not actually ten times, but it is still quiteconsiderable.
From the country’s point of view, even though we have made very rapid
strides in science and technology, we have a very strong nuclear energy
program and so on. We also know that there are still very, very big issues inour society.
A major issue is the incidence of poverty. Since we have a population of morethan one billion people, when you have a poverty incidence of 26.1 percent, itmeans you have more than 250 million people who are below the poverty line:that is a very, very big issue of concern.
Also, though the literacy rate has improved over time to about 65 percent, it
still means we have a very large number of people who are not literate. If you
look at the health indicators, there has been an improvement, but again there
is a big gap with many other countries in the world. And if you look at othersocial issues like accessibility of good water and sanitation facilities, once
again you will see that there is a big gap.
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So one of the big issues in India is, although we have a very big S&T
infrastructure as I have mentioned, how much this S&T infrastructure is reallycontributing to solving the big problems of the country. This is one of theconstant demands which people place on the S&T system: they have many
expectations, they want to see very tangible, very obvious results frominvestments in science and technology on many of these kinds of parameters.
But, as you know, in the science and technology institutes’ research programs,
many of their agenda have nothing to do directly with these problems. So that
disconnect always exists, since we are a democratic country where thepoliticians are constantly under pressure to show results to the society. This
brings about certain pressures as far as the allocation of resources to theinnovation system is concerned.
Where I’m trying to move is…, I have a constraint because I have many slides
for my presentation, but the time we have available is quite short. I will
therefore have to go little fast, and I will try just to focus on the major points.
During presentation, I am just trying to answer these questions:
・How the innovation system in India has evolved?
・How has the economic liberalization process started in the early 90s andchanged technological capabilities in India?
・Has the innovation system become more dynamic and strong, or has it
become more weak and dependent?
・What are the future challenges in strengthening the engine for innovation?
・In India there is a lot of discussion about knowledge society; that is, canIndia really become a knowledge society in the immediate future?
The structure of my presentation is largely in four parts: I will first talk a little
bit about innovation system before liberalization to tell you what was it like;Part II-16

and I will tell you a little bit about what were the policy reforms which havebeen attempted; then I will describe to you some features of the innovation
system after the liberalization process; and finally a little bit about what the
future is likely to be.
Pre-Liberalization Era
Before 1991, as many of you would probably know, India largely focused on
import substitution; and self-reliance was considered to be an important goal.
So as long as you could do something in the India, within the boundary ofIndia, that was all that mattered; efficiency as you see was not as important as
here at all. This process was driven largely by the public sector by
government-owned enterprises and research laboratories.
Though the private sector was not stopped, there were many constraints on its
functions. We had a very elaborate industrial licensing system, which made itvery difficult for companies to expand their capacity, introduce new products,
get into merger and acquisitions, and do any kind of industrial activities.
There were a lot of constraints on these activities.
Also there was government dominance on the R&D activities in terms offinance and allocation of R&D work. Though we had good institutions forhigher technology and learning, the benefit of this was not really going into
the industrial sector. So there was good capability, but we did not see theresult of this in the industry sector largely because the industrial sector wasconstrained. There was very little competition, so there was really very little
pressure on the industrial sector to really innovate.
Liberalization Process
The economic policy reform, which was traced back to 1991, actually cameabout because of a crisis. This is not strange to us because we all know thatmany times big policy changes happen only when there is a very serious
situation; otherwise the government often doesn’t need those changes.
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So in 1991, there was a very acute financial crisis, foreign exchange reserves
had come down to an all-time low, the government had to go and take a loan
from the World Bank and IMF. And as part of this whole activity, many of thestructural issues got addressed.
More specifically, I’d like to draw your attention to the second point: thelicensing system was relaxed; imports and exports became much easier; andtechnology flow was also facilitated. One of the important objectives of thereform process was to make the industrial sector more dynamic
technologically.
And now the reform process has moved beyond this, towards what we call“second-stage reforms.” As you know, India is a federal country consisting of
the central government and states. Now that the central government reforms
have been carried through, a lot of the reform activities have to happen at thelevel of the state governments.
Post-Liberalization Era
What happened after 1991? What we find is that after 1991, the government
support for technological innovation did change. Before 1991, there was very
little direct support for R&D in the industrial sector, except in the public
sector; for the private sector R&D, there was very little support.
But after 1991, a number of new schemes were started, for example, to absorb
imported technology, to commercialize local technology, to help technology
entrepreneurs, and to fund commercialization and development. Most ofthese are in the nature of soft loans, loans that carry reduced interest; the only
grant scheme is actually the technology-based entrepreneurship program.
Also a number of new tax benefits were started; for example, income tax andindirect taxes. But in spite of all of these changes, what we see is that thenational expenditure on R&D still remains in the range of 0.7 to 0.8 percent of
the gross national product.
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However, one major change has been in the private sector. Its contribution
has really increased overtime from about 14 percent now to about 22 percent
though the R&D intensity of industry still remains quite low. We don’t havevery current numbers, but the numbers available are actually quite low.
So just to put this in a kind of dynamic form, what you see is…, if you look at
the base of academic research and public research laboratories, on the lefthand side, you will see the government support directly through the budget,running of different central universities, Indian Institute of Technology, spaceresearch, atomic energy and so on; and a little bit of support for center of
excellence in private colleges, and new schemes which have started a few
years ago. This is at the base level. As you come to specific project level of
support, you find it is through the science engineering research council of the
Department of Science and Technology. The government does fund specificresearch project again in academic institutions and public researchlaboratories.
Then as I already mentioned, there is some support for start-ups through the“technopreneur” promotion program, and a more recent scheme to support
technology business incubators in engineering institutions. We then havesome support for scale-up of technologies which is through the Home Grown
technology program, and some support for commercialization through thetechnology development board. There is also a new initiative called the New
Millennium Industry Technology Leadership Initiative, which started a few
years ago to support research between research institutions and companies.
However, the interesting thing is, if you look at the level of funding across thevarious activities, you will find that actually it decreases very sharply as you gofrom left to right. I just give you an order of magnitude: if the support for theacademic research public laboratories is above hundred, then the support for
research projects is above ten; and, if you come to the extreme right, it isPart II-19

above one. I just give you the order of magnitude, not giving you the exact
number. But if you just look at it, it is something like hundred to ten, or one.
As you go closer towards industry, towards commercialization, thegovernment support is actually much less. And many of us in India have beenarguing that we need to start changing the equation: we need to start with amore emphasis on the right-hand side, rather than only focusing on the lefthand side.
OK, I have already talked about this.
Let me just very quickly take you through what happens in the innovation
system after 1991. One thing you find is that the level of productivity in the
Indian economy continues to be low. One study which was done by McKinsey
Global Institute, which is a think tank, found that, if U.S.A. productivity levelis 100, then Indian productivity level in the modern sector of the economy is
only about 15; that is, only about 15% of the best productivity level
achievable.
But the more interesting part is actually what they said is the potential; that is,
you could actually move from 15 to about 40 just by some managerial changes.
If you were to attend to rationalizing labor, you would reorganize yourfactories and their organizational functions and tasks, make investment inbetter technology, and address other factors like the improvement of thequality of your suppliers, the economy of scale, design for manufacturing, thenyour productivity would actually move from 15 to above 43.
What this suggests is that there is a big challenge for management ofcompanies in India to move from this level of 15 actually to a level of 43. And
this is actually something that depends on internal managerial decisions. So
for people like myself or professors, or management, it is our challenge tomove from that 15 to this 43. But this doesn’t have much to do with policy;
this is actually a variable under the control of the management of companies.
Part II-20

However, one interesting development in the post 1991 era has been thatsome companies have dramatically improved their competitiveness. Just to
take one example, Tata Steel is a hundred-year old steel company that started
in the early part of the 20th century. But when our liberalization process
started, Tata Steel’s future was considered to be bleak and it was not very
competitive at that time. However, over ten years from 1991 to 2001, Tata
Steel has actually changed its performance and today is one of the mostefficient manufacturers in the world. In fact you can see that to produce one
ton of steel they used to use about 4.8 tons of

inputs today they only use

about 3.7 tons. Earlier, they produced 79 tons per man-day, today they
produce 189 tons of per man-day.
This is a kind of development which in a way is consistent in terms of what weare talking about today because eco-technology is also about using resources
more efficiently, not wasting resources. We can actually improve theproductivity. That is also a way to conserving your resources and using yourresources in a more responsible manner.
Another important development in the last ten years has been productdevelopment and innovation in certain sectors of the Indian economy. I am
just drawing your attention to three of them: one is the automobile sector, thesecond one is two-wheelers, and the third one is the pharmaceutical sector.
These three sectors have seen a big change in the kind of innovative activity.
So you find today that companies like Tata Motors, which is a part of the Tata
conglomerate that design cars for the Indian mass market. Today thecompany is the number three in the market after Suzuki and Hyundai. TVS
Motor, which is a company that had earlier a joint venture with Suzuki to
produce motorcycles, today develops its own motorcycles and one of theirproducts, “Victor,” has been one of the most successful products in the Indian
two-wheeler market.
Part II-21

And in the pharmaceutical industry, companies like Ranbaxy and Dr. Reddy’sLaboratories have been setting up new R&D facilities, trying to move into
innovative drugs and creations. They have started getting market shares in the
US and also started addressing the US generic market very aggressively.
In term of the research lab and higher education, we also find that the
research labs have become more external and commercially oriented. For
example, the largest group of government-funded laboratories is what we call
CSIR, Council of Scientific and Industrial Research, which has thirty-eightlaboratories: patenting activities has increased, cash flow has increased, andthis is an important number today, about 18 to 20 percent of their revenue
actually comes from the private industry. And we find that some of thelaboratories like the National Chemical Laboratory have become a trend
sector in this kind of activity.
If you look at some of the top engineering institutes, also you will find that,for example, IITs in early 90s hardly had any income from consultancy orsponsor projects. But by the time of 2002-2003, still they don’t have a very big
number in dollar term, but at least compared to what they were doing earlier,there is a substantial increase in their earning from industry.
Of course, a development, as many of you would know of, which is also
something we are very proud about in India is that in the 1990s, we also saw
the takeoff of the software industry. So much so that today it is the largest
export item: in the current year we are expecting in India to achieve 18 billion
dollars in the software industry exports with employment of about one million
people, and that accounts for more than three percent of the Gross Domestic
Product.
So they have become, in a very short time, a very important part of the Indian
economy. It started largely as an export of man power, but today it actuallyPart II-22

consists of what is called offshore development, that is the people in India
located in India actually writing software for foreign customers.
This is actually been helped by the global demand and trend toward
outsourcing of non-core activities. It started just as being based on low costbecause labor cost in India was much lower, it just started based on the labor
cost advantage, but over time there has been strong organizational capabilities
and this is the source of their competitive advantages.
Government has supported this activity but I would not say it is a policydriven activity: a lot of factors actually coincided to actually make this happen.
From the innovation system point of view, I’ll just give you a snapshot of what
had been some of the major influences which help the creation of the software
industry because I am sure, particularly in Vietnam and Thailand, you will bevery interested to know what are the things that would have done in India tomake this kind of development possible.
If you go back over time, the national laboratory, the atomic energy program,the manufacturing companies for telecom and defense and so on, wereactually set up in the 1950s; and at that time there was really no expectationthat we would ever be doing something like the software industry. In the
1960s, the Indian Institute of Technology, which is a top-level engineeringschool, and Indian Institute of Management, like the one to which I belong,
were set up and the program was launched; but the actual software activity
really started only in the 1970s when the first major software company, Tata
Consultancy Services, was actually started in 1971.
The first multinational software company to be started in India was the Texas
Instruments in Bangalore in 1985. Why did they choose Bangalore? One of
the reasons is because these public-sector high-tech companies andlaboratories were all located in Bangalore. So there was strong man power

Part II-23

availability in this area with people who already worked in high-tech industry
and had access to computers.
One of the top companies today, Infosys, was founded in 1981, and other top
companies went into the hardware area in the 80s and moved to software onlyin the 90s.
But the industry actually took off in a big way only with the liberalization
process after 1991. That provided the right environment for the software
companies getting ready to take off. And this was helped by a global movetowards what is called client-server technology. So a lot of software had to bereengineered for the new platform and there was a global shortage of software
skills. This demand was met by a number of new software companies thatwere set up. The engineering colleges in the private sector grew rapidly toprovide the required manpower.
And one of the important government support measures which helped thedevelopment of the software industry was what is called Software Technology
Parks Scheme, which is a government-sponsored program to provide good
telecommunication infrastructure to software companies. This is a very
interesting program because, while it’s called the software technology park, it
is not actually a physical park: you locate your facility anywhere in the Indiancity and get permission from the government to use it as a software
technology park. So you have all the benefits of an export processing zone justin one building, and all you have to do then is to connect yourself to the parkof the IT network through wireless communication system, and then you candirectly transmit yourself to everywhere in the world.
So this is a very innovative scheme started by the government: thegovernment has only set up the infrastructure, and gives certain benefit of theexport processing zone to people wherever they were located. So this gives
you a kind of historical idea: part of the success in the software industry goesPart II-24

back to decisions made in the 50s and 60s when there was no idea at all wewould go on to software.
OK, let me just skip some of all these things, and just draw your attention to
one thing; that is, though software is a big industry in India, only 27 percent is
actually from MNC software companies, and 70% is actually from Indian
software companies. Many of the clients of course could be outside India, but
it is not dominated by MNCs.
One of the concerns in the software sector, however, is that the R&D
spending, or R&D intensity, actually is quite low. This is largely because they
don’t really need to do much R&D. The software activity in India is writing
software code; that is, people are developing software to specifications
decided by the clients, so you don’t need to do much R&D. It is actually a lotof routine activity and a lot of the Indian focus has been on things like quality
management, improving processes and so on, which are not very R&Doriented activities.
In fact, one of the challenges of the software industry is really going to be how
they will move to higher value activities. Currently, of course, Indian software
companies do enjoy good margin; but, increasingly over time, there is going to
be pressure on gaining those margins, and then the challenge is going to moveinto activities that allow you to get greater value addition like consulting, like
product development and so on.
There are some other issues which continue to be of concern in the Indian
context.

I told you that there were a rapid growth in engineering educationin the private sector, but one problem of this is that we are moving fromhaving about 80,000 students graduating a year to about 350,000 students
graduating a year. Quality is a big issue. Because with such a huge growth in
the engineering colleges, we have insufficient faculty, infrastructure problems,and quality issue continues to be more serious. In fact one survey found thePart II-25

170 of the new institutions to be deficient on one of the parameters of theothers.
Entrepreneurship is also a challenge because traditionally in India there aresome issues regarding with attitudes towards business whether entrepreneurs
are really respected or not: there is some kind of hesitation about business,that it is not a good thing for people to go into. Luckily, with the new
economy, these are changing but there is still an issue going for it.
Another issue is the regional development. This is a problem which China has
also faced with. If you look at a lot of the economic growth which have
happened in the last 10 or 15 years, most of us live in the big cities. For
example, the city in which I live, Bangalore, has become very crowded; thetraffic jam is just terrible. The city has become very prosperous, but thedevelopment is not spreading to other areas. Particularly in a democraticsystem, this can be a big problem going forward, so one of the problems weare trying to address is how you deal with this issue.
Some change over time is that the labor movement actually lost much of its
bargaining power in the last 15 years, but we have seen some return of thisbecause, as some of you might know, currently the communist party is
supporting our national government, so they are trying to enhance some of
the bargaining power of the trade unions.
OK, I will just skip some of these things. Just a kind of sum up: how theinnovation system has changed? I think what happened is that theliberalization provided the opportunity for the organizations to bring up
capabilities and find new market values and output. That’s why we see thecapabilities have got enhanced in certain sectors, like I mentioned, in
pharmaceutical or the automobiles.

Part II-26

These sectors have been characterized by very rapid demand growth andchanges in the competitive environment. For example, our Indian emission
regulation has become very strict, so that promotes a lot of innovation in the
two-wheeler industry. There have been a lot of competition; and a lot of rolemodels like Dr. Reddy’s Labs provide examples for others. More companies
are becoming more competitive. The software sector has been very successful
in leveraging a resource base to exploit the market opportunity.
But one of the problems which we still see is there is no joint working between
the manufacturing and the software sector. The software sector has been very
export-oriented, externally focused, looking for customers in the US andother countries, while the manufacturing sector is largely domestically focusedand there is not much link between the two sectors. But for our innovative
system, this is one of the challenges going ahead.
Future Perspective
A far as the future of the innovation system is concerned, there are a few
challenges that I think are important: One is we have to sustain growth in
employment intensive service businesses like the IT sector that I talked about.
We have to maintain competitiveness through constant upgrade of capabilities,
and this is particularly important for the manufacturing sector. There aresome traditional sectors, like textiles, where we used to be very competitive
globally, but we have lost them. We need to recover competitiveness there,
particularly with things like the Multifiber Agreement having been abolished.
With new markets opening up for textiles, we need to move much more
rapidly andovercome the loss of market share to China. China, as all of you

would know, is extremely well in the textile industry, but we haven’t been able
to do that. We need to go forward, enter and succeed in a few selective, hightechnology industries, too. We also need to revise innovation system andagriculture and health care particularly because agriculture is related to about
Part II-27

60 to 70 percent of our population, which even rules the area; and health care
is very important to improve these standards of living. Yes, there is a lot moreI could talk about, but I think I will stop here. OK, thank you.

1.4 Q&A Session with Dr. Krishnan
Dr. Sumani:
Thank you, Dr. Krishnan. Can you stay there for a while, because there might
be a few questions for you, I guess? Any of you have a question?
Question:
I have a question. Dr. Krishnan, who do you regard leads the science andtechnology policies in India, local government or national government?
Dr. Krishnan’s answer:
In India, science and technology policies are largely decided at the national
level. So when I talk about the government in the presentation, 95 percent oftime is about the central government. The central government decides
industrial policy. It decides S&T policy. So the central government has amajor role in the innovation system. Historically the state government has
played a very small role in the innovation system.
Question:First of all, I’d like to thank you for giving us a very clear view of the Indian
national innovation system. I think it was an excellent presentation. Thankyou.
I learned a lot. One question I have is: though maybe you have mentioned it,
and I may have missed it, you did not speak much about the role of Indian
universities in the national innovation system. For instance, I would like toknow what role the Indian university plays in your famous pharmaceuticalindustry.
Part II-28

Dr. Krishnan’s answer:
OK, to do that, I have to take a couple of minutes because I have to explain alittle bit about the structure of the university system.
India has about 270 universities, but most of these universities are largely inthe activity of education and training. They are not very active in the research.
The technology institutes are different from the universities like NIT,
National Institute of Technology. These are not part of these universities.
These separate specialized institutions have a much stronger research focus.
But the traditional universities unfortunately over time have become largely
teaching institutions.
To address your specific question about the pharmaceutical industry, my guessis that the university system is not very involved in the pharmaceuticalresearch. There are only two or three parts of the public innovation system
which are involved with pharmaceutical research: One is two labs under the
CSIR, Central Drug Research Institute in Lucknow, and the other is the
Indian Institute of Chemical Technology in Hyderabad. These two institutes
have important pharmaceutical research going on within the labs. And thegovernment also has a program which I did not talk about because it is quite
small to support joint work between these labs and the pharmaceuticalindustry.
There is only one university which, as far as I know, has a strong department
involved in chemical and drug research. That is the University of Bombay,
what is now called the University Institute of Chemical Technology (UICT).
They have a strong chemistry group which is involved both in chemical
research as well as in drug research. But I think, if I go on the general level, I
would say the universities are not much involved in the pharmaceuticalindustry.
Question:
Part II-29

My name is Kitti Tirasesth from KMTL. You mentioned about the threesectors. So you define them as a part of service or industry?
Dr. Krishnan’s answer:
In that definition it’s part of service.
Question:
Actually your presentation is very impressive, especially you mention aboutthat India move too fast into service. I just wonder, can you give us somekinds of key reasons or some determinants why it happened? Why India, as
you call it, move too fast into the service?
Dr. Krishnan’s answer:
OK, when we talk about the growth of the service sector, first of all I should
clarify that the service sector growth has come from many different parts ofthe service sector. It comes from telecommunication which is the one very fast
growing in India. That comes from financial services, again which is after
liberalization grown very fast; and of course activities like software, also.
One of the reasons I think these service sectors grown very fast compared tothe industrial sector is that the service sector has had less constraints in growth.
The manufacturing sector I think is more dependent on a lot of physicalinfrastructure, and the physical infrastructure in India, to be honest, has notreally developed as far as it should have during the liberalization period.
The public investment in infrastructure has not been adequate. So we haveproblems with power, we have problems with water, we have problems withland, and all of these infrastructures are very important for any kind of
manufacturing industry, whereas the service industry does not depend onthese infrastructures to the same extent.
Many of the software companies have their own backup power supply. They
are communicating directly with clients abroad, so you don’t need to worry

Part II-30

about infrastructures much. So I think one reason why our service is growing
very fast is the constraints to entrepreneurship and service business have beenmuch less.
The telecom industry, for example, was deregulated by mid 90s. So during lastten years, we have very rapid growth in telecom industry. So I think today, forexample, if you talk to one of students from my institute who wants to set up a
new business, he will definitely choose the service business. He will not set up
a manufacturing business because he knows that there are too many
headaches even after liberalization. Still there are more regulations that will
inspect somebody. They will come and check for pollution control; for you
know there are so many different things, whereas software is very simple.
I just rent an office and put the computers and tomorrow I start my business. I
have a personal experience, though I did not mention in my introduction, myfather used to run a manufacturing company for twenty years. He has done
the manufacturing company, so I actually worked with him. It is quite tough,but three or four years ago when one of my students asked me to join him, westarted a software company in two weeks. It is a different matter; we did not
succeed for some other reasons but it is quite simple to start a software
company, very little regulations, very easy. So I think these are some otherreasons why, you know, the service sector has grown much faster than the
manufacturing sector.
Question:
May I share the opinion about the growing of the ITO (IT Outsourcing)
software? I think one of the key is that the language is English because Indian
has a very good and high potential in that language.
Dr. Krishnan’s answer:
I should also mention that increasingly one of the other big growth areas inIndia is what is called Business Process Outsourcing. It is back officePart II-31

operations like data processing, call center, transcription — all these activities
have been rapidly growing in the last four or five years. That again is using,
you know, what he is talking about, using English language skills. Good
English language skills and very smart people are available at low cost.
So many MNCs are shifting their entire data processing and call center
activities to India. Many of the insurance companies and financial service
firms have shifted. And from the employment point of view, that is growing
very fast, but again you mainly find them in big cities because it requires
English language skills for call center activities. You won’t find them so muchin small towns. Small towns are more local language based, but good English
language skills are in big cities without which nobody can be hardly successful.
Question:Thank you very much for the contribution. My question is concerning more ofyour point. You mentioned a large increase in productivity andcompetitiveness. But I want to point out the concept of cost, for example,
production cost. When major Japanese companies are thinking about cost, itmeans production cost. They think about a final price. But if you produce one
product and someone uses it, at the end of its lifecycle, you have to recycle itor throw it away. This costs you money, too. And nowadays some European
automobiles companies are already thinking the cost should include thepenalty for polluting the environment and so on, and I think it’s very
important. Otherwise, later you must pay much more money. Do you havesuch a point in your process in India?
Dr. Krishnan’s answer:
First thing I should mention is that India is not very consumption-oriented. If
somebody buys a car, he will use that car for a very long time. They may sell it
to somebody else, but there is no concept of junk heap. Until the carabsolutely breaks down, they will not stop using it. So people don’t throw
Part II-32

things away easily in India. One good thing about that is that there is not somuch wastage of resources.
But to answer your question specifically, so far there is not much of emphasis
on recycling actually, because there is not so much waste of goods. People do
not focus so much on recycling.
But in certain industries, the environmental concept has become very strong.
In automobile we have adopted European emission regulations of exhaust gas,
and the pollution is actually reduced. In some of the large cities now, we have
moved away from using diesel to using compress natural gas, which is again
more environmentally-friendly because the combustion process is more
complete. So something like has happened, but in terms of recycling, I don’t
think so much has happened so far. It will happen over time, but so far it has
not happened.
Question:
I heard you said about the concern that India is growing too fast to the service
economy. Rapid growth of the service sector is also one of my concerns.
The main topic of the Honda Foundation seminar is eco-technology and I
think that concept comes mainly from traditional sectors like automobile,
chemical and things like that. So my concern is whether or not there is an
issue about eco-technology in service sector like IT, because I think manykinds of the resources: human power is the key resource. And we may be verymuch involved in the situation where the IT sector creates some kind of waste,or the wasteful use of main power; then what is the kind of pollution in thisindustry? It is one thing.
And another thing is that when we move into the service sector it createsmany new problems, new issues that we don’t expect. And when things go too
fast, the society may not be able to adapt to its pace. And if we, just recently

Part II-33

about two months ago, there is a case in Vietnam, one man died because hespent about two days playing games online. We never expected that sort ofthings. Do you call this a “pollution” or things like that?
And from what you say it just comes into my mind, that maybe one of the
topics we need to discuss is: what is eco-technology in the service sector? Andeven the automobile sector is more and more removed from the concept oftraditional sector: it is now involved in much of high-techs and more serviceoriented than traditional industry.
Dr. Krishnan’s answer:
One issue is the movement toward the paperless office. I think that is one
environmentally-friendly activity they are trying to achieve, but they havetheir own waste problem. They have electronic waste, for example. People aretalking more and more pointless things on the Internet, and this is so muchwaste of signals and data. Your point on human capital, I think, is a very
interesting point.
There are full of occupational problems which come up with software titles ofwork. For example, your overwork: people are having problems in managing
their family life. Lots of this business process outsourcing I’ve talked about
happen at night because it has to happen during the daytime of US or othercountries. So people work at nighttime and it raises their own issues about
biological clock getting kind of shifted because they have to work at thestrange time of the day.
But to be honest at the moment, people are looking more at the economic
opportunities. They think there is an opportunity. They try to exploit that andthey are not very worried about these problems. In some point of time, it may
become very serious. They will be addressed, I think, at their point of time.
But today people are not worried about that too much.

Part II-34

As for the other point, I paraphrase it as what is the best way to exploit thepotential of human beings. Well, I think software industry in India has given agood opportunity for people to exploit their potential. Indians are quite goodin math, good in English language. Software industry has given them an
opportunity to do that and also earn a good living. I mean the kinds of salaries
you get in software industry in India are much higher than the average salary.
It is a good standard of living for people in a poor country.
So I think, you know, on the balance, I would say yes, software industry has
been advantages to people but we need to look at future challenges like value
addition giving more opportunity for creativity, more opportunity forinnovation, allow people to realize their full potential. That will come if wemove into more value-added activities.
Question:
Let me introduce myself again, my name is Nguyen Tri Dung; and I actually
thanks very much for your very wonderful presentation. I see many
similarities between India and Vietnam. Dr. Tran Ngoc Ca is also here from
Vietnam, and here are our friends from Japan and from Thailand. Actually I
see a movement towards the software sector now in Vietnam, and I want to
ask your comment on this issue. In Vietnam people try to build up high-techparks. This is the question of clustering; and in HCMC and Hanoi, you see theprocess of urbanization.
Today I have a counter advice to the government: I said, instead of going toclustering like the high-tech park, we should have a network of high-techparks, or a network of the industry in Vietnam. Now in Vietnam, thegovernment has waited for ten years to formulate the concept, and then went
to implementation. We have talked about the high-tech park for the last ten
years, and now in HCMC they stopped to implement that, and it’s not yet inoperation. They said they need a more of few years.
Part II-35

As our friends here and you said, manufacturing is a very difficult issue.
Before I work with the UN, we discussed a lot about the development issues.
At that time, all my colleagues saw India, I must sorry to say that, as an
example of the Asian trauma. And we talked a lot about it.
But for the last twenty years, I have seen the growth of software business inIndia as the main contribution to the India economy. You can see it as one
kind of the exit for the 60s to emerge into the year 2000 and after. Actuallywhat we want to learn from India is the government policy in term ofliberalization.
Like you say, people can have a kind of building, and the government can see
it as an export processing zone or something. Here we have activities in ourcomplex. I provide this concept here. We are the first to go to the high-tech
production here in Vietnam. Quite ahead of the government movement, we
try to do, we try to persuade, we try to get. I think liberalization is not aprocess of giving where the government gives it to the people, but actually it isa process of challenging where the people should work their way. And then in
Vietnam, we have attempted to persuade the government, but they reject us
because they don’t they have such a policy. And actually we started here fromthe handicraft business; and then, you know, our staff members, after theyreceived training and worked hard, now export the high-tech product.
So this is a very practical case and what has happened in India? That means to
go to such an extent, you have a lot of what is called case study: I mean theexperience of Indian, experience of Thai, and experience of Vietnam. Dr. Ca
may give some more comments, but I think you get my viewpoint: I don’tknow what happened in Thai or in India, but in Vietnam the government justconcentrates on the high-tech park or the industrial zone, but doesn’t see thecountry as a whole.

Part II-36

The development is also seen in such a clustering place, so I want to give thecounter advice to the government, claiming that they should have the networkof high-tech parks. Suppose a small place like us here is like the terminal andthe high-tech parks are the server, then we link together and work together. If
you think, for example, about biotech-technology, we should not have thebiotech-experimental research in the high-tech park. The biotech-technology
should be done at the place of production: it should develop in the rightproduction or in a kind of innovation-driven environment, not in the park
itself. What is your comment on this? Thanks and also I’m sorry for my long
discussion.
Dr. Krishnan’s answer:
I think it depends a bit on the kind of industry we are talking about. One of
the reasons why countries have supported high-tech parks and science parks is
because they believe there are some benefits of clustering in what they calleconomic liberalization and joint working between companies. I think thesecountries are largely impressed by big success in the Hsinchu and otherscience parks in Taiwan or some of the other well-known industry parks inother countries. So I think that is one of the reasons why people haveemphasized the importance of creating the science park or the industrial
parks.
But, in the software industry, one advantage and I don’t know what you call it
so, is that most of the companies do not require too much networking withother companies. Each company pretty much does its own activities; so that’s
why the joint location has not been very important.
At the same time, in India we have a lot of problems because the land isprivately owned. When the government wants to set up a technology park,
they first have to acquire the land from people. Because we have thedemocratic system, the moment the government tries to acquire that land,Part II-37

people will go to the politicians or the court, and challenge the landacquisition. So setting up any industrial park or any activities take a very longtime because of the time for the government to acquire all the land andconvert it into industrial area and so on.
So I don’t know who has the blame to it, but somebody realizes software is allthat is required. In the realm of software, all that people need is access to agood telecommunication. It does not need wire either, because wirelessfacility is possible. You can use microwave, or you can use othercommunication facilities. So they just came up with the idea to just create asystem, in fact, a very simple one: you have one building, and you have only toapply to the software technology park with a registration number. You put it
up outside the building, saying this is my software technology park, recognizedby the director of the software technology parks; and then you become anexport zone. So, if you are importing something, you can import it without
custom duty as long as it’s located within that building. If you want to take itoutside the building, then you have to maintain some registration format, also.
It’s a very simple system and it works very well.
So anybody who wants to set up a software export-oriented company, he justapplies for the permission. Every quarter at the center he reports to thesoftware technology parks, saying I export it, and this much software during
the last quarter, and so on. That is the only reporting requirement. And
because there is no physical movement of goods, it is quite simple to operate
in this quality, but I don’t know if it can work in every other thing.
We have a similar scheme for hardware that does not work as well. Just likethe scheme for software technology parks, we have the Hardware Technology
Parks scheme. I think you can also do with it well, but that have not taken off
so well.

Part II-38

So I think the idea is you have to be a bit flexible. You have to see what works
because you know that the market outside is changing very fast, but the
government moves very slow. There is a big gap between the pace of thechanging in the market and the pace of government decision making. So thegovernment has to move more in a more flexible manner. That’s the only way
to deal with the uncertainty which is there in the market, but it’s difficult: thegovernment needs quite time to understand the process.
Dr. Sunami
Thanks, you gave us a very good starting point for later discussion in themorning session, and I wish we can talk about the high-tech park in theafternoon when we will have had a HCMC presentation on their policy. I
think we’ll have a short break. Thank you.

1.5 Follow-up Discussions
Dr. Sunami:
OK, let’s see. I think the presentation by Dr. Krishnan gave us a lot of goodidea as to where we start our discussions; for example, the roles of publicresearch institutions and universities, and, more broadly, the science andtechnology infrastructure before the reform of 1991; and how that was reallytranslated to the strong growth of the R&D in general.
You can find a similar type of questions in China as well, where you have sortof an increasing contribution by R&D, the industrial sector’s R&D. But if you
measure the intensity, it is very poor. I don’t know what is going on there, butthere are a lot of times when the institutional reform of public research
institutions has not just been transferred to the private industry. I can’t give
you statistical numbers of R&D activity in industry now, but it really doesn’ttranslate into the strength of R&D capability of the industrial sector.

Part II-39

Other things like entry cost and social institutions deserve our discussions as
well. Why do we have the growth of software industry? Because that’s where
the social and the entry costs are the lowest; and this is a really interesting
starting point. If you look at some Asian countries of different institutional
background, the cost factor is really playing a key role in giving a very
interesting characteristic of their development strategies. I mean there are somany things we can talk about.
But going back to the Hanoi conference, we had the whole conference divided
into three sections: one was looking at the role of entrepreneurship andinnovation from the start point of the macro economics and institutionalinnovation system.
And the second section was really from the policy side, and there was also ainteresting question raised as to whether, you know, the way the growing
activity of R&D innovation occurred whereas there is no policy involved. So
this is another sort of question we can talk about.
And the third section focused on the eco-technology aspect as to whether thecontent of the technology and whether I’m not quite sure this sort of three
section format is worthwhile to continue. But, Dr. Ca, maybe you can start by
giving your impressions from the Vietnamese point of view after hearing
experiences from Thai, India, and Japan.
Dr. Ca:Thank you, Sunami-san. Actually I believe, for each of the Honda Foundation
symposium, which is to be organized in different places, there could be achosen theme, right? For this year the chosen theme is “linking innovationand entrepreneurship for developing countries.” This theme might change. It
depends on circumstances, depends on the orientation, and depends on where
we are going to organize this. But despite these changes, I believe this key
issue remains. We might rename or reform it one way or another, but this isPart II-40

the key because it’s crucial for not only for Japan or Vietnam or Thailand, but
it’s kind of a common concern or common interest of so many organizations
and nations around the world. So I believe that this should be the main, if not
specific, theme of our future conferences, right? From the Vietnamese, more
Vietnamese perspective, I got some strong kind of impression or response
from different kind of stakeholders who are involved in this symposium.
First, I will talk about a little bit about the policy makers — people comingfrom ministries and from the cabinet office or from the national assembly,
which is similar to the parliament in Japan. They quite like the idea of putting
this thing because this is the forum where they can learn experiences fromother nations of the world, and they have the chance to talk and mingle withpeople from different background and to make policy making process more
real. Certainly there are strong interests from the academic circle. People
from research institutes, from universities — they learn a lot and theyexchange a lot. They get more contacts to develop. But last but not least, it iscoming from the enterprise sectors, especially from the third sector on theeco-technology, which might have been associated with the presentation of a
new kind of motorcycle model at the conference. I believe that there are verymuch strong interests from the firms and from the people.
OK, you talk about the policy and you talk about the economic theory
concept, but here is the thing that they want. They can see it, they can try it,
and that would be a lovely thing. And I reckon that in the last symposium in
Hanoi, we have the last contingent of people from the mass media and as
usual they pay a strong interest and attention to this kind of event.
The question is what we go beyond this symposium. I believe that, OK, we
produce this volume which is a very good product. But I believe that the
impact of this kind of symposium does not stay in this volume it goes beyond
that. It is increasing earnest developing contact, networking. Like Mr. Dung
Part II-41

and others said, networking is important and there could be several kinds offollow-up programs after this kind of symposium: one is that we could think ofsome kind of joint research project. This is more interest for academic people,
like people from Tokyo University and Tokai University, and people from
Vietnamese or Thai or Indian research-based organizations.
That is one type of thing, and the other type of format is of more macro kindof, more exchange of ideas among politicians, among the members ofparliament, among the members of the cabinet office to develop the bilateralor multilateral collaboration. Why do I mention this? Because again I want torefer to my latest visit to Japan. Before we went to Japan, we met Mr. Koji
Omi. He is a member of the Japanese parliament and he said he actuallywants to run this kind of idea forum in Japan; and when we were in Japan, we
met him again. But not only him, we met people from the MEXT, deputy
minister, and we met Abe-san from CSTP (Council of Science andTechnology Policy). All of them expressed a stronger willingness to develop
collaborations between Japan and Vietnam in particular and with Asia ingeneral because so many things are happening for the last few years. This kindof level I would think this kind of forum could lead to.
The third follow-up format is that more industry-based activities. Here comesthe role of companies like Honda, like Honda Vietnam, like Japanese
association of business in Vietnam or in other country because, whatever you
do, what kind of policy you introduce, it should lead to, you know, economic
benefit. It should lead to an increase in competitiveness or performance of thefirm and more collaboration.
For this kind of follow-up, we can touch upon issues like FDI or techno
transfer or subcontracting agreement. I understand, for example, one of theconcerns of many multinational companies in Vietnam, especially theJapanese firms, Honda for one example, and Toyota for another, is lack ofPart II-42

local supply in term of good human resources. Whenever we talk to them,
they say it is very difficult to recruit good Vietnamese skills in terms ofengineering, in terms of labor, and in terms of supply of parts for the assembly.
So I think it’s the kind of thing we can do about: development of supporting
industry for multinationals, development of networking of large
multinationals and small enterprises in Thailand, Vietnam, and India. It’s
indispensable when you argue you want to revise manufacturing strength, forexample, in India. That is the key issue. So you know the follow-up format
should be a kind of mixture: it could be academic, it could be more enterprisebased, it could be at the more macro-level, in order for things to just fit
together.
Then the question is, how you want to go about that and to what extent wewant to develop this kind of things? But, so far I think that it could be threepillars, we might want to call it, for collaboration and networking together:
there could be an academic pillar, an industry pillar and a government pillar.
Actually there are all kinds of components in so-called innovation system.
Maybe I should stop here with my reflection.
Dr. Sunami:
I guess we can ask some comments from Mr. Arimoto and Mr. Nakajima fromthe policymaker side. But I actually hear the inspiring idea of researchcollaboration about the entrepreneurship. I think we can take the notion ofentrepreneurship a bit beyond what we used to think in term of the westernsort of concept.
Here we talk about the entrepreneurship influenced by social and politicalinfrastructures as well, where you see the entrepreneurship really taking place,in the place we depend on the kind of the policy, regulations andderegulations and so on. And if you are given the idea that there isentrepreneurship everywhere to begin with, we see a certain sector in a
Part II-43

certain country that has more entrepreneurship activities than the other. It
really depends on that kind of policy and institutional arguments and I thinkthat could be another.
So we focused on the entrepreneurship. Last time I remember we talked
about it in the Conference in Hanoi because Vietnam was transforming fromthe planned economy, self-sustained economy to a market one. I think to givean example of how the firm or one entrepreneur, in this case Honda, todevelop the kind of the technology and the innovation that really affect theentire social eco-system, it is just like giving an example of the kind of
introducing a new actor to the scene, and I think entrepreneurship is really thesystem as a whole, may be that could be another further discussion for the
next round.
Mr. Arimoto:I want to make some kind different viewpoints than that just Dr. Ca said
earlier. So you had the chance to talk with Mr. Omi and Mr. Abe who are thehighest-rank policymakers in Japan. I think when they’re talking about
innovation, they are thinking about the way how to get competitiveness — not
only competitiveness but also they want to get social stability. They want an
innovation of not only economic growth, but also of social stability, public
values, and maintaining the traditional diverse values etc., etc.. That’s the
public policy.
Of course the Honda workshop is focusing upon the way how to get money by
private companies. Policies depend upon the scope of innovation, and thedefinition of innovation. So, before we talk about the innovation, we should
think about the frame of the innovation. After that, it’s OK for us in future
Honda workshops and symposiums to focus upon the way how to get money
by private companies. Of course such a way is supported by each country’s
government, depending upon the stage of economic growth. Japan is leading
Part II-44

and the China follows the leader, and it is the kind of development. Anyway,
my personal view as a government official in Japan, the Japanese government
officers and high-rank policymakers are having a broader viewpoint about theinnovation policy. Thanks.
Dr. Sunami:
I think the focus of the activities of the Honda Foundation is really that sort ofbroader one as Professor Uchida mentioned earlier when he talked about ecotechnology. I think it’s really about that. Also the situation in India where,
you know, the role of science... S&T institutions are now increasingly
demanded by the public to solve the problems beyond the competitiveness ofdealing a company. That’s what here we are talking about the challenges
ahead, and I think it’s something that may be in line with what we have talked
about, reflecting on that last conference.
Mr. Nakajima
As Mr. Arimoto has mentioned, there are many different responses andreactions at the point of the Japanese government.
In my classification, there are three different type of research: the first
segment, as you probably agree with me, is academic research. This is what wehave been conducted in the university. The second segment is basic researchfor social infrastructure or foundation of researchers. For example, there areglobal and meteorological observations, and you could also include in thiscategory the work of measurements and standardization. This type of researchhas been conducted in Japan mostly at national institutes for the last 150 years
since the inception of our modernization. Entering the 20th century, thenational institutes started researches for the seeds for industry, seeking
beyond knowledge for social infrastructures. The third segment of research isR&D that everybody might be most keenly interested in, and this is whatcompanies have been conducted in most of the cases.
Part II-45

These three segments of research have been sort of isolated from each other.
But in the 1990s, when Japan faced with a lot of economic difficulties,
economic confusions, we had to rethink about how we could sustain
development for the future. Government and industry began to place pressure
on national universities and institutes so their researches get much more
linked with practicality and commercialization. Especially national
universities have considered themselves to be civil servant as the drive forceof academic research, and basically prohibited their scholars and researchers
from close contact with the private sector. So we started some deregulations inthat area at the beginning of the 21st century.
This is only a general sketch of researches in Japan, and we have met withgreat challenges, especially in terms of government’s role. For example, how
could the government support these three segments and in what proportion?
Do we need to enforce new regulations, particularly with regard toenvironmental issues? This may sound a bit retrograde, but certain regulations
are required to protect the environment. And how are we able to promote thethird, new segment of researches for the future? I think it’s really the task wehave to tackle for the future; and, by the word “challenges,” I meant this kindof situations in Japan during my self-introduction at the beginning. As Mr.
Arimoto mentioned earlier, what he just said is really correct for the last fiveor six years: Japan has been trying to strengthen on technology and industry inorder to improve its international competitiveness in the world. However, I
believe that these three areas of research that I mentioned here have todevelop in a balanced manner. Otherwise, we will not be able to compete in
the world’s mega-competition; and, at the same time, we will not be able to
make contribution to the developing countries.
And last but not least, I’d like to thank Dr. Krishnan for his insightfulpresentation. I think he has given us a great traction toward the way how

Part II-46

future researches should be conducted as well as this conference should beheld in the future. Thank you very much.
Dr. Sunami:
Thank you. Dr. Ca, would you give us a brief comment after hearing thediscussions in the last conference in Hanoi?
Dr. Ca:Yes, I have an impression in Hanoi that most people do not have the conceptof eco-technology. I think it’s a little difficult for participants to makediscussions based on eco-technology, including myself. The concept of ecotechnology was not clear at that time. But now we have had several occasions,and I really hope this afternoon we can think a little more eco-technological— how we can think eco-technologically of our future progress of industry or
management of the people because the environment itself contains so manyfactors than anything else. So this is not so simple on the one hand. But, on
the other hand, it is very important because our science and technology
paradigm includes not only information, material, and energy, but also life,
especially human life. This is very broad but essential, I think, because we arejust human and science and technology are just for us and we should control
them, not science and technology control us. This is my point. Thank you verymuch.
Dr. Sunami:
OK. Mr. Kitti, may we have some reflection from Thailand after hearing what
we have been talking?
Mr. Kitti:
Sorry, last time I didn’t join the seminar in Hanoi. I think I should listen to
your opinion about last time first.
Dr. Sunami:Part II-47

OK. Then Professor Goto, do you have any comment?
Mr. Goto:
OK, I have two points. One is eco-technology. Everybody mentions ecotechnology is the way we should go. To develop eco-friendly technology, weneed a private sector capable of development in learning. I think there are
two fundamental themes for this kind of enterprise: eco-technology andentrepreneurship. I think it’s time to start thinking of combining these two,
thinking of, for instance, eco-friendly business model and things like that.
My second point is a bit different. I think the most difficult thing for thedeveloping countries who are trying to catch up today is that they have to deal
with the WTO-TRIPS agreements which did not exist when Japan, Korea,
Taiwan, and China started their catch-up efforts. So there is area difference.
We need to think about appropriate ways of technological capabilities inconsistent with the TRIPS. You have to deal with this sort of difficultagreements, but you have quite a room. I think you can find an appropriate
way to do your catch-up even under the TRIPS.
Dr. Sunami:
Thank you. That is an important point. Especially when we talk about theJapanese experiences, we often forget about the differences sorts of goal insuch a global economic environment that developing countries today face —not just technology, the Internet, outsourcing, and even linking the open US
economy to certain parts of the region, Taiwan, Shanghai, and Bangalore.
And all these new phenomena are what the Japanese, I think, will not facewith. Even the Taiwanese or the Korean won’t experience the same challenge.
Ten years ago there were a lot of studies about how the Taiwanese and the
Korean pursued their industrial development on different strategies. But
today I think it’s important to have that notion at the beginning — we are inPart II-48

an environment which really links everything under this new global economic
trend. Mr. Krishnan, do you have some comment on that?
Dr. Krishnan:First, I’d like to say that Dr. Goto’s point is very important. I think the policy
environment created by the new TRIPS is going to put a lot of constraints on
the developing countries in many areas. And I think there is a very clear
implication of this. The clear implication is that the government has to bemuch cleverer, much more capable, and much more flexible because even
WTO, for example, allows a new kind of government support in the field of
R&D. So government needs to take use of those provisions to support the
local technological development wherever possible. Government had tobecome cleverer and more innovative in term of using those agreements toactually promote the local industrial activity; and this means for government
there is a new way of thinking. They have to start looking at a more
promotional role.
Second point which I would like to make is that I think we should do not limit
the idea of innovation only to technology — that’s what we are talking about
just now. It suggests that the innovation has to extend to government, it has toextend to organization, it has to extend to management — in every dimensionof the economic activity or even social activity, we need to have the idea of
innovation.
If I can just take one minute just to give you an example. In the software
industry, many of the software company in India are working for multiple
foreign customers, and each foreign customer wants his intellectual property
not leak out to some other company, or even it should not move out from thegroup of people who are working on the particular technology.
So Indian companies create a new concept called “offshore development
center;” that is, within their software development center, they create one part
Part II-49

of the company which only devotes to working on a particular company.
Within those offshore development centers, it’s like being in a customer’splant: they have staff of the company, IP policy of the company, andeverything of the company. People who are working for that client work only
for that client. So this is a very simple example of an organizational innovation
to address the concern of the client. I think, more and more, if you want to be
successful in the global market, you have to also think of a new way oforganizing your activities.
The third point I would like to make is just in term of eco-technology. There
are two dimensions here: One dimension is that government policy isimportant because companies will be pushed to actually look for eco-friendlymeans of doing things. If there are strong regulations, government has to use
its regulation power to push company into more ecologically friendly activity.
We have many examples: Scandinavian countries, for example, are leaders inmany of the environmentally friendly technology because those countries
were some of the first to put in place very strong regulations; and I gave
earlier an example of India’s automobile industry. A lot of innovation has
been driven because of the increasing environmental standards. This has
pushed all two wheelers to move from two-stroke to four-stroke engines, fromfour-stroke engines to further improvements.
The other dimension of eco-friendly technology which I think we need tostress is the link between being eco-friendly and being efficient, because themoment you are eco-friendly, you waste less resources. It also improves yourefficiency, productivity, and competitiveness. So there is no contradiction
between being eco-friendly and being efficient. That’s important to stress that
there may be a short-term cost because you invest more to improve yourefficiency and to be more eco-friendly, but, in the long term, that’s the benefit
even for the company — I mean, I’m not talking about the society; I’m talking

Part II-50

about the company. So we need to emphasize the eco-friendly not because it’ssomething fashionable, but because it’s something efficient and beneficial tothe company.
Dr. Ca:Yes, reflecting on that, actually in Vietnam there are some policies, or may I
call, policy actions toward promoting so-called “ecological” aspect oftechnology. Have you read the latest report by the Minister of Industry about
how to implement the new regulation on the importing car assembly?
Actually a lot of car assembly isn’t qualified because they do not meet certain
criteria. That could be a good movement in preventing us from wrong doing inthis area. You may want to add something about that?
Mr. Arimoto:
Whenever it comes to such kind of policy, there are always some politicalissues involved, and here comes the bargaining power of different groups. If
there are those who can not satisfy that kind of standard, they are strong
enough; they can delay the implementation of the standard. We experiencethat in motorcycle industry in this century. So a lot of things here is not only
technology, but also the awareness of the society, and also some politicalinterest of different groups.
That may go beyond the theme we discuss here, and that’s why earlier in myintroduction I said that I see great potential to use game theory for analyzing
this sort of behavior. If we can create a kind of structure that is for the benefitof the stakeholders, they will go for eco-technology — that’s the ideal. We
need to create a system or structure that is the equilibrium of eco-technology;but, given all that complexity, how we can get there is a difficult problem; but
I think, since any problem can have some solution, we can hope for that.
Dr. Kitti:

Part II-51

Well, yes. I am glad to share some experience. I have spent about one year to
study about the technology road map for the national research courses ofThailand. The project is called “the technology road map for computer andenergy,” and we have made a ten-year road map starting from next year.
During the process we found several key factors. As we focused on social
technology and environment economy, we finally found that government
policies and politics are a big factor to go on or to stop the reality. This is what
we have learned from the technology road map.
But I would like to find out the adequateness of the road map. First you needto think about the whole scenario, and after that it’s quite good to make thepriority of necessary technologies and then to focus on the key technology.
That is one possibility to go on this topic, I think. Thank you very much.
Dr. Sunami:
Thank you. I think we have to wrap up this session in five minutes or so, but I
have a clear idea at least about the naming of our conference, which should be
like “linking eco-technology and entrepreneurships for developing countries
under the new global economic system.” This is a very fundamental theme
that I think we can all agree on; and, within this, we can talk about two larger
sections instead of three last time. The two may be forcing innovation forgovernment and forcing

innovation for business-firm level which

includes stuff like eco-friendly business models and so on and so forth.
As for the government section, you mention about the technology road map.
We have regulations that are playing an important role in India, Japan and
Vietnam situations. We can also include things like the procurement and therole of government that should be more innovative in terms of including akind of policy not just giving the subsidies or support for a particular type ofindustry, but also having the regulations, efficient procurement, and so forth— that is another important role of government.
Part II-52

Also it needs to include Mr. Nakajima’s point about strengthening S&T
institutions, which is the institutional infrastructure. This doesn’t really link
directly to the kind of objective, but that’s very important to understand theyplay a very important role. You might want to jump onto this, or anybody?
Dr. Ca:Well, actually I think so many of you gave some very quick idea on how weare going further, and I agree that we should make eco-technology become
more all there, all the time. It is only there all the time, but we could make aneven more centered focus with link to the entrepreneurship; and I agree
entrepreneurship is the key because we all know that policy is important. But
no matter how good policy is, if there won’t be enough degree ofentrepreneurship in each society, or if there is not all that hand to nurture
entrepreneurship, very little thing could happen. We need good policy, and it
is kind of a two-way thing. Is there any other comment?
Dr. Nakajima:
I just would like you to remember what happened thirty years ago at the Riode Janeiro summit. At that time “Three E balance” was discussed: energy,
environment, and economical development. And I believe eco technology isreally the very thing to solve that issue of balancing those three E’s. Actuallyenvironmental and energy issues are inseparable.
Let me take an example about the refrigerator or freezer that has been usedin Japan. The energy consumption for freezer in Japan has become the 1/7 ofthat of 10 years ago. So I’d like to say that, if the economical effect efficiencies
go up, the usage of energy goes down; and, along with that, the environmental
issue can be reduced. That would make possible with a combination of several
elements including the advancement of electronic industry technology, thedevelopment of better raw materials, as well as industrial efforts to makebetter materials.
Part II-53

The direction of the symposium for the future for further development will bethat first the companies, under this wonderful banner of ideal, will take theirrole at the activation of eco-friendly industry; and, at the same time, for thesame purpose, the government is going to provide the support for the private
sector; and also, university-academia has to provide the theoretical basis for
efforts to construct eco-friendly businesses that enterprise would like toestablish. Thank you very much
Dr. Sunami:
Ban-san, I think we have a new title for the business conference.
Mr. Ban:Well, thank you very much for the presentation and discussions. I think it’s
about the time to end the first section of the program for today. And I’d liketo thank you for your very sincere discussions; and if you are not fully satisfied
with the outcome of the first section, probably you are going to have more
spirited discussions in the afternoon with participation of some more people.
(End of Morning Session)

Part II-54

Records of Honda Foundation Eco-technology
Workshop 2005 in Ho Chi Minh City
Part II. Afternoon Session
2.1 Opening Remarks of Mr. Toshio Ban
Good afternoon, everyone. Welcome to the eco-technology workshop 2005 in
Ho Chi Minh City. My name is Toshio Ban, managing director of the Honda
Foundation. Before we get started, I’d like to thank all of you for joining thismeeting today.
The Honda Foundation has advocated the concept of eco-technology since its
inception. Eco-technology reflects our belief that we need to step away fromtechnologies devoted only for efficiency and profit, and change the paradigmof technology so our activities become harmonized with the environment.
Last February we hosted a symposium in Hanoi under the theme of “Linking
Innovation and Entrepreneurship for Developing Countries.” It produced a
lot of reactions and responses in various circles in Vietnam. Today’s workshop
is designed as a follow-up for that Hanoi conference.
This workshop could not have been made possible without generous support
from the Vietnam Ministry of Science and Technology and Saigon High-Tech
Park. I would also acknowledge the Minh Tran Corporation has provided thiswonderful place for us. It is indeed very nice that we can discuss the future ofscience and technology and industry of Asia in such a beautiful garden withthe great traditions of Vietnam.
And today we have invited leading figures in the administration, academia
and industry of Ho Chi Minh City. We have the presence of Mr. Truc,
President of Saigon High-Tech Park (SHTP). Mr. Nhan, Vice Mayor of Ho
Chi Minh City, is going to participate in the meeting from the reception. We
Part II-55

also have an honor of having Dr. Son, Vice President of Ho Chi Minh City
University of Technology.
Also, in addition to the presence of the discussants from the Hanoi meeting,
we have newly joined discussants from Thailand and India, Dr. Kitti and Dr.
Krishnan. I’m sure they will be able to have even more practical, specificdiscussions. We have interpreters prepared for Japanese to English andVietnamese to English, so that you can use both languages. Vietnamese andJapanese can also be spoken during the discussion. Now let’s start thediscussion and I’d like to introduce two facilitators, Dr. Ca and Dr. Sunami.
Thank you very much for your kind attention.
Dr. CaWell, I think Mr. Toshio Ban already introduced the key participants and letme just to follow the order of the program. May I take apology to introduce
Mr. Arimoto to have a speech?
Mr. Arimoto is a principal research scientist from an economic research
institute — Economic and Social Research Institute under the cabinet of theprime minister. Before that, he was the director of the science and technology
policy department under the Ministry of Science, Technology and Education(MEXT) of Japan.

2.2 Keynote Address of Mr. Tateo Arimoto
Thank you. My name is Tateo Arimoto. Thank you for giving me thisopportunity. I want to make a little bit introductory remarks. It’s my greathonor to open up this workshop on eco-technology in this beautiful and busy
city of HCM, a blend of tradition and modernity.
Last February the Honda Foundation and Vietnam’s National Institute for
Science and Technology Policy and Strategy Studies (NISTPASS) co-hosted
Part II-56

the symposium on “Innovation and Entrepreneurship for Developing
Countries” in Hanoi. In light of science and technology policy making, theHanoi symposium has become an important starting point to think aboutfurther development of Vietnam, Japan and the rest of Asian countries.
Today’s workshop in my understanding is meant to be a bridge between the
Hanoi meeting and its sequel scheduled for next year. In the next several
hours, we will discuss how Asia should advance from now and what type ofinnovation policies is required for secular growth. We will also talk about how
we can intensify coalitions in Asia for our prosperity. Before starting mydiscussions, I would like to thank Minh Tran Corporation, and welcome allparticipants from Vietnam, Thailand, India, and Japan.
Honda Foundation is an establishment funded by Mr. Soichiro Honda, one of
the most well-known entrepreneurs of postwar Japan. Consistently advocating
the concept of eco-technology, Honda Foundation has hosted conferences inmany countries to promote interactions and exchanges among researchers andexperts around the world. Honda’s mission is to help them build a‘compassionate’ civilization on the earth.
I believe it is an indispensable role of Asia to shift the paradigm of science andtechnology and make economic growth and environment protection
compatible. I hope, as well as am convinced, that today’s discussions would
serve late Soichiro Honda’s last wishes that are reflected in the concept of
eco-technology.
Aichi EXPO
From last spring to summer this year, Japanese government hosted the firstworld exposition in the 21st century in Aichi, Japan under the theme of“Nature’s Wisdom.” As you know, Aichi is a region where the nation’s
strongest economy is enjoyed right now, and the Aichi EXPO 2005 drew to avery successful close.
Part II-57

Many organizations from 121 countries, including Japanese government
institutes and private companies, gathered and the picture here shows theVietnam pavilion. Many people visited here and were strongly impressed by
the snapshots of Vietnamese everyday life, their efforts for modernization,and the scenic nature surrounding them.
Five years out, EXPO 2010 will take place in Shanghai, China. Chinese
government is making careful preparations. It is anticipated the Asia-Pacific,
including Vietnam, Thailand, and India, will achieve a remarkableadvancement in coming five years. I hope exhibitions by Asian countries in
EXPO 2010 will be further elevated and attract more people.
Change in Paradigm of Science and Technology
Science and technology in the 20th century have too much focused on the
production of knowledge, and lacked appropriate ways of its use andapplication. Although living standards of humanity at large have improved,
there is a multitude of the adverse legacies passed on to us; to name a few —deterioration of environment, depletion of resources and energy, North-Southgap, and spread of infectious diseases like AIDS and bird flu. A new paradigmof science and technology is required now.
In this light, the World Science Conference 1999’s Budapest Declaration, here,
lays out the basic commitment and direction of science and technology in the
21st century — better use, rather than mere production, of knowledge towardscience for peace, science for sustainable development, and science for society
at large. In other words, the declaration holds the world needs to harness thefunctions of science and technology for predicting, recognizing, andaddressing the serious challenges we do and could face in the future.
Let’s take a look at a statistics here. It shows how GDP per capita haschanged in East Asia and Sub-Saharan Africa for the past fifty years. In spiteof many adversities, East Asia’s growth at large looks great. Science andPart II-58

technology were no doubt the foundation for the green revolution to takeplace and for public health to improve. So the next challenge for East Asia is
how we sustain economic growth without harming our environment anymore.
However, the underdevelopment of Sub-Saharan Africa is still a chief worldconcern as the UK economic summit this year reminded us. It will be theresponsibilities of East Asia to use a half-century accumulation of knowledge
and experience for a better tomorrow of these African countries.
Importance of Capacity Building for Modernization
Japan is the only non-Western nation that succeeded in modernization at a
relatively early stage in the latter half of the 19th century. Looking back on
150 years after the Meiji Restoration, the speedy establishment of educationand S&T systems within the first few decades seems to be the chief engine forJapan’s success.
Meiji government first hired capable foreign experts from the West with asalary higher than Japanese ministers. It then sent many students abroad toEurope and US to absorb the advanced knowledge, technologies, andadministrative systems. Returnee students gradually replaced the foreign
experts and consolidated Japanese own systems of human resource
development, beginning in elementary schools and ending at the university
level. It took only thirty years (1986 to around 1900) for the Japan’s domestic
system of capacity building to complete and begin to produce world-classresearch findings and performances.
Excuse me, this is just in Japanese. An article of Asahi Shimbun, one of themost popular newspapers in Japan, mentioned yesterday about the Dong Du(Go East) movement. Just one hundred years ago Mr. Phan Boi Chau, who
was the most famous Vietnamese leaders of the revolution, had a farsighted,
wonderful plan to send about 200 students of politics to Japan, reflecting upon
its success in modernization through the enhancement of the education system.
Part II-59

So at the end of October, just two weeks ago in the city of Hue, located about
the middle of Vietnam, celebrated the anniversary ceremony thatcommemorates the Dong Du movement.
OK, going back to again my remark. Five years ago, InterAcademy Council(IAC), an aggregate of science academies around the world, was formed tocomply with world challenges by making scientific knowledge reflected inreal-world policies. Its first report was compiled and submitted to UN
secretary general Kofi Annan. In that report, “Inventing a Better Future: A
Strategy for Building Worldwide Capacities in Science and Technology,” IAC
stresses the importance of building a human resource development system as
the most important asset for developing countries to ride on the path toprosperity.
Development of Asia and Horizontal Division of Process
Japanese government’s Trade White Paper 2005 makes an extensive analysis
of factors to make current Asia’s advances possible. I find it very interesting
and let me show you an outline:•

For analysis, the White Paper divides production process in three
categories: supply of raw materials, manufacture of intermediate goods(parts and processed goods), and manufacture of final goods (capital andconsumption goods). Based on this classification and taking into accountdifferential factors like wage, expertise, and added value that vary bynation, the book compares Asian nations in 1995 with those in 2000 in lightof the internal structure used for industrial production. The paper shows
here a chart called “International Competitive Index.”•

In next slide, I want to show you another point of the paper. There iscurrently an established, and yet growing, economic framework in theworld with regard to trade of goods termed ‘triangular trade structure,’ inwhich Asia is the supplier using division of process and labor, and EU andPart II-60

US are the consumer of final goods. In Asia, Japan and NIEs (Korea,
Taiwan, Hong Kong, and Singapore) produce value-added parts andprocessed intermediate goods; and China and ASEAN nations importthese intermediate goods from which they assemble final capital andconsumer goods for EU and US. Of course, the factors and actors in thistriangular framework evolve dynamically year by year.
•

According to the paper, because the scale and scope of this triangulartrade keeps expanding, the East Asian economies enjoy continuous
growth. This is a virtuous cycle where local industries and businesses
enhance domestic demands and create greater investment opportunities.

In the wake of this structural dynamism, we need to consolidate our basis for
Asia’s sustainable development by strengthening human resource
development and industrial and S&T bases. In my opinion, these are win-win
relations, rather than zero-sum game. The countdown for the Asian market
integration has already begun.
Japanese New Approach — From S&T-Concentrated toward InnovationOriented Policy
The Japan’s new five-year program for S&T policies which will be effective
next year is finalized at the ministerial level. One of the main pillars of the
program is innovation initiatives probably because of the following
background:
The world has entered the period of mega-competition over the past fifteen
years after the end of cold war. Japan faces drastic changes in the structures ofpolitics, diplomacy, economy, society, and education. In terms of S&T areas,
Japan must substantially reform the education and R&D systems establishedin its 150 years of modernization, as it shifted from a catch-up player to afront-runner. One typical example of such reforms is the transition of national

Part II-61

universities to independent administrative corporations that was effective lastyear; and Science Council of Japan also underwent a full-scale reconstruction.
This is my final slide. In the century of intensely competitive market, Japan’s
population is falling. Transfer of foreign technologies is costly and likely to bea risk, rather than a merit, for shrinking labor. Our leaders then have chosen
to become more competitive and enhance goods and services of public
interest by spawning innovation after innovation. To do so requires thetransformation of the existing innovation systems into optimized,
comprehensive systems of creating, using, and managing knowledge andtechnology.
Such robust national innovation demands a radically new approach: theyrequire not only S&T strategies but also industrial policies complemented bymacroeconomic considerations, continued deregulations, reforms of rigidsocial institutes that cause low mobility of human resources and verticallydivided administrative functions, and improvements in various social
infrastructures.
In this context, we can see Japan as a precedent model for the Asia-wide
development in the making. We all need to build up a research network ofAsia that analyzes and evaluates innovation strategies and policies of eachnation so we can achieve harmonized advancement in the future.
Conclusion
I would like to close my speech by saying it is imperative for Vietnam,
Thailand, India, Japan and other nations in Asia to spawn innovations out ofeach people’s labor and association because it intensifies our competitive
advantages in the world as well as bringing political and social stability andpeace. Of course we Japanese will strive for stronger S&T coalitions and a
deeper complementary economy and the dynamism within the region. I hopePart II-62

such efforts will be accelerated by the current and future series of Honda’s
symposiums and workshops.
I want to explain this a bit more in this picture. So basic science is here;
curiosity-driven research is here; and from the stage of curiosity-driven
research, R&D advances into the creation of economic and public values; inother words, a path to innovation. In order to get final value, we need not only
economic values, but also social and public values, as well as intellectual andcultural values. So in the next Science and Technology Basic Policy Plan,
which will be effective as I said next year, we at the Japanese government
have revised the current systems of research support and emphasizedinvestments in areas that have greater social impacts. For example, we will
spend more money for more precise prediction of disasters and theirprevention. Focused investment is crucially important to drive the individual
phases of R&D to the common goal: to create final, combined value out of
economic, social and public values. This is the end of my remarks. Thank youvery much for your kind attention.

Dr. Ca:Thank you, Mr. Arimoto for your very far-reaching and interestingpresentation. May I introduce Mr. Pham Chanh Tuc, director of the Saigon
High-Tech Park Management Board.

2.3 Keynote Address of Mr. Pham Chanh TrucDistinguished guests from Japan and from other countries and from HCMC,
ladies and gentlemen, first of all, on behalf of the management board of the
Saigon High-Tech Park and the co-organizers of this workshop, I would liketo extend my warmest welcome to all of you distinguished guests,

Part II-63

distinguished scientists, managers and scholars from Honda Foundation for
coming to share your valuable experiences on the relationship between
technology, entrepreneurship and the eco-technology. This is a very topicalissue among developing countries including Vietnam and HCMC.
Distinguished guests, ladies and gentlemen, the Saigon High-Tech Park was
established by the Prime Minister of Vietnam three years ago with an aim tocreate a favorable environment for foreign direct investors, especially those
operating in the high-tech industry; namely, the R&D activity, the technology
transfer, the education and training of the high-tech workforces.
Being a developing country, we fully understand that the only way to increase
the technological capability is to enhance the competitiveness of our products
and services and through that contributing to the economic role of the country.
The only way is to enter into the high-tech industry by technologicalinnovation and by high-tech business incubation; and also, through this, that
we can bring about major changes for our country and our people. And it is afact that many Japanese entrepreneurs have been able to bring the changes toour country over the past decades and among them is Honda.
However, during the course of development, we have also felt the negative
impacts deprived on the unsustainable development on the environment, on
the ecology, on the human health, and on the overall quality of life of people;
and that makes us be cautious to the social economic development in the waythat we have to make it sustainable.
The government of Vietnam in general, the administration of HCMC and the
manager board of the Saigon High-Tech Park are always determined to see
the top priority of development is a sustainable development for thehappiness of our people and for the lovely planet.

Part II-64

Ladies and gentlemen, to achieve this goal, first we must have the rightunderstanding and the support from the entire society and the self disciplineof the entrepreneurs, the relentless effort by scientists and the bold andpredictable leadership of our government.
And I strongly believe that the information and the experiences shared during
this workshop will bring the clear insight to the issue of our interests. And
thanks to this helpful discussion, I believe that the administration of HCMC
and the management board of the Saigon High-Tech Park can set out the rightstrategy of development to make the Saigon High-Tech Park the firstadvanced high-tech park in Vietnam toward the development and for thepeople today and for the generation to come.
And I believe that with the notable mission of Honda Foundation and withthe hottest commitment from all of you, this workshop will be the first brick of
the foundation upon which the long term relationship between the Saigon
High-Tech Park and the Honda Foundation will be built.
Ladies and gentlemen, we can press assure that upon on the very firstfoundation that in the near future at the Saigon High-Tech Park, we can see
many activities organized by Honda Foundation. This is a clear demonstrationof the long term relationship between our two people for development of theexisting generation and the generations in the future. May I wish theworkshop a great success. Thank you.

Part II-65

2.4 Discussions
Dr. Sunami:
Thank you, we have planned to have a presentation by a SHTP official, butinstead we will have a presentation by Vice Director Dr. Nguyen Thanh Son.
He will give us an introductory remark on the…, I guess you can introduce us
something about the Ho Chi Minh City University of Technology?
Dr. Son:
OK. Good afternoon, everybody here. My name is Nguyen Thanh Son as thegentlemen introduced, and I’m Vice Director of HCMC University ofTechnology, which is one of the oldest universities in the southern part ofVietnam. It was established in 1957, so around forty-eight years ago. Recently
we have just celebrated 48th anniversary, the birthday of our university.
I come here on behalf of our director who is engaged today for businessactivities in Province An Giang, so that what I want to say is to convey the hisregard to everyone of you in this meeting; and, on the other hand, we would
like to say something about our university which pays a lot of contribution forhuman resource on enduring subject for industry and for society from thesouthern part of Vietnam, particularly so far dynamic city as HCMC.
Our university has 26,000 students who are divided into different education
system with 16,000 full-time students. That means they need to do four andhalf years of their study according to credit-based system. We are also the first
university in Vietnam using the credit-based system. Why we are doing creditbased system is just only that we want to integrate into the whole society ofeducation, for the first time with a Southeast Asian country, and later on withother universities of other countries all over the world. This is only the waythat we can bring our country, our economy up to the level of the Southeast
Asia and also for the whole nation.

Part II-66

We also pay a lot of contribution to providing the human resource for HCMC
for the southern part of Vietnam, practically for Mekong Delta. We also havearound 1.000 staff members — all of them are providing lectures; and we haveanother 500 staff members serving for other activities of our university. We
have totally eleven faculties — most of them are engineering faculties thatmeans we are focusing on engineering and technology.
And besides eleven universities, we also have one faculty which has recently
been established. That faculty is called the School of Industrial Management.
That also means that we are also aware how important the engineer weprovide for society, they need to have also the management knowledge so thatthey can pay their contribution to the society and to the industry.
Besides eleven faculty of engineering from electrical electronic engineering to
information technology, chemistry and mechanical engineering, etc., we also
have another eleven research centers. Those research centers play the keyrole as the gate way between the industry and the society with the scientist
working in our university. And I can offer, show a figure that every year we
get the budget for R&D 15 billion VND, but the contract which has beensigned via those research centers with industry is four to five times higher. So
you can imagine how those R&D research centers contribute to their activity
for society and industry.
We have very good connection with industry particularly nowadays goodconnection with high-tech parks, and some are industry zones because wethink our students can be evaluated good or bad only via industry. All thecompanies can evaluate our quality of education so that we make a lot ofeffort to do, to provide so the achievement which can be accepted by thegovernment. And now some of our students when they graduate, they havebeen accepted by the accredited, international organizations of education.

Part II-67

We also have some other collaborations with Southeast Asia partner
universities like Thailand, Malaysia, and recently we have very goodconnection with the partner universities in Japan like University of Tokyo orTokyo University of Technology, so that you can imagine how we develop andour university and all we have done is only to pay the best contribution for theindustry development and also the development of the country.
Besides the education research, we are also aware of the importance how tocollaborate relationship with other partner around the region and around theworld. We suppose that we in this meeting we just keep very brief
introduction of our university and we hope that for the development of ourcollaboration in this table need also a lot of contribution of university and wehope that we can pay contribution for that event. I hope that we will discuss
some more later on. Thank you for your attention.
Dr. Sunami:
Thank you very much, vice director. Now we open up the forward to thequestion for the presentation, introductory remarks by Mr. Arimoto and twoother’s remarks. Perhaps I can start. I have a very simple question about thehigh-tech park strategy in Vietnam. I guess what I have learnt is that you aretrying to develop two high-tech parks, one in north and one in south inVietnam. Is that right?
Dr. Ca:May I response to that and then may other people can ask. In general, as thenational level, we have two big high-tech parks: one is outside Hanoi, twokilometers away in the place called Hoa Lac. In fact that place is the feasibility
study for that high-tech park is prepared together with support from JICA
about nearly 10 years ago. And the second park is in HCMC. The two parks
are managed by different organizations: the one in the north is managed andPart II-68

supported by the Ministry of Science and Technology for the whole country.
The one in HCMC is under the HCMC Mayor People Committee.
Having said that, it does not necessarily mean we have only two high-techparks. These two high-tech parks are multifunctional; what I mean bymultifunctional is that they could have different zones or functions in the park
like incubators, like industrial production, high-tech bases, like R&D centers
and training activities and also some business services. But apart from that,
there are some smaller parks or may be they don’t call themselves high-techparks but actually they’re working in high-tech area like software center,
software zone, or electronic town, or different names. So this is much morenormal but in general it’s multifunctional.
Dr. Sunami:
Let me continue. The question I am going to ask is what would be acharacteristic of the two of national level…, the two multifunctional high-techparks you talked about. What are the distinctive features of them, I mean,
everything could be anything, you know? This morning we heard about the
Indian case where they focus on the service sector, a software type of hightech park where that didn’t necessarily involve the hardware, I mean, property
that was sort of a network type of high-tech park. It’s not necessarily a
traditional science park that we see around the world. And you are talking
about incubators, and you are talking about the R&D centers. So is there
anything that you are trying to do more specifically, theVietnamese strategy
or something by nature and I mean the one in HCMC is different fromothers?
Dr. Ca:Well, actually to response to this question, I need to refer a little bit to overall
high-tech strategy and policy in Vietnam. Actually the VietnamesePart II-69

government set up five areas or six; it depends on which documents you referto, so-called “priority areas” that you want to develop.
First the ICT: it could include hardware and software. By hardware I mean
you are producing PC or part of their electronic components; and then biotech
is one of the priority areas; automation and then advanced material, too.
Hopefully, something on nanotech can be done; and another area to bementioned more recently is mechatronics, which originally comes from Japan,
I think.
Having said that, actually there have not been many activities happening so
far in the park in the north. We mention a lot about high cost of clearing thesite and that process is a very long process, especially for the park in the north.
Because of that, up to now the park in the north got only one tenant. A
company from Japan begins to invest in that.
The park in the south under Mr. Truc management is much more successful.
Maybe they are more active or maybe the environment here in HCMC is
more suitable or more attractive for the investment. And I would say thestrategies adopted by the two parks are quite different. So here in HCMC, I
understand they’re going more for attracting first their industrial production
facilities and activities to build on that. So depending on the rate of success of
this park, other activities could follow — like incubators, and like R&D center.
I believe, in HCMC High-Tech Park, they have already begun to develop a
new incubator program and some plan for R&D. So maybe I’m not in theposition to talk about this park because there are a lot people here from thepark. They might say on that.
Mr. Truc:
I would like to make a comment to the answer provided by Dr. Ca that thetwo high-tech parks in Vietnam do share the same goals, but adopt different
methods. And the common goal shared by these two high-tech parks is first ofPart II-70

all to utilize the internal strength processed by the local scientists and theresearch circle in the country. However, the approaches adopted by the two
are different based on the different local condition. And for Saigon high-tech
Park, we have some following distinctive features:•First, the SHTP, or Saigon High-Tech Park, is a techno-economic zone
based on high-tech as approved by the prime minister government. And
that’s the reason why we have adopted the approach of first attracting theforeign direct investment, especially the enterprises operating in the hightech industry.

•

The second feature is that the SHTP is a multifunctional zone. It has the
production area for hardware and software as well as the high-techservices. And we pay special attention to training the workforce, training
for R&D activities as well as for production.

•

The third feature is that we provide the different mechanism of incentives
to attract different types of high-tech enterprises, based on the pioneeringhigh-tech industry set out by the central government. The industries that
we have been so far successful in attracting investment include theproduction of the short-circuit board and the ICT. We also pay attention
to the attraction of the investment in biotechnology. And in the near
future with our sistership with San Francisco city, we can attract morebiotechnological enterprises.

•

The last, and fourth distinctive feature of SHTP is that we create the park
an intellectual space where the scientists and the researchers can have avery comfortable and suitable environment for both living and working.
Thank Mr. Ca and Mr. Sunami for your question.

Dr. Ca:Part II-71

So maybe we want to have some more questions from the audience to ourspeaker from Saigon High-Tech Park or from HCMC University ofTechnology, which I believe is the main source to provide knowledge workers
for the park.
Dr. Son:Hello, can I say something? What I’ve just said is only about our university,
but as you know there are two Vietnam national universities — this is the newmodel of education in Vietnam. That means the government launched somekind of the way that they can push up for the education, particularly so far
high-technology.
So we moved into Vietnam National University of HCMC; and besides ouruniversity, there are also two other members. So not only our university but
the main university provides human resource for the industry, but we also
have one more university in HCMC.
And as you may realize each year around one million students, high school
pupils, they want to enter university but only 200 of them can enter into thestate university. So the government set up some policy to open more private
university so that the students have the chance to study there. I suppose thatin near future a lot of university will be created and set up so that not only ouruniversity but some other will provide graduation for the industry and also forthe society. That is just something I want to say.
Dr. Ca:Thank you, Dr. Son. So in the mean time it looks like that we may have somepresentation. While we wait for some more clear action, may I suggest that theaudience, you may want to have some question to the presentation of Mr.
Arimoto? Yes, please.
Speaker Not Identified:Part II-72

I have one question for Mr. Arimoto, and that’s in the new technologies which
are emerging now, like biotechnology and nanotechnology and so on. How isJapan trying to position itself in these industries and what has been the
progress so far?
Mr. Arimoto:As was said earlier, we are now in the new idea defined in the Science andTechnology Basic Plan. That plan includes people from our universities,
industries, and the government sectors; they come together to discuss about
the very important point you mention — how to integrate IT, NT, and BT inorder to get economic value or intellectual value out of them.
Of course these are separate disciplines, and the researchers separately makestudies in each laboratory. So we are now planning to integrate with help fromindustry. My picture is bottom-up, curiosity-driven researches mainly made by
the university. Our plan is not so much priority-driven, rather it includes
everything.
As I said, the bottom-up research coming to the next phase, — by next phase I
mean the basic technology, not the mission-oriented basic technology — inthat phase, individual private companies and university researchers get
together to build a platform of research. By the platform, I mean, for example,
the case of the university initiatives in the United States, large university
platforms like Stanford Bio-X; and other big research universities are now
setting up similar platforms.
So in the near future, next year, we are planning to set up several, larger
platforms for integrating IT, NT and BT using computer science. I cannot
directly make a response for you, but our understanding is these conversionsof rights should be integrated by government as well as industry initiatives;
and this is an important point. Main players are, of course, University ofTokyo and other big research universities, but AIST, or National Institute ofPart II-73

Advanced Industrial Science and Technology under the Ministry of Trade andCommerce as well as we, the National Institute of Physics and Chemistry willtake part in. AIST in particular will play a big role in this platform making.
Speaker Not Identified:
Maybe while people are preparing some questions, may I have one question
to Dr. Son from HCMC University of Technology? You may know thatrecently the Prime Minister visit to the U.S. They visited Harvard and otherMIT organization and one of the topics arisen is talking about the creation of
the so-called International Standard University in Vietnam, meaning that weneed some new kind of university which is a much higher standard than it isnow; if not Harvard, at least compared to other universities in the region.
And in relation to this, there are some discussions about how we are going todo that: one way is to create a total new institution, and another is to upgrade
an existing one. I wonder, can you give us some kind of thought or may becomment?
Dr. Son:
OK. Well, this is a sophisticated question and I’m thinking whether I’m theright person to answer that question because everyone here may know
education is some kind of long-term activity. What you have done today will
be effected so in five years or ten years later, but what the Prime Minister didin the United States, I suppose, he did the right thing. We can not go behindthe others because education is always the key factor for the development of asociety of industry, but I doubt for the time being that how we can implement
it. And as far as I know, if we want to bring your education to a standard level,
the first thing you need is to have the human resource or expertise. That is themost important thing. Though expertise can be provided in Vietnam, it may
take time.

Part II-74

But luckily, we have people living abroad. They left the country twenty years
ago for study, or before the war or right after the war; and they are all
expertise like Dung or Dr. Khe and other. If we provide a good policy so thatthey have a chance to come back and to be paid for their contribution, we canhave human resource. This is one part.
On the other hand, we also have to send people out to get the technology
which is always updated year after year, and I suppose that developed
countries like Japan can help us to provide those people; and then we willreach one for faster. It can be feasible for the latter.
And on the other hand, the government also has the new policy to invest for
the library, for the university, and for the lab, etc.. If you look into thepercentage of the national revenue, then you will realize the government isaware of this, and they will do it firmly. But I don’t believe that it can be done
within three or year years.
But we can not rely on this, but what we have here so far, we have to do it andkeep it going so that what we are doing now in our university is improving
step by step, using all the resource we have, using all the relationship we have,and using all the resources we have so far; and we hope that with the good
policy of the government, many universities like our universities will reach thestandard of education, at least equal to the around region universities. And I
think that is all I can answer your question. No more I can, sorry about that. I
suppose you accept mine.
Speaker Not Identified:Thank you, Dr. Son. I like the answer, thank you very much.
Dr. Sunami:
I just have one simple question, actually. As you know in China they havesome preferential policy to attract the scholars and overseas students in thePart II-75

United States or Europe to come back, and my question is to ask Dr. Son
about whether the HCMC University of Technology has such a preferential
policy or the mechanism in order to attract the foreign, American, overseas
Vietnamese scholars to come back and to work.
More specifically, for example, in Chinese university they have a different
income level from the local faculty members which create some kind oftension of course. If you come back from the United States, you earn several
times better income than other faculty members. Is there such a thing? Ordoes the government has this kind of policy to attract those overseas
Vietnamese scholars?
Dr. Son:OK, about income, it’s also one important factor. But on the other hand, we
also have our method, our way to improve our education quality by having
collaboration or setting up some joint program with other partner. For
example, at the moment we have a couple of joint venture with France, wecall the program PFE, Program for Excellent. The whole program will be
imported from the partner university, and they will be taught in Vietnameseby the people who graduated from France.
After graduation, students need to defend their thesis in the jury of mix of theexpertise from the French and Vietnamese universities; and when they pass
the exam or defend their thesis, they will be recognized by French education
system.
On the other hand, we also have other program: a joint program with Japan.
Tomorrow I will be meeting some representatives from a Japanese universityof technology, and talking about twinned accreditation program: a program
which can be accepted by both universities, and students accepted arerecognized as good students; and if such students want to join the program,

Part II-76

they can do so. And just by that way we can improve the quality of oureducation.
And one other factor, you said to do that we need also the budget. The
government now has launched some programs which help the student to getscholarship abroad. In this program called “VN 322,” if an applicant passes
the exam and fulfills all other conditions, he will be accepted by the partner
university and sent with the budget from the government to study in Japan,
Europe or wherever. It’s also the way we can improve our education quality.
Mr. Dung:
I think we go through the question of Dr. Sunami. He asked about, as I
understood, the policy of the Vietnamese government to the overseas student
or the overseas Vietnamese, is it right?
So I would love to introduce myself, also overseas Vietnamese. In my case I
have come back by myself, I was not waiting for the government policy. I
came back here just after the war, which means 1975. So I’m like the witnessof all the changes of the postwar Vietnam. I might discuss about my caselengthily later.
Here I would love to introduce two persons: One, Dr. Nguyen Chanh Khe,has come back from America and he was invited by the Saigon High-Tech
Park. He is now in charge of R&D center, the head of the R&D center of the
Saigon High-Tech Park. And here is Dr. Luong Bach Van, she has come back
here, too. She now has two faces: One is with the national front. She is thevice chairman of the national front. She will explain about that later. She isalso the president of a company of high-tech plastic. So maybe Dr. Nguyen
Chanh Khe and Dr. Van will discuss a little bit about this. Thank you.
Dr. Van:Part II-77

May I have some more information after the introduction of Mr. Dung? So as
mentioned in the introduction, I studied and graduated in France and I cameback in Vietnam just after the war in 1978. Since then I have made a lot oftechnology transfer for the plastic industry, and now I am in charge in the
Fatherland HCMC for the study how to create, or to facilitate, or to attract
Vietnamese intellectuals and Vietnamese overseas from outside. As you know,
actually we have about three million Vietnamese overseas all over the world.
Among them, 300,000 intellectuals are mostly in advanced countries such as
France or the United States. Actually we are organizing to study how tocreate conditions so that they can participate in the contribution to thedevelopment of Vietnam. Thank you.
Dr. Khe:Let me stand up and introduce myself. I’m Khe Nguyen and I came back fromthe United States. I have spent fourteen years in Japan and I got my PhD in
Tokyo Institute of Technology and since then I work in a high-tech firm inJapan for three years. I truly enjoyed working in the high-tech area in Japan. I
succeeded in the first invention in the photo-sensitive material utilizing thecoupler machine and this was just outstanding; and Kodak recruited me when
I gave my talk in Boston in the conference. And I migrated to work for
Eastman Kodak in the United States about four or five years in the researchlab.
I also had a great time to invent many, many new things there including
nanotechnology; and then Hewlett-Packard Corporation and Rico from Japan
also recruit me. So I migrated again to California and worked for HewlettPackard more than ten years while I did a lot of good work on the imaging
technology.
When I met the people from the Saigon High-Tech Park and I think that is agreat opportunity to come back and work for the country. So I decided toPart II-78

leave the United States; and today as a returnee from the United States, I am
working for the Saigon High-Tech Park at the R&D research lab. Within thethree years in the Saigon High-Tech Park, there are a lot of challenging things,
but I still keep the same pace that I have done in a research labs in Japan andthe United States.
We have made some development in fuel-cell technology that the Honda may
be interested in because, by use of fuel-cell technology, we don’t need to use
gasoline: we only use the proton exchanges with a few drops of water, we canhave energy. So in the future, Vietnam may have to contribute to the world
with the highest energy saving cars as well as some kind of nanotechnology.
I just have a really fun time in Vietnam because we don’t have everything — it
looks like we don’t have things available in Japan and the United States: wehave to create, we have to use all of our creativity to make the new thing
happen, and we were successfully to do that.
Like Dr. Son said, I work together with many students from his university,
help them and give them the idea how to be creative; how to work in anenvironment that we don’t have enough equipment like what we had in the
United States or in Japan. And now the students become more and moreinterested in their job, and I don’t need to push them anymore.
I just tell them, OK, what we need today is for the world tomorrow. So weneed to invent and we need to do more and more things, we have applied for
the United States pattern. So in the future we would like to bring thosetechnologies to the market; and we have to do that because the Japanese
school and also United States school have taught us how to bring thetechnology to meet with the need. If we don’t see the need from human being,
we will not be able to make an invention, and then it will not be useful for thehuman being. That’s all.

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Dr. Ca:Thank you, Dr. Van and Dr. Khe for very live sharing of your own
experiences. Is it time for us to have a short break?
Mr. Arimoto:I’d like to talk to Dr. Krishnan and some persons from Vietnam. In Japan,
Japanese central government is focusing upon nurturing the local sciencebased, knowledge-based, local industrial clusters. We are now supporting
more than ten local clusters. In that time, we are considering the integration ofindigenous, locally native technology and high-technology which are
generated from local universities, you know, to raise their internationallycompetitiveness, as we have many policies, actually measures about nurturing
the local cluster in that point aspect.
I can give you some of the example. As you know, Kyoto is a very old city inJapan but we have a lot of very competitive local industries there. Those
industries can integrate their old local native knowledge or traditional
technologies and high technologies.
Dr. Krishnan:
In some of the traditional industry, the government has tried to set up, forexample, design facilities in all areas where their traditional textile industry
has been strong. The government has set up a kind of textile, I don’t know
exactly what it’s called, a textile support center where they have computeraided design and some other testing and so on, to help upgrade local industry
so that they can compete on their traditional knowledge and also do hightechnology input into that.
Also in some of the traditional industries, the government has helped set upsome common facilities like an effluent treatment plant. Through that kind ofactivity, we can have a group of the firms in that industry that becomes morecompetitive. For example, while there are already existing clusters in thePart II-80

industries like leather and textiles, many of them are not willing to make theinvestment to make their process environmentally friendly. So thegovernment tries to support them by providing some common treatment
plants and other centralized facilities to help make these technology more
eco-friendly.
These are some of the kind of activities which the government has tried to do.
But generally I think there are a lot of scopes for further activity in this area
because there are many clusters. For example, we have some clusters inmachine tool industry or in the sports goods industry, where these clusters are
not performing well. They don’t have the right technology inputs and thegovernment has not been able to support those clusters sometimes. I thinkthey need a new mechanism, too. That’s where the government may need to
put money in.
But perhaps some private-public partnership need to be created to provide
those input because sometimes the government doesn’t have expertise either,even though it may want to do so. Maybe they can put the computers, but they
don’t have the right people to do training and nobody who is a really qualified
trainer may want to work for the government. He may prefer to actually being
an independent consultant. So there is a lot of interesting things in this area,
but I think there are a lot of scopes for further activities.
Dr. Ca:OK, thank you. Do you have any more questions? If not, may I suggest that
we have a short break? So can we be back here in about 15 minutes, until aquarter to four?
(Coffee Break)Dr. Ca:Part II-81

OK, can we continue our session? I think we have quite interesting discussion
and we touch upon quite a few ranges of issues so far.
To continue, may I introduce Dr. Uchida from Tokai University? He will havea presentation on the concept of eco technology, which is one of the key
concepts of this workshop. Please.

2.5 Presentation of Dr. Hirohisa UchidaThank you. My talk is about eco-technology. If you have proceedings of the
Hanoi symposium, please look at page 189. Part of my today talk is going on
this theme.
So what is eco technology? Actually as far as I understand, there are may be
two concepts: the first one is “ecology” plus “technology”. Most people may
think of this first. The second one is human-environment conscious
technology where “E” is for environment and “CO” for conscious. This is ecotechnology, and I think the second definition is a more general problem.
Anyway, independent of the first or second definition, the optimal goal iscommon.
Today I want to a little bit touch about first our science paradigm shift, andthen why we have to consider eco-technology. Please look at the typicalscience and technology paradigm of the 20th century. Actually science andtechnology are composed of three factors: “materials”, “energy”, and“information and communication.” For example, we use huge amount of fossil
fuel, this is material; we can covert fossil fuel to energy; and also we foundthat huge energy can be obtained out of a small change in the mass of uranium
or hydrogen. And this (fission of uranium) is actually what we apply to get
nuclear power energy.

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And another example is the history of material. We have used ceramic andmetal for a long, long time, but in the 20th century we found thesemiconductor and then we manufactured IC and LSI, and consequently cameup with computers. They are acting as a means of information andcommunication which is a very important factor nowadays.
On the other hand, there is a relationship between “energy” and “informationand communication.” To send information or signal, we need energy:
electromagnetic wave, electron, photon, or whatever. So actually we can
extend the use of these three factors of our science and technology paradigm.
Especially information technology has made a great progress. For example,
there are so many satellites going around the globe and we can observe
natural disasters, weather conditions, military actions, distributions oftemperature and desertification, and so on.
I’ll give you one more similar example. Please look at here: we can see a verythin layer here. This is our atmosphere. It’s only 10 km thick. Our globe has a
6,400 km radius, and only 10 km is our atmosphere. We can breathe now
that’s only 10 km; it means, if you imagine our globe as a ball with a diameterof 1.3 meter, you only have 1 mm thin layer as the atmosphere. What’s goingon when we receive 250 tons of carbons per second in this thin layer? Or inother words, 917 tons of CO2 per second is increasing in this thin layer. This isa really warning thought for our future.
Some American scientists are expecting maybe we are loosing 600 tons ofoxygen per second. This is a more terrible story if it is true, and theoretically
we have no oxygen more in 50,000 years, although no one knows about 50,000
years; and of course, when part of oxygen pressure would be lower, we could
not live anymore. This is a very serious problem.

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OK, this is one scene of the Tsunami attack in Thailand last December. In
Japan, our university (Tokai University), the University of Hawaii USA, andthe University of British Colombia Canada are cooperating to observe thetsunami movement from the Aleutian area to the Southern Pacific area, using
our remote sensing technology. Unfortunately this area, Indian sea, and thisarea, we don’t have any observation possibility. But now in Japan, we are justpreparing a new group to observe this area, and I don’t know how long it
takes, but I hope this group will be established as soon as possible; then we
can observe what happened in the big earthquake and how fast, and in which
direction the tsunami is going. We can observe from satellites its exact
movement. This is also as a result of the progress of information technology.
This is Hurricane Katrina that attacked New Orleans in 2005. Such weather
condition was a terrible situation. But at least we can forecast and warn
residents by using satellite pictures.
Now I come to what is environment. In this workshop 2, we use so many times
the word “environment,” but what exactly is the environment? I should say it
is not only components of nature such as air, water, plants and animals, but
any circumstances. Please look at any dictionary, it is stated that any
circumstance surrounding human that influences our growth and mentality isenvironment. The meaning of environment is so wide. For example, it may be
a family where you were born as a baby. The family is first environment forhim or her, and then school or the working places or market, culture, tradition,community, religion, country and economic and political system or your living
and human right, etc., etc.. So in this point, I should say, environment should
be said “human environment.” By doing so, we can understand more clearly
the meaning of environment.
This notion of environment becomes so important and it is going together
with changing science and technology paradigm. What is the trend and how?
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As we know exactly, we have many controversial issues such as cloning invitro fertilization, human embryo or human selection, and the definition ofbirth or death. In any time of history, we didn’t have such problems. For
example, what is the definition of human birth? Or what is the definition ofdeath? Once those things were very natural, you know. But nowadays with sohigh technology, for example, we don’t know exactly if he or she is dead or
not under a control of life prolonging medical treatment. The body looks very
nice but brain might be dead, but how we should say they are alive. OK, invitro fertilization, we can select certain eggs, and you put them back to themother, and then have a baby. But the rest of eggs, how can you treat them?
Everything depends on each culture or maybe sense of value in local areas?
This is a very complicated problem in dealing with human life, but we have tothink of it together with science and technology, because these advanced
techniques were brought by the progress of science and technology.
OK, we think of some progress in the development of robots. Maybe many
people want to have a robot. But what kinds of robot do you want to have? If
I have a robot at my home, he or she should react with my feeling. For
example, tomorrow we have some plan or schedule, and on next day I have nointention to go. I have fever, and I don’t want to go out, but the robot says
“you must go. This is your schedule”. In fact, I don’t want to have such a robot.
I want to have a robot, for example, he or she can feel almost the same way I
do. I am a human being and the robot is so rational. We are very irrational
and we can not live just according to logic. R&D of a robot with a capability
to understand irrational feelings of human beings are needed.
I should say I just compare conventional science and technology world withnew science and technology world. Actually the new science and technology
world should include human factor. In conventional science and technology,
in the name of rationality, or objectivity or universality, we have purposelyPart II-85

excluded human factor although it is very important. For a new science
paradigm, we should also incorporate irrationality or subjectivity, and it
depends on locality, culture and diversity of sense of values of us human. If wetransfer one new technology to Vietnam or Thailand or India, maybe the styleof technology transfer must be different according to each local area.
I want to show you one example of technology transfer based on ecotechnology. If we want to transfer a new technology, we should respect
directly local, human values, to which no technology can be universally
applied. You know, what is sustainability? If local people don’t want to have a
new technology, or if they don’t wish so, they can not maintain sustainability.
Sustainability exists where local people think it is good. The people want tomake it, and that’s it. Because of their sense of values in a local city, they canunderstand it and they can feel it well if they would have this new technology.
“Sustainability” can be maintained only when the local people feel well andget merits or profits with a new technology. In such a case, a new
introduced/transferred technology is harmonized with the local humanenvironment. This is very essential to realize an eco-technology and tomaintain a sustainable society.
We have so many words with “high-tech.” What’s high-tech? Nanotechnology,
or semiconductor technology? What is it? OK, if you want to have a new iPod,or new digital equipment, something made by high technology, but, as I told
you, each technology is associated with our daily life. But, in general,
universal application of new high technologies is not so easy. It depends oneach local culture and sense of value.
Innovation, productivity, development should be considered from anenvironment conscious viewpoint like LCA (Life Cycle Assessment). The lawof LCA is including a new concept of cost to prepare for a polluted
environment, although the traditional concept of cost has been the one ofPart II-86

production without consideration of environmental pollution, or humanenvironment. This morning I discussed about that. Even about a job in acompany, people think about the cost, and it almost always means only
production cost.
I still remember the impressive words of scientists of Daimler-Benz inGermany when I visited them in 1975. They had started the investigation ofhydrogen vehicles by hydrogen storage alloys. Daimler-Benz invested a hugeamount of research budget on the R&D of hydrogen vehicles. I asked them,“Why are you making such a technology research when you don’t know
exactly if such technology would realize or not?” Then they answered veryclearly that they knew exactly, in ten, twenty, or thirty years, the air or
environment would be polluted, and all automobile companies all over theworld would be required to pay monetary punishment. They should pay suchmoney to repair the polluted environment, but they cannot pay such a hugeamount of money. They calculated, then they preferred to paying now andmaking investments on such a research for an environmentally-friendly
technology; and this was a very clear answer at the time.
If you think of technology transfer, it should go eco-technologically — in a
way that diversity of local human environments and their intrinsic values arewell maintained; and this is very important.
In my own experience, for example, I’m contributing to the realization of asustainable society using hydrogen technology in Northern Europe as amember of a committee of the nations in that area. They have regularconferences on a project called NORSTORE. I’m just participating as arepresentative of Japan to these northern nations. This year we had a meetingin Iceland, last year in Norway, and next year we’ll have it in Denmark.
For example, in Iceland, it is clear that they want to operate many energy
systems using hydrogen: it’s OK, but how? That must be our goal. Iceland has
Part II-87

huge amounts of geothermal energy. They will use geothermal energy forhydrogen production and various hydrogen technologies. In this respect,hydrogen technology using geothermal energy in Iceland seems a niceexample where all local value, or human environment, is taken into account.
I’m also trying to introduce hydrogen technology into local cities in Japan. I’ll
explain a little bit about details of the story. This is the energy supply andconsumption states of Japan in 1975 to 1997 — twenty years of difference insituations. Of course it has changed very strongly because of increasing use of
nuclear power and natural gas. But please look at energy consumption. While
we can utilize 30 to 40 percent of supplied energy efficiently, we cannot do sofor the rest — 60 or 70 percent, that huge amount of energy, is gone away as
waste heat into surrounding air or waste water.
Then how can we utilize this waste heat? Saijo City is a very small city in
Ehime Prefecture of Shikoku, a southeast part of Japan, where we introducedhydrogen freezer technology. Why? Firstly, they have very nice ground water.
This water is one of the best in Japan. The local people are very proud of thisvery clean and nice water, and this water temperature is constant at 14 to 15
degrees Celsius throughout four seasons. If we apply this low temperature
heat source, and high heat temperature source over 100 degrees Celsius fromincinerators or industrial factories, we can drive hydrogen gas from onehydrogen storage alloy to another one. A hydrogen storage alloy releases heat
when it absorbs hydrogen. The storage alloy absorbs heat when it desorbs
hydrogen. Using these reversible chemical reactions, we can manufacturehydrogen freezers or refrigerators without use of Freon gas. We have actually
manufactured two parts of refrigerator: one part goes minus 30 degrees andanother goes from 0 to 5 degrees.
The local people in Saijo put many different types of food inside, fish or foodor anything, and they’re just for testing the freezing/refrigerating conditions.
Part II-88

What kind of reaction is going and how can value add to the local products?
The energy consumption is very low, around only 30 percent of theconventional type using Freon gas; of course, CO2 emission is also 30 percentof the conventional type. This is very environmentally friendly.
Another example for technology transfer is going for UNESCO. It has madethis manual of university-industry-government cooperation. I contributed also
as a co-editor and this manual was edited by Professor Aleksandra
Kornhauser of University of Ljubljana, Slovenia. Actually she was the Honda
prize recipient 1999. She is very active in this field and contributes both insideand outside of UNESCO since the innovation and entrepreneurship are
indispensable to developing countries to which UNESCO is contributing
much. The innovation and entrepreneurship movements should be made byuniversity-industry-government cooperation.
The content of the manual is very well organized. 17 different universities andenterprises contributed to compile this manual, and the content is about how
to make university-industry-government cooperation work and stresses therole of university and government is especially important for developing
countries.
As you mentioned earlier, educating or nurturing young people, not only that,
intellectual property and also knowledge or research result should betransferred to small-medium sized companies and they should grow up. In thismoment the government gives suited policy. This is of course a very difficult
point depending on each nation and area. But anyway UNESCO has alreadycompiled this one and I hope that you can obtain this manual even at present.
I could ask UNESCO to get them. They don’t sell it, but they just deliver thisbook.
The emphasis is made on the crucial role of university. The book states theuniversity should assist entrepreneur in small to medium size companies withPart II-89

experience, research and nurturing and training people, and of course here
I’ve just summarized the university-industry-government cooperation.
I myself was responsible for our university’s university-industry-government
cooperation for six years at Tokai University. According to my own data from1997 to 2002, we have made around 1,000 research contracts per year with thebudget around 20 million US dollars per year. What can university do? We do
basic research, seek and identify social needs. By nurturing people, we cancontribute to society and industry. The cooperation among academic,
industrial and governmental sectors can feedback some effect to education,and I find that this is very important for student education. The government inthis scheme should play a very important role.
OK, industry, for example, becomes successful with new intellectual property
or new technology. They can get more profit and give more tax. Government
gets more tax income. If the government gets more tax income, they could
give us more research budget and we can make further research. This could bea great idea but I don’t know exactly if it’s now working generally in Japan.
Anyway we have much experience in this relation among university, society or
industry, and government. The Japanese government is really taking care ofuniversities, and also the society and industry are using of this scheme, I
should say.
OK, this is also one example at our university. After my experience we haveso many different types of collaboration with the government and industry:from cultivation of shellfish or nanotechnology application to various fields
like nurturing Olympic athletes. Last year, to the Athens Olympic Games, wesent seven students as Olympic athletes from our university. We have many
experts in sports science field. And we are making projects concerning small
to medium sized companies.

Part II-90

This is only one application case using nanotechnology. This is from our result,and in combination with the city of Tokyo, we have already had a new solarwind energy storage system. These need huge energy storage, though a very
cheap one. But cheap storage does not have a good property. Then wedeveloped new nanotechnology using a ball milling technique. They run very
nice and one company cooperates with us, too.
OK, we have limited time. So I cannot give many other examples, but what is
important is eco-technology. We have to think so many things if we think offactors surrounding us. So each nation, each country has its own problems andenvironmental issues. Therefore, if we apply new technology or if we think
about innovation, it must be different according to places, nations and regions.
The Honda Foundation philosophy that I introduce to you is the philosophyof eco-technology making science and technology safer, and the Honda
Foundation will perhaps further cooperation within our Asian area. Thankyou very much.

2.6 Q&A Session with Dr. Uchida
Dr. Ca:Thank you, Dr. Uchida. I suggest we should have about ten minutes or so forquestions from the audience about the presentation.
Question:
Dr. Uchida, I have one question. Can you explain a little bit about the ball
milling process electric power equipment? The third one about the concept(last one)
Dr. Uchida’s Answer:
If we look for a cheap hydrogen storage technology, the iron-titanium
intermetallic compound is a good candidate. This may be the oldest one, but
Part II-91

very cheap. So we decided to use iron-titanium as a compound, but this alloy
has a very big problem. If you put the alloy and let it exposed to hydrogen gas,
it cannot react to hydrogen gas at room temperature. But usually otherhydrogen storage alloys react very quickly. The alloy can react with hydrogengas at room temperature if the surface is clean. But the surface of the irontitanium is covered with oxide layers. The hydrogen molecules cannot
dissociate on the oxide surface. We changed micro structure of the surface
using ball milling. We manufactured the nanostructure outside and inside andwe realize a very nice kinetics takes place, and we can utilize such practicalalloy. We made two patterns for that, this may be too scientific, but that was
the story.
Question:
So you use the ball milling processes to produce nanoparticles and then fromthe nanoparticles to change the property from the conventional…
Dr. Uchida’s Answer:
Yes.
Dr. Ca:Any other question, please?
Question:
I would like to have a question. I really like one slide in your presentation. It’s
about the linkage of the three players — university, industry and government.
I think in Vietnam, we have all of these three players. However, there isshortage in the linkage between university and industry. So in developed
countries, it’s very clear about this connection about between these twoplayers. However unfortunately in Vietnam, we have not had that link-up yet.
So you need experience and the experiences you have in Japan and othercountries, how do you create these kind of link-up given the constraints, thelimit that Vietnam especially the Vietnamese government now has?
Part II-92

Dr. Uchida’s Answer:
I understand your question. Of course it’s not easy to establish a relation
between university and the industry. For example, if you are working in auniversity and just remain sitting in university, nobody comes to you. You
should go out outside the campus and visit different industries; and of course
you must be nurturing young people in the industry and nurturing contacts
and so on. For this relation, university teachers should go out of campus. Thisis the very important factor I should say, but even in Japan many university
teachers still think they just remain and the industry should come to us.
Nobody comes. And this is very important especially in technological field,
you should go there and you should see what is going on.
For example, you have a very similar problem from 5 different companies but
each company has its own problem. You cannot solve generally. Every case
you should check and go and look and of course this is a very big work. I think
this is a very important first step to realize this relation; and industry people
can also observe how university professors behave, and see if they can trustthem or not, and so on. These are very sensitive things.
I should say there is no model. Maybe the model is the teachers should go
here and check; but not only that. Of course the role of the government is very
important. For some in Vietnam, I suppose, you also have to build
connections here; and of course the government makes administrative support
to industry and sometimes you can call industry people. The government ismaking such a support. OK, let’s try to use this system together. Then
someday it may go well.
Mr. Dung:
I think it’s a very good question from Mr.An and actually this topic I havedone research for the last three years in Vietnam, and they found all the
problems in Vietnam. We have the players but we don’t have the linkage.
Part II-93

Actually this is one of the issues that the Japanese side should think seriously
even for the ODA program or whatever because I think it is very sad that thislinkage is not as strong here compared to Japan. I must say this is a very
typical Japanese type of development, but this kind of know-how, this kind ofexperience was not transferred to Vietnam.
I think, during this session, maybe Dr. Ca or Dr. Son, because they are here in
Vietnam, that the government gives the budget to the university. Universities
do their own research that is not, or very little, in relation with the industry or
whatever in the society. I think the case of the Technology University of
HCMC is one of the best in Vietnam because I found they’ve got the budget
also from the private sector. They earn on their own research projects muchmore, five times greater, than the budget from the government. That’s very
unique in HCMC. That’s not for all other universities. But I think five, is it
enough? I don’t think so. I think the Technology University of HCMC shouldhave 500 times. It’s not five, five is too little.
They think that maybe Honda Foundation or universities in Japan should help
to clear this kind of linkage program. I think that, and, in this case, I would
love to propose this topic in our session very important because, actually in
my company here, we do the research, we do the production, we do thetraining ourselves to show the government this is the case because here we dothe high-tech production. I ask the government, where can you supply for me?
No one can supply unless you do it by yourself. I think here is the example,
and I think it’s not in the economic field, but I think here this kind ofworkshop and we exchange the experience; and that helps each other to havethis linkage. Thank you.
Dr. Uchida:
Thank you. I want to make one remark on this theme. I didn’t say the linkage
is only about high-tech; low tech is also the focus. Industry can ask university.
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This is very important, or should I say, the question receiving everyday. It’s
mostly low tech. It is a model. We can solve it with our experience, very easy,
no problem.
For example, one company comes to us. They cannot pay even 1000 dollars or
500 dollars per year, a very small company. It doesn’t matter. We areconscious of this kind of company and say, “In the future please come once
again.” We hope this company grows, really. I think this is very important.
“You don’t have money, then we can’t have any time for you” — we won’t say
that. Actually, at university we should accept any question, any issue fromsociety. This is very important not only for technology but also for otherfields.
Mr. Dung:
May I comment a bit? Last August the government asked about 60
Vietnamese overseas students to come back here in Hanoi, and we had asession. As I said, we discussed about science and technology; and they asked
us, “What is our aim?” If there is a development process — phase one, phasetwo, and phase three, then I think for Vietnam we should serve the phase one
first.
I’ll give you an example. In Vietnam we now export 4 million tons of rice tothe world; we are the second largest exporter just after Thai with the priceonly 250 dollars per ton. I say, if we go into high-tech, how much we could getfrom that; but if we increase the price by hundred dollars per ton, then how
much can we get from that? I think the question why the price of Vietnam isso low.
We need to research, but for me I give a very direct answer: it is because of
the quality of the rice. So if it is because the quality of rice production, thenhere is the role of science and technology. They can help us improve thequality immediately, and that can give a lot of budget for research forPart II-95

Vietnam for anything. Now for the case in Vietnam we promote one because
we can not ask the government to provide the linkage. We can not ask theindustry to provide the linkage. We cannot ask the university, either.
I think that we need to interfaces for the Vietnamese case. We need tointerfaces from the three sectors: scientific people, managers from industry,
and the government as a team. Actually I propose this to Japan. The Japanese
government should think very careful about the role of the interface, I think,to help the three united, to do the job. Thank you.
Dr. Uchida:
You’re right. We need to have a coordinator. For example, if our university
has one issue from outside, and our coordinator meets the person fromoutside. If this person wants to make this to, say, Professor A, and if we know
exactly Professor A’s character and he is not the best person for this particular
problem, then we switch Professor A to another professor and so on. You
need a coordinator. This problem may be for University A, this problem for
University B and so on. We can arrange it. This is very important as you say.
Dr. Ca:I think Nakajima-san wants to have some words.
Mr. Nakajima:
Right, I heard you mentioned the name METI. Please allow me to share mythought about the role of METI in connection with the current topic.
Actually we at METI have been on the discussion of the contact between
academia and private sector. When Japan was in the development phase, theadministration played the major role.
You have talked about the platform, and actually up to 1980s, theadministration, I mean, the government played major role. In other words, thenational government always tried to gather people from industry, fromPart II-96

university, from the media, from banking business as well as consumer groups
so that they can come up with a certain program or project. Through this kindof meeting, collaborations between the industry and academia were madepossible. The government really helped establish relationships, and such
relationships were translated into business or private connections amongpeople, if that was not everything intended. In those days, I believe this kindof the government played a great function.
However, the function of the government which used to be very large is notreally functioning to that level recently, due partially to the huge flux of
information, because every sector has to manage and protect its own
information, as deregulations go on. Thank you.
Dr. Ca:I think Dr. Son may want to have some question.
Dr. Son:
OK, I would like to say something on the head to the problem: the issue of thelinkage between university and industrial society in Vietnam.
I have been working for university for almost twenty-five years and in thesame university of technology, and I know that I realize how the linkage has
been set up or developed in Vietnam. But we have to specify exactly thefunctionality of university: what they are doing and what they have to provide
for society.
According to my knowledge, university provides human resource for thesociety and they provide only knowledge for graduation as a foundation oftechnique, of technology and science. The demand in the society is not only inindustry but also in academic institution or other university and it is a wide
range so that what the university can do is providing the knowledge for the
student with the foundation of science, that’s all. OK? This is one thing.

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Now what the industrial society expects from those outcomes is quite different
from twenty or thirty years ago when technology was quite reasonably low
and not so fast. Companies in those days trained the graduates coming fromuniversity for at least six months or one year, or even two years before they
can work in the industry. But now the industry is very competitive, andcompanies always want to cut down the cost. You don’t want to train the newgraduates anymore because, if you train them, you know maybe othercompany will take them over with a higher salary. Then why should you train
those people? So I always ask university to do something about this. This is
one thing you have to consider, the fairness. OK?
And what have we done so far? We have provided human resource for thesociety. But the industry needs to be also responsible. They need to pay
contribution somehow by updating those people with newer technologies. In
university we don’t have a sufficient budget to purchase such technologies forthat purpose. Also, the budget from the government is enough only forproviding the foundation of science. This is functionality one.
The university’s second functionality is research and technology transfer
about which we are talking now. I think these have something more to do withlinkage. In Vietnam the most important thing is that there is no linkage. No, it
exists but we don’t know how to manage the linkage so that the whole system
can be kept sustainable. That means I do research, I get the achievement, but
I don’t know how I can sell it to the industry. Industry doesn’t know how they
can buy it and get the feedback. That is the problem in Vietnam, andparticularly in association with the intellectual property laws. And if these
problems are solved thoroughly, I suppose that we become to be able tomanage those linkages. For example, if we go and sign a contract with a hightech Japanese company, what they have to do at the very beginning is to writePart II-98

out clearly about the intellectual property first before we go to next step forthe linkage between sciences. So I think it should be considered.
Dr. Uchida:
I want to make remark on this linkage. Actually university is not a researchdevelopment department of a company, you know; what we can do is limited
to basic science research, etc.. Of course we have very nice experiences. Big
industry knows exactly what university can do. They come to us, what they ask
for is easy, they take a transmission electron microscope or at least ask toanalyze components, it is very easy.
But more of the problem lies in the small industry. They don’t know what
university can do, and when they come to us, they at the first stage ask us
things as if we are a R&D department for them. We cannot make it. OK, we
can analyze your problem, we divide it into different stages, but this is the endof what we can do for them. We discuss further about the problems and could
solve some of them, but we can not receive just a simple request to do
development of a commercial product because it’s not possible, you know.
This is a very important step as university since university is not adevelopment sector of a company. Otherwise, the cooperation between
university and industry doesn’t work.
And the budget matters. Of course we ask a company for research as theirown task. But, as I told you, each company has its own problem, condition,and so on. We may ask the company how much you can pay for this. Of
course we do our best; we make a service because doing so is very important.
But we cannot say it costs one million dollars. We never say that. We consider
at first stage how we can try to solve an issue from a company. This is an
important point. Then we classify the issue to elementary tasks, and we decide
our directions how we should or we could solve or approach to this issue. In
every step, we have to meet and talk each other with the industry people. In
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the meantime, we can establish trust with the industry people. This is
everything I could say: then they can go further. Maybe I feel this because I
am working at a private university. This attitude may be different from anational university.
Speaker Not Identified:
I am glad to talk about the barrier of the linkage between university andsociety or industry. If the university is to play as a teaching university, I feelthat it is not a good point. But if the industry is to play as a manufacturer, it
would be best. In this case, industry- university linkage is very difficult. But if
university is to play as a research university and the company as a generator of
new solutions and key technologies, industry-university linkage is a possibility.
However, even then, if you take a look at the parameter, the industry needs afast and quick response, but university solution may be very slow.
The next one is the intellectual property, IP, in Thailand. I face a lot of
problems. Everything starts very good, but finally we are shut down by the IP.
And also the trust between university and industry, this is still a problem. So
technology transfer from some big company may be not a big deal, but this isa point of issue, thank you.
Dr. Uchida:
Even as a teaching university I think we have a high possibility to link withsociety. In Japan, for example, in each local area there is teaching colleges oruniversities. They hold small seminars of history of local area or some
economics and so on, so they can collect many people living there. I think thisis also a very important linkage of university to the society. Not only
technology. We can ask the local university to work together for its local or
larger society. Of course, research universities could have more money. But asa teaching university, you can plan quite a new project and this is what you
can do with people there.
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2.7 Closing Remarks
Dr. Ca:I was a bit concerned from the beginning about not hearing any questions. I
did not expect so many questions coming up, showing great interests ofeveryone in this topic of three way linkage between industry and university. I
don’t know if there are any more questions? I see no hands up, so I assume
that we may need to wrap it up here. Before we close, I just wonder, Sunamisan, do you want to have some words?
Dr. Sunami:
I think we do have very great interest in this topic of how to support ecotechnological innovation by designing a university-industry-government
linkage. I think we should not narrow the definition of linkage as technology
transfer. I think this great interest in expanding linkage requires a broader
view of the role of university, the role of academic conferences, the role ofpublic research institutes; I mean, all these things are interrelated to thecreation of very broader and very important connections between thegovernment and university education system and industry.
Perhaps we can discuss this as one of the key theme for the next conference
next year, and I like to thank all the participants…, oh, and also another thing
I thought interesting to see is the people who came back from United States
or Japan to Vietnam. This international movement of human resource is aninteresting phenomenon and has something to do with innovation and catchup. So we can also talk about mobilization of human resources in science andtechnology in general. It could be another topic for the next year as well.

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So I’d like to thank the participants for providing a lot of very interestingquestions and I think we have reached some kind of common ground intalking about this for the next conference. Thanks.
Dr. Ca:Thank you, Sunami-san. May I have the honor to announce that thisafternoon workshop is successfully closed? Thank you very much, everyone.
(End of Afternoon Session)

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