Development of innovation cluster in Mongolia for ICT sector /role of High education system/

1. Development of innovation cluster in Mongolia for ICT sector
/role of High education system/
N.Munkhuu*, B.Tsetsgee*, T.Narantuya†
* SICT MUST, Ulaanbaatar, Mongolia
†
CSMS MUST, Ulaanbaatar, Mongolia
*
munkhuu@sict.edu.mn
Abstract: This paper examines the role of regional clusters in
regional entrepreneurship. We focus on the distinct influences
on growth in the number of start-up firms as well as in
employment in these new firms in a given region-industry.
Mongolian government has approved several policy documents
to enhance national capacity building. Within the framework of
these policy documents, some efforts have been made at initial
level from creating legal environment for science and
technology oriented activities. The National Development
Policy and Action plan of Government of Mongolia specified
implementation of different large scale projects, such as hightech innovation cluster for ICT (Silicon Valley) and other
sector, launching of national industry, improving capacities of
human resources, which can be implemented together and in
cooperation with different organizations. Concept of developing
innovation cluster in Mongolia aimed to build a knowledge
driven society to enhance living standards of Mongolian people.
†
tsetsgee@sict.edu.mn
It is very important for information and
communication sector to intensify its development, to
strengthen its position in society and economy and to
increase its contribution to the country through
harmonizing activities of universities, institutes, research
organizations, National Information Technology Park,
small and medium sized enterprises and companies, which
have an effective cooperation and good introduction of
innovation.
Therefore according to the initiative of the
Information, Communications Technology and Post
Authority (ICTPA), the research works to make a model
for developing a high technology of information and
communications based on a partnership of the state,
universities, institutes and private sector, are started.
So, we prepared paper in purpose to define the role
of higher education institutions for establishing ICT
cluster.
I. INTRODUCTION
Mongolia has determined an objective to introduce
an innovation in all the social and economic sectors
widely, to promote high-technology industries and to
create acknowledge-based economy, and developed
several policy documents including “Millennium
Development Goals-based Comprehensive National
Development Policy in 2008-2021”, “State Policy on high
technology industries, in 2010”, “State Policy on
information, communication and technology (ICT)”
/proposal/, “Master plan to develop science and
technology of Mongolia between 2007-2010” and
“Program to develop National innovation system in
Mongolia between 2008-2015”, “Law about of
innovation”, . In these documents it is reflected that …..to
support high technology products and industries, which
are made as a result of studies and innovation and to
develop high technology industries as a Science and
Technology Park and cluster.
There are some start-up operations to create a legal
environment for science and technology actions and to
develop their management and organizations but an issue
to involve results of research works in economic cycle, to
have a optimal mechanism, to regulate relations between
parties – subjects of science, state and business and to
strengthen their collaboration, has not solved yet.
II. DEVELOPMENT
PROSPECTS
OF
MONGOLIAN INFORMATION AND
COMMUNICATIONS SECTOR
Mongolian telecommunications and information
sector will increase by its percentage of GDP, service
revenue and investment scenario and it will be a key
factor in economic development.(Table №1)
TABLE I.
MONGOLIAN INFORMATION AND COMMUNICATIONS SECTOR
INDICATORS, BY YEARS
Indicator
2010
2011
Percentage of GDP
2,9
2,6
Total revenue from services,
470,9
538,9
billion.tug.
Investment
for
sevices,
89,9
107,7
billion.tug
Gross income in state budget,
81,9
96,5
billion.tug.
Total service revenue of Information and
Communications sector reached 538.9 billion tugrugs,
69.3% of which comprised of mobile communications
service, 6.8% - content service, 6.4% - internet service,
4.4%- network service, 4.0%- television broadcasting

2. service, 3.5%- fixed telephone communications service,
2.4%- cable television service, 2.0%- postal service,1.2%
- international call service.
By the end 2011, 736 licences were issued for
carrying out 29 differents types of 11 categories of
telecommunication operations, 464 special licences for
radio frequency use, 736 owners certificate in the
Mongolian Telecommunications sector.
From 2011, digital content service and its
regulation has been organized intensively by governing
organizations
of
Mongolian
information
and
communications.
Mobile and Fixed communication services.
There are 4 major telecom carriers and they are
providing mobile services for 95% of total population, in
350 regional areas and towns. The number of mobile
service subscribers reached 2.9 million by the end of
2011. This leads to mobile service subscribers density of
103.8 per 100 subscribers which exceeds the world
average by 19 units.
Third generation technology or 3G technology has
been implemented in mobile communications services
since 2009. As of the end of 2011, it is providing mobile
communications services to 28282 subscribers of
Ulaanbaatar city and 23 province centers. Number of
subscribers has increased by 84.5 % compared to the last
year.
The number of fixed telephone communications
carriers service subscribers reached 143856 at the end of
2011 and wireless fixed telephone communications
carriers service subscribers are 43705.
Internet service
Internet service has been playing an important role for
recent economic and social development, since it began
in Mongolia in 1995. The number of internet service
subscribers has drastically increased due to the open and
free competition in the internet service market, and
implementing 3G technology for mobile communications
carriers. By the end of 2011, 85 special internet service
licenses were issued and the number of internet service
subscribers reached 457642 increasing by 1.3 times
compared to 2009.
Population and housing Census of Mongolia conducted
by National statistical Office states that 30.6% of
population aged 6 and over use the internet.
Companies with special licenses , such as state–owned
Information Communications network company,
Mobicom corporation, Gemnet company, Railcom
business service center and Sky networks company,
provided Information and Communications network
services in 2011. These internet service carriers access
the Trans telecom, Russia connection and China telecom,
China Unicom, China gateway. Total length of optic fiber
transmission network of these network service carriers is
16838.8 km.
TV and radio multi-channel broadcasting services
As of the end of 2011, 82 entities and individuals
have TV and radio multi-channel service licenses.They
use satellites, remote and earth stations for broadcasting
services. Government of Mongolia has approved the
National Programme to implement full digital terrestrial
broadcasting of television programs. The shift to digital
technology would be accomplished by July 2014.
47.35% of cable TV subscribers are located mainly
in Ulaanbaatar, 14.23% of them are in the remote areas
and 38.4% receive the satellite TV broadcast. 52.6% of
TV broadcasting subscribers receives digital technology
services and 47.4% of them receive analog technology
services. 40.55% of TV broadcasting subscribers use
cable TV services, 18.56% - mmdS multi-channel service
via the multi-terminal system, 38.0%- satellite antennas,
2.49%-internet protocol /IPTV/.
In
telecommunication
sector,
high-speed
bandwidth capacity of data transmission is on focus for
the development of services of next generation
technology.
For half-year 2012, there are a total of 7800
employees working in the Mongolian Information and
Telecommunications sector, over 380 of which are
professors and researchers,123 of them are scientists
/Sc.D - 8/. It is obvious from this that there is not
sufficient competitive human resource in the information
and telecommunications sector. For the past 5 years, 7100
students in total graduated from the 44 universities. It is
clearly seen from the human resource market research
that Information and Communications sector affects the
development of the various sectors in different ways.
We face the increasing trend to show the value in
competitive scientific research to produce hightechnology products in Information and Communication
sector.
III. HIGH-TECH INNOVATION CLUSTER FOR ICT
Cluster development strategies have been implemented
in technology transmitting centers, science and technology
parks including business and technology incubators,
clusters, techno-polis, science and technology towns and
regions.
Information Communications Technology and Post
Authority /ICTPA/ and National Development and
Innovation Committee /NDIC/ are planning to implement
the
cluster
“Government-Universities/Science
organizations-Manufacturers” (Table 1)
For the future development of HTIC in ICT, software
and electronics, it is willingly to choose the further
research study, based on global ICT market, technology
development tendency and domestic resources.
TABLE II.
FUTURE TENDENCY OF HTIC ADVANCED TECHNOLOGY
Software
System development, software engineering
Cloud calculating,
Internet, Mobile communication development technology

3. Electronics
Developing special purpose integral scheme
Micro-electro-mechanic system,(mems) and sensor
Manufacturing solar generator battery
Telecommunication
Types of satellite services, band planning
The survey team realized there is an urgent need to
establish Science and Technology Park in Mongolia in the
earliest stage of HTIC development. Structure of Science
and Technology Park, which has 4 sections and objectives
of each sections, their course of actions, required facilities
and internal management of each sections are determined
accurately by the survey team. Also, the investment
estimation has been done successfully.
1) Report of survey, ordered by Information
Communications Technology and Post Authority and
National Development and Innovation Committee,
provides 3 stages of implementation and development of
HTIC. Also, project implementation plan of HTIC has
been developed.
TABLE III.
STAGES OF CLUSTER DEVELOPMENT
Preparetion stage: 2012- 2014
GOAL: To ensure HTIC, ICT preparation
Plan &infrastructure: To develop a feasibility study, Master plan,
Business plan and a drawing of STP infrastructure and construction,
To develop a plan to prepare human resource
Activities:
To intensify cooperation between university and private
sector
To develop a policy to learn new technologies
To improve quality of universities
To strengthen capacity of small and medium-sized industries
To prepare professionals
To determine detailed topics of high technology research
To involve attendance of U and SO at the NITP
to establish pre-incubators
to support private R&D
to support innovation
1st stage: 2015- 2017
GOAL: To build a infrastructure and construction of STP
Plan &infrastructure: To build an infrastructure and construction of
STP , To develop a program to attract specialist
Activities:
STP construction
To set up a temporary commission of cluster and assignment
of management structure
To prepare cluster human resource
To involve attendance of U and So at the NITP
Research on raw materials used for industries
To strengthen small and medium sized industries
To prepare professionals
To establish cluster fund and harmonize activities
To develop a network of professionals
To support operations of pre-incubators
To support private R&D
To support
innovation
To attract foreign high technology companies
To have entrepreneur arts
2nd stage: 2018-2020
GOAL: To operate activities of STP
Activities:
To establish cluster fund and harmonize activities
To develop a network of professionals
To conduct operations of pre-incubators
To implement a project at R&D center
To conduct trainings
To conduct market research and evaluation
Patent and license service
To support cooperation between participating parties
To grow up entrepreneurs
To invent a new technology
To prepare human resource
To develop cluster management
To grow up a start-up
To attract foreign high technology companies
To implement a joint project
3rd stage: 2021GOAL: To smooth activities of HTIC
Activities:
To establish cluster fund and harmonize activities
To develop a network of professionals
To establish high technology manufacture
Venture company activities
To attract foreign high technology companies
To implement a joint project
The research has been done on the management of
activities and cluster responsibilities of the parties
concerned in different stages of cluster development.
HTIC and high-tech industrial development is the
main source of producing value-added products. High
education institutes are considered an important source of
developing HTIC and they play a big role in HTIC
development. We have reviewed the role of higher
education and research institutions.
IV. ROLE OF HIGHER EDUCATION
INSTITUTIONS IN HTIC DEVELOPMENT
The
documentation
of
European Federation
Commission, “Role of higher education institutions in
European knowledge world” discussed within science and
higher education institutions says:
The most important 4 elements that provide knowledge
driven society and knowledge economy are the following:
(i) to build knowledge driven from the major scientific
research studies, (ii) to offer good education based on
scientific knowledge, (iii) to distribute knowledge in
society using ICT technology, (iv) to implement,
innovation and new technology, to apply newly obtained
knowledge in manufacturing the products as soon as
possible. It emphases the role of higher education
institutions in flexible interconnection of these 4 elements.
In developed countries, different projects have been
developed and implemented to support higher education
institutions.
TABLE IV.
STAGES OF CLUSTER DEVELOPMENT AND ROLE OF HIGHER EDUCATION
AND RESEARCH INSTITUTIONS IN DEVELOPING HTIC
Stages of cluster
development
Role of high education institutes
Stage 1
-To
To elaborate long-term projects in
developing state innovation policy, strategy,
develop

4. infrastructure and
ICT architecture,
- To create legal
environment
for
science
and
technology oriented
activities
and
investment
-To
provide
training
and
consulting services
science and technology.
to build a knowledge driven society to
enhance living standards of Mongolian
people
To develop spirit of innovation and
innovation
system
in
society
by
disseminating and advertizing science,
technology and the innovation knowledge.
To start business incubation activities, to
write business plan
To change the syllabus of bachelor, master
and doctoral education in engineering and
business (to develop Entrepreneur trendy
syllabus of HTIC sector )
To enable the teachers and students to work
as a team, to allow students to choose the
adequate topics of self-assessment work,
course work and diploma thesis that suit their
their own needs and interests
To have the certain policy to receive minimal
training in high-technology
To set out an educational foundation for
student researchers,
To establish and promote fair and open
research paper competition
To
take
initiative
for
technology
transmission
To expand the cooperation between higher
education institutions, science and research
organizations and private sectors.
To release new technology, to provide
required technology transmission, to prepare
human resources
Stage 2.
Technology
business incubator,
research
and
development work,
innovation,
program,
technology
transmission,
development
of
funding
system,
cluster system,
To
develop
Entrepreneurs
To improve quality of training of higher
education institutions
To contribute to the development of external
and internal integration of National
innovation system.
To prepare research work and training
resources within innovation technology
management and national innovation system,
scientific knowledge and information
distribution
To establish technology and business
incubators in higher education institutions, to
measures promoting entrepreneurship
To establish productive scientific and
research team, to corporate effectively in
science-education-business field, to develop
cooperation in innovation, to promote
partnership.
To do business assessment and to determine
growth strategies of business and
possibilities of coming on a global market
To establish start-up companies by the higher
education institutions and scientific and
research organizations
To apply available resources
opportunities in innovation program
Stage 3.
High-tech
manufacturing,
start-up companies,
venture companies,
to attract foreign
companies,
to
establish
branch
offices
and
To do the basic and applied research , to
implement research results, circulation of
economic activities
To prepare engineering and innovation
human resource
To choose Entrepreneurs, managers who will
work in research and development sector, to
do technology research, to train specialists
who will implement innovation projects and
negotiate science and technology contracts,
and to train managers who will work in
venture investment foundations, companies
and techno-parks, technology and business
incubators,
to distribute science and
technology knowledge and information
CONCLUSION
Working outcomes of government, higher education
institutions, scientific and research organizations, private
sectors and manufacturing is not sufficient enough to
develop science and technology, knowledge-based
economy and technology-based manufacturing. It is
possible to improve it by using innovation cluster and
principles of cooperation. It enables us to pull out of
technology backwardness and produce value-added
products that are able to compete in the global market.
Cluster development, its stability and independence
starts as big companies with high technology comes into
the market of that country. The main factor to attract
foreign investment and high technology is high skilled
human resource, continuous training of specialists and
higher education institutions and science and research
organizations that are able to do high-level research.
Developing the cluster based on own internal resource
is considered as the most cost and time effective version at
present. There is also a real opportunity to develop
manufacturing technology park relying on natural
resource.
Research activities of higher education institutions and
science and research organizations should be supported by
the government policy. It will play an important role in
developing companies with modern technology and in
establishing human resource as well as in developing
knowledge economy based on human resource.
REFERENCES
[1]
[2]
[3]
[4]
[5]
[6]
Report of Pre-feasibility Study to Establish
High-Technology
Innovation Cluster
of Information and Communications
Technology, Mongolia, ICPTA, 2011.
Statistical yearbook 2012, Mongolia, 2012.
Role of higher education institutions in European knowledge
world, UNESKO, 2010
Benner, M. and U. Sandström. 2000. Institutionalizing the Triple
Helix: ResearchFunding and Norms in the. Academic System.
Research Policy 29: 291–301.
Bergek, A., Jacobsson, S., Carlsson, B., Lindmarki, S., Rickne, A.,
2005. Analysing the dynamics and functionality of sectoral
innovation systems – a manual. In: 10 Year Anniversary DRUID
Summer Conference, Copenhagen, June 27–29.
Bergek, A., Jacobsson, S., Carlsson, B., Lindmark, S. and Rickne,
A. 2008. Analyzing the Functional Dynamics of Technological

5. Innovation Systems: A scheme of analysis, Research Policy, 37
(3): 407-429.