THE STRATEGIC ALLIANCE BETWEEN SUNGKYUNKWAN UNIVERSITY AND THE SAMSUNG GROUP: SOUTH KOREAN EXCEPTIONALISM OR NEW GLOBAL MODEL?

Pieter StekPIETER STEK
Doctoral Student
Delft University of Technology
The Netherlands
*email address protected*

 

 

ABSTRACT

University-industry alliances are nothing new, examples abound of leading universities establishing partnerships with key industry partners for mutual benefit. However, in South Korea the concept has been taken to an entirely new level: there a major comprehensive university, Sungkyunkwan University (SKKU), has entered into a broad alliance that goes far beyond research and education, with one of the nation’s leading business conglomerates, the Samsung Group.

In this brief contribution the recent history and structure of the alliance is discussed, leading to the question: can this kind of strategic alliance be replicated elsewhere in the world? Or is it a uniquely South Korean phenomenon?

UNIQUE ORIGIN

Sungkyunkwan University (SKKU) is in many ways as traditional and historic as an institute of higher education can be. Founded in 1398, two years after Seoul became the capital of Korea’s Joseon dynasty, the institution was the intellectual home of the dynasty’s greatest philosophers, including Yi Hwang and Yi I (Yul Gok). This legacy was inherited when a modern university was founded at the site of the ancient university in 1946.

For decades after its re-founding, SKKU, Korea’s royal university, struggled to retain its former prominence in the new republic. While it continued to be a leading institution of higher learning, it remained in the shadows of South Korea’s academic community.
This started to change in 1996 when the Samsung Group re-initiated its links with SKKU. The corporation and the university had a partnership from 1965-1977, which was eventually terminated. But in the early 1990s, a clear strategic imperative presented itself for what would soon develop into a deep and broad strategic alliance.

The Samsung Group is South Korea’s largest conglomerate and it includes the world’s largest technology firm, Samsung Electronics. But the Samsung Group’s activities in the Korean economy span many industries, including insurance, finance, construction, property development, software, chemicals, heavy industries, and hospitality. Samsung even owns a theme park business called Everland.
The Samsung Group saw an emerging strategic opportunity in the medical field, and wanted to setup the Samsung Medical Center (SMC). It was thus in need of both top-notch human resources and research capabilities to support innovation. While partnering with one of the large medical schools in Seoul was an option, SMC would be in direct competition with the city’s large university hospitals, creating a conflict of interest. SMC would become a key part of Samsung’s medical technology strategy, also serving as a living lab for its electronics and life sciences divisions.

At the same time, SKKU was keen to establish a medical school as part of its strategic development. But SKKU offered more. In 1978 it had moved its sciences and engineering departments out of central Seoul to Suwon, a smaller city one hour to the south. Suwon, coincidentally, is also the traditional base of the Samsung Group. Informal contacts between SKKU’s and Samsung’s researchers in Suwon were already established when plans for a strategic alliance transpired in the early 1990s.
This meeting of strategic objectives and existing personal contacts laid the groundwork for a formal alliance between Samsung and SKKU, which would involve Samsung gaining significant control over the management of the university, in exchange for large-scale investments, starting with the medical school.

The success of this strategy for both parties seems to speak for itself. Samsung continues to thrive in some of the world’s most competitive high-tech industries, hiring large numbers of graduates from SKKU and collaborating closely in various areas of research with the university. SKKU, for its part, has made a rapid ascent in the university rankings, placing it among the top 150 universities worldwide, and among the top twenty in Asia.

SAMSUNG’S INVOLVEMENT

Samsung is a group with an often all-encompassing corporate culture, the “Samsung system”. While subsidiaries can operate quite independently, they are also part of the larger corporate group, and many inter-linkages exist. Herein SKKU’s relationship with Samsung is no exception.
Samsung’s participation in the university’s management started with the secondment of some key management staff, including the chairman of the board of directors, and the development of a clear strategic plan for the university. Supported by experts from the Samsung Economic Research Institute (SERI), the university developed a strategic vision with Samsung, aimed at identifying key areas of common interest. In addition to medical research and education, nanotechnology was identified as one such area. And so in 2005 the Sungkyunkwan Advanced Institute of Nano Technology (SAINT) was established, with support from the Samsung Advanced Institute of Technology (SAIT).

Strategically much of the development of SKKU now parallels Samsung. For instance, Samsung’s acquisition of ultrasound machine maker Medison in 2010 was followed by the founding of SKKU’s Graduate School of Health Sciences and Technology and the Samsung Advanced Institute of Health Sciences and Technology (SAIHST). SKKU’s newly formed Graduate School of Business is another example, grooming several of Samsung’s top graduates and middle managers for global leadership roles.

The main gain of such a strategic alignment is perhaps that it facilitates mobility of students and researchers. It allows Samsung to pull in students and researchers from SKKU. The students’ curriculum is tailored to Samsung’s needs, thus saving significantly on training, both in terms of time and money. Samsung makes available generous scholarships and job guarantees to attract the best and brightest students in the areas where it needs them.

In the other direction, many top researchers whose research interests may no longer align with those of Samsung, or who need a “cooling off” period after being involved in highly sensitive research before leaving Samsung, find a place at SKKU. These individuals form bridges between the university and the group, further supporting their collaboration. As a result, whenever Samsung is looking to pioneer a new collaboration project or industry-tailored course, it often perfects this at SKKU before replicating it at other universities.
Beyond this, SKKU and Samsung are able to coordinate their investments in research and education over long periods of time. The use of technology road maps is quite common in South Korea as an industrial policy tool, and the Samsung-SKKU collaboration is likely to have a similarly long-term investment horizon, spanning several decades. The emerging global Samsung-SKKU leadership in graphene-related technologies comes to mind as one example of such a strategy.

Samsung’s strong position on SKKU’s board, and multiple channels of collaboration, also facilitates the rapid creation and scaling-up of specific research and education programs to meet Samsung’s changing needs. Typically a new academic department can be setup in a matter of months. Samsung might provide much of the financing and some key staff, but the execution is ultimately left to the university. The rapid opening and occasional restructuring of departments, while highly political at most universities, appears to have become a relatively smooth process.

Despite this co-dependency, neither Samsung nor SKKU are exclusive to each other. Samsung actively collaborates with universities around the world, including in Europe and the United States, where it actively seeks out new technologies and partners. SKKU for its part takes on research projects from a wide variety of non-Samsung affiliated parties, including large foreign multinationals such as Germany’s BASF, and Japan’s Chugai Pharmaceuticals.

Engagement with Samsung has made SKKU a more “entrepreneurial university”1, professionalizing its administration and research management. This is probably one factor in its recent success in attracting funds from the non-Samsung private sector, and a range of government research grants from Korea’s National Research Foundation, including hosting two labs of the prestigious and newly established Institute of Basic Sciences (IBS).

But make no mistake about the extent of Samsung’s involvement in the university’s management. For example, SKKU is part of Samsung’s human resources system, and all new long-term contracted administrative staff are required to pass the Samsung Standardised Aptitude Test (SSAT) before they can be hired, just like potential candidates at other Samsung group companies. Much of the equipment at the university – laptops, computers, and software – is supplied by Samsung, as is university catering – provided by Everland, Samsung’s theme-park division. There are dozens of other links, some clearly visible, others less so.

The involvement of Samsung in SKKU has generally gone smoothly, although at the beginning of the partnership there was criticism from students and faculty, and even protests and sit-ins. That criticism has largely abated and the “Samsung factor” is now seen as a boon by most students, faculty and alumni. Furthermore, not all of the university has been equally affected by Samsung’s involvement. The university has programs in areas such as modern dance, philosophy, and fine art, where the Samsung connection is naturally weaker, or even non-existent.

UNIQUE FUTURE OR GLOBAL FUTURE?

There are a great number of cultural differences between the worlds of business and academia2, and this alone makes the SKKU-Samsung alliance a noteworthy success story. The fact that Samsung is closely involved in strategic decision-making about research and education is certainly unusual for a university, and in that sense SKKU, as a whole, has become a hybridized institution3 that, through a range of formal and informal institutional innovations, is better able to facilitate university-industry collaboration. From that perspective it has indeed become an “entrepreneurial university”4.

But is this alliance model replicable? There are certainly a number of unique features to the SKKU-Samsung arrangement:
1. There was a clear strategic imperative for both institutions that brought them together: the desire to create a medical school.
2. The alliance went beyond the “joint venture” approach; Samsung has an actual vote in SKKU and has effectively become a major, if not majority, shareholder.
3. Collaboration occurs through many channels, ranging from
injections of funds for research, consultation on the curriculum, scholarships, student selection, and the secondment of key Samsung staff.
4. SKKU and Samsung are located close together; both use Suwon as an important research center, facilitating interpersonal links.
5. SKKU is a comprehensive university and Samsung a highly diversified multi-industry conglomerate creating broad areas for collaboration; while diversified multi-industry conglomerates are rare in developed economies, they tend to have a strong presence in developing and recently developed economies.
6. Samsung is a highly research-intensive conglomerate with a research budget that exceeds $10 billion, the world’s second-largest in 20135.

The likelihood of all of these factors aligning is small. Strategic imperatives do not necessarily occur at the same time, but there are other historical examples of them doing so. Lockheed’s involvement in the development of Stanford University’s aerospace department comes to mind as an example.

Universities may not wish to accept, or be legally prevented from accepting, a dominant corporate stakeholder. However, governments could develop incentives and legislation to encourage or simply allow the corporate takeover of a university.
However, the alliances might be on a smaller scale. Few universities will have a single conglomerate as their partner, and might instead continue to deal with several important corporate stakeholders. This in itself might interfere with long-term planning, which is one of the likely strengths of the SKKU-Samsung alliance.

And very few conglomerates can match the depth and scale of Samsung’s R&D efforts, which is undoubtedly a factor in its ability and willingness to deeply and broadly involve itself with SKKU.

For all these reasons the SKKU-Samsung model is unique. But in itself corporate involvement in universities is not unique. In South Korea there is also Postech (linked to Posco Steel); Malaysia has Universiti Teknologi Petronas (UTP, linked to the national petroleum company); and Turkey has Sabanci University (linked to the conglomerate with the same name). All of these follow different models. While Postech was setup by Posco Steel, Posco’s involvement has lessened to the point of Postech now being independent of Posco. UTP is a fully owned subsidiary incorporated as a limited liability company. Sabanci University is primarily a philanthropic endeavour.

So instead of a single model, there appear to be several models worldwide. The SKKU-Samsung alliance may well be a case of global exceptionalism, but it certainly appears to be part of a global trend.

AUTHOR

Pieter E Stek was formerly External Relations Manager at the Office of International Affairs of Sungkyunkwan University in Seoul, South Korea. He is currently an independent Seoul-based scholar, who is pursuing a doctorate at the Faculty of Technology, Policy and Management at Delft University of Technology (Netherlands), and lectures at Myongji University and Yeungnam University in South Korea. He is a consultant to the Asia, Middle East, and Africa regional office of QS Quacquarelli Symonds in Singapore, and holds Master degrees in Civil Engineering and Management and in International Cooperation from, respectively, the University of Twente (Netherlands) and Yonsei University (South Korea).

1 Myung-Hwan Cho (2014) Technological catch-up and the role of universities: South Korea’s innovation-based growth explained through the Corporate Helix model, Triple Helix 1, 2.
2 T Bjerregaard (2010) Industry and academia in convergence: micro-institutional dimensions of R&D collaboration, Technovation 30, 2: 100-108.
3 M Ranga and H Etzkowitz (2013) Triple Helix systems: an analytical framework for innovation policy and practice in the knowledge society, Industry and Higher
Education 27, 4: 237-262.
4 Myung-Hwan Cho (2014), cited earlier.
5 Booz and Company