From conception to reinvention: KAIST advances Korean economic development

By Byoung Yoon Kim and Sung-Mo “Steve” Kang, KAIST

Academic research and economic development | Volume 4, Issue 1 – 2014

Founding KAIST to transform the country

KAIST (the Korea Advanced Institute of Science and Technology) was founded in 1971 with a mission to produce well-trained scientists and engineers with advanced degrees. These professionals were crucial for the task of transforming the Republic of Korea (Korea) into an industrialized nation. In the early ’70s, Korea was heavily dependent on agriculture and some light industries such as textile manufacturing. The per capita gross national income (GNI) was a few hundred dollars. Then President Park Chung-Hee began “Saemaul Undong” (New Community Movement), a nationwide endeavor to pull the nation out of poverty. The campaign, which focused first on rural areas and then spread to other regions, is now regarded as a model for underdeveloped countries.(1)

Park’s efforts to build Korea’s high-tech capabilities were ambitious, considering that the country was largely agriculture-based and could not afford to build infrastructures for such industries. Nevertheless, Korea launched steel, shipbuilding, automobile and electronics programs — all of them world-leading industries today. Aside from financing, another huge challenge was providing skilled manpower and supporting R&D staff for the new industries.

No Korean universities had research-oriented graduate programs at the time, although KIST (the Korea Institute of Science and Technology) had been established in the late ’60s, modeled after the US’s Battelle Memorial Institute to provide R&D support. The solution was to create KAIST and charge it with developing highly skilled manpower.(2) It is noteworthy that Korea established a new educational institution to carry out this mission, instead of turning to established universities. The decision turned out to be right for Korea.

Successfully delivering results for the past 40 years

KAIST has successfully carried out its mission for more than 40 years, as evidenced by the increase of nearly two orders of magnitude in per capita GNI (to over US $20,000) and Korea’s worldclass industries in semiconductor electronics, automobiles, shipbuilding, steel and other areas.(3) (See Figure 1.) Since its first 100 MS graduates in 1975, KAIST has bestowed BS, MS or PhD degrees on almost 50,000 graduates — many of whom went on to play critical roles in building the nation’s leading industries. Others joined Korea’s research laboratories and universities, where basic R&D has created a strong foundation for future growth.(4) (More than 20 percent of Samsung Electronics’ executive-level engineers are KAIST graduates.)(5) Many early KAIST graduates are now leaders in industry, R&D or the public sector in Korea.

Facing current issues and setting a mission for the next 40 years

Today Korea is at a turning point. Its economic growth has slowed over the past 10 years, with per capita GNI hovering around US $20,000 throughout this period. Korea needs a new growth engine to move forward as an advanced nation. The already developed industries with large world market shares cannot make quantum leaps to contribute to the national goal of doubling the per capita GNI. Instead, a paradigm change for the industrial infrastructure and education system is necessary. Consequently, President Park Geun-Hye, elected in 2013, is pushing for a “creative economy,” with knowledge-based entrepreneurship as a key factor. KAIST is again expected to play a critical role in bringing the Korean economy to the next level.
Many Korean universities are now competing with leading research universities around the world, and KAIST has been a role model in that effort. For the new economy, KAIST is recharging itself to educate future entrepreneurs and to create an ecosystem for world-class technology startups.  It is planning new programs for entrepreneurship education and adding the supporting infrastructure, while strengthening basic R&D activities to sustain creativity and innovation.

The plan: Startup KAIST initiative, Institute of Entrepreneurship, and K-Valley

Entrepreneurship is not new to KAIST. In fact, a KAIST faculty member created Qnix Computer Co., Ltd., a personal computer startup, in 1981 before the “startup” concept was familiar in Korea. This company became a role model for Korea’s next big startup in 1985, Medison Co., Ltd., which captured a significant piece of the world market share in ultrasound imaging. KAIST’s entrepreneurial spirit, unique at that time in Korea, has inspired many: KAIST graduates have founded more than 590 startups and created more than 16,000 jobs.

But much more is needed to significantly impact the nation’s economic future, including a sustainable ecosystem for technology startups and a culture that encourages taking risks and exploring new frontiers. KAIST’s advanced research, innovative education system, and highly talented faculty and students mean it is well positioned to carry out this new mission.

A new “Startup KAIST” movement aims to nurture an entrepreneurial culture, create an ecosystem for startups, and promote go-global strategies. It is challenging, encouraging and assisting young people to generate creative ideas and put them into practice, or possibly start a new industry. The idea is to create a highly supportive environment for financing, product development and manufacturing, marketing, business development, and even the exit strategy.

KAIST will engage different interest groups to help the entrepreneurs. An international strategy — which includes getting financing, selling products, and exiting in the global market — is a must, considering Korea’s very limited domestic resources and market. KAIST plans to establish a new Institute of Entrepreneurship to coordinate existing programs and create new functions to educate and support entrepreneurs. Eventually it can become a “creative economy” model for all of Korea.

It is hoped that KAIST’s role in creating “K-Valley” (in the R&D district known as Daedeok Science Town) will be similar to Stanford University and Silicon Valley. The area is home to 30 national research laboratories, five universities (including KAIST), and more than 1,000 companies and corporate  research laboratories that can provide a synergetic environment for commercializing R&D results.

Just as it did in the 1970s, KAIST is laying the groundwork for the next 40 years of Korean economic development.


1. Research project on the theory establishment of Saemaul Undong (new community movement), National Archives of Korea, 1973.
2. From KIST to Daedeok Science Town: The Creation and Reproduction of Government-Supported Research Institutes during the Era of Park Chung-hee, Critical review of history, vol.85, pp.262-289, 1227-3627, 2008.
3. The Bank of Korea, 2012 National Account Report, Press Release, 2013.
4. KAIST Promotional Brochure, KAIST PR Department, 2013.
5. Elite engineers of Samsung Electronics, ChosunBiz, April 2013.

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