OECD Reviews of Innovation Policy: Korea 2023
The "Miracle on the River Han" catapulted Korea from developing country to a prosperous economy, driven in part by advancements in science, technology, and innovation. Being the second-highest R&D spender among OECD economies, Korea excels in key technologies, including semiconductors, 6G, and ICT infrastructure. Despite this remarkable progress, disparities remain between SMEs and chaebols, manufacturing and services, ICT and non-ICT industries, and urban and rural areas. Korea also grapples with societal and economic vulnerabilities, including an aging population, a significant carbon footprint, limited renewable energy use, and pronounced gender inequality. To further seize opportunities for equitable and inclusive growth, Korea must foster a shared national vision to develop science, technology, and innovation to address societal issues, enhance R&D policy implementation, promote excellent research, further internationalise, and broaden technology diffusion.
Korea’s economic performance and framework for innovation
This chapter sets out an overarching framework for Korea’s National Innovation System. It starts by summarising Korea’s past and current economic performance by way of international comparison. Next, it highlights Korea’s innovation system’s key strengths, given its preparedness for transitional challenges, including the digital transformation, its growth in labour and multifactor productivity and innovation inputs. Subsequently, it elaborates on Korea’s industry structure and how it sets the conditions for innovation, particularly regarding knowledge-intensive activities. Pursuant to a discussion of Korea’s current positioning in global value chains and the impact it has on technological sovereignty and potential for innovation, this chapter finally addresses Korea’s particular vulnerabilities in the face of arising societal challenges, notably the green transition and population aging, and how these may affect framework conditions for innovation.
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