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Strong development in ICT and electronics sectors has made Korea one of the fastest-growing OECD economies over the past decade. It weathered the global crisis better than most OECD and non-OECD economies, and it is the world’s most R&D-intensive country, with GERD at 4.36% of GDP in 2012. However, Korea faces some challenges: slowing growth, rising inequality and unemployment, a rapidly ageing society, and emerging environmental problems. The 3rd S&T Basic Plan (2013-17) sets out the new government’s road to economic prosperity and public wellbeing with the High Five Strategy to address long-term challenges.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Innovating to contribute to structural adjustment and a new approach to growth

Economic convergence with the advanced OECD countries has been progressively achieved, and consequently productivity growth slows and the potential for growth lessens. The High Five Strategy means to identify and support new industries, while the Creative Economy initiative (2013) sets the agenda for strengthening Korea’s mid- and long-term creative capability.

Innovation to contribute to sustainable/green growth

Korea has been at the forefront of green growth initiatives and aims to be a hub for global green growth. The Green Climate Fund (GCF), started in 2013, encourages R&D, green technology development and green education. The Creative Economy initiative emphasises the role of innovation in addressing social challenges such as Internet privacy. Various R&D programmes for social problem solving, such as sustainable cities, have also been established.

Strengthening public R&D capacity and infrastructures

While public R&D expenditure is high, Korea still has few world-class universities and produces few high-impact publications by OECD standards (Panel 1a, b, c). One reason is that the public research system has historically been skewed towards applied and development-oriented research (Panel 4), much of which is performed in the PRIs (known as Government Research Institutes in Korea) that supply technology for industrial R&D. The 3rd S&T Basic Plan has allocated USD 109 billion (KRW 92.4 trillion) over the next five years to expand public R&D capacity, including national R&D facilities in strategic areas. At the same time, the government seeks to improve the efficiency of its R&D investment and has a comprehensive action plan for reforming the system for evaluating the performance of national R&D programmes.

Business innovation, entrepreneurship and SMEs

Large manufacturing conglomerates are the main performers of business R&D, with SMEs and young firms playing much smaller roles (Panel 2). The Creative Economy initiative focuses on building SMEs’ innovative capacity, and the government plans to increase the share of its investments in R&D going to SMEs from 12.4% in 2011 to 18.0% in 2017. The 3rd S&T Basic Plan intends to build a favourable ecosystem for high-technology start-ups by strengthening technological assistance for SMEs through extension programmes and innovation vouchers and by strengthening support to entrepreneurship through the supply of venture capital.

Targeting priority areas/sectors

Korea has a strong RTA in ICTs (Panel 3) with almost half of its business R&D performed by computer, electronics and optical industries. Like its predecessors, the 3rd S&T Basic Plan seeks to help diversify the economy by orienting policy action towards a wider range of sectors and technologies, such as food and agriculture and medical services.

Country Charts

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Selected Highlights

STI policy governance

Under the new government, a ministerial overhaul and major changes in STI policy co-ordination arrangements were carried out in 2013. The Ministry of Science, ICT and Future Planning (MSIP) was established to support the implementation of the Creative Economy initiative and the Ministry of Trade, Industry and Energy (MOTIE) groups its trade functions with the R&D, industry and energy policy portfolio. In addition, a new National S&T Council under the Prime Minister’s Office is the highest decision-making body on cross-agency STI policy issues.

Technology transfers and commercialisation

Public research is mainly conducted in the PRIs, which have strong links with industry (Panel 1o). Universities and PRIs are also very active in patenting their research results (Panel 1p). Korea aims to establish a new eco-system for co-operation among PRIs, universities and industry to promote greater use of public R&D results for industrial and social purposes. It includes a One-Stop Assistance Centre to help SMEs access the facilities and expertise of PRIs. The MSIP also has programmes to support exchanges of professors and students between universities and PRIs, and plans to establish 18 new joint industry-university-PRI R&D centres by 2017. In addition, the 3rd S&T Basic Plan encourages greater shared use of S&T infrastructure to broaden access to S&T knowledge and information. PRIs are required to devote 15% of their total budget to support SMEs by 2017 (compared to 7% in 2012) and 3% to transfer technology to SMEs and support human resources (compared to 1.76% in 2012).

Clusters and regional policies

The Seoul Metropolitan Area is the focus of much S&T and innovation activity, and this has led to unbalanced regional growth. The government has therefore created special R&D districts, such as Daedeuk, Gwangju, Daegu and Busan, each with its own technological orientation, to promote regional industrial bases and local job creation. The Venture Investment Fund for special R&D districts was initiated in 2012 with USD 148 million (KRW 125 billion) to strengthen regional private investment.


Levels of international co-authorship and co-patenting are well below the OECD median (Panel 1q, r). A traditionally strong focus on applied research and technological development performed largely in PRIs partly explain low levels of international co-authorship. The low level of patent applications with foreign co-inventors is partly due to Korea’s conglomerate industrial structure, which tends to retain technology development within the group. In the past, there have been occasional instances of cross-border co-operation but no comprehensive strategy for international STI co-operation. The MSIP has therefore developed a Comprehensive Plan for STI Global Co-operation, which includes the formation of a global network of overseas STI outposts, expansion of S&T official development assistance (ODA), reinforcement of science diplomacy, promotion of international joint R&D, and sharing of large R&D facilities. The MSIP is also implementing measures to encourage international mobility of highly skilled labour.

Skills for innovation

Korea has invested heavily in higher education and ranks third in the world in terms of the share of GDP spent on higher education (Panel 1s). However, the Korean education system has mixed results. For example, with a large share of tertiary-qualified adults, adults’ technical problem-solving ability is just average (Panel 1t, u), and while 15-year olds perform well in science, the rate of doctorates in science and engineering is modest (Panel 1v, w). The MSIP has developed a Comprehensive Plan for the Scientifically Gifted and Talented (2013-17) to identify pupils with high potential and nurture them to be more creative. The Five-Year Plan for University Start-ups (2013-17) aims to improve entrepreneurship education in secondary schools and universities. Korea’s demographic pattern indicates that the student population will decline from 2018. The National Scholarship programme, the Income Contingent Loan for low-income students, with a zero interest rate, and the 3rd Women S&E Promotion Basic Plan (2014-18) all aim to increase participation in higher education. The MSIP, along with other ministries, is implementing various initiatives to attract young scientists and engineers to SMEs, e.g. by establishing a one-stop information network for job markets and encouraging pre-employment of students.