ROBERT D. ATKINSON AND SEJIN KIM|JUNE 2026 South Korea produces large numbers of STEM graduates, but too many are attracted tomedicine, and too few go into engineering. Korea should rebalance its education financing anduniversity incentives to ensure that enough engineers are ready to work in advanced industries. KEY TAKEAWAYS Korea’s STEM challenge is not a pipeline shortage but a deployability gap. The countryproduces large numbers of graduates, yet firms still struggle to hire engineers andcomputing specialists who can contribute immediately to advanced industrial work. Korea’s incentive structure favors medicine over engineering. Protected medicallicensing, stable earnings, and regulated tuition create predictable returns, whereasengineering involves slower wage growth and greater early career uncertainty. Korea’s weak engineering ROI strengthens the case for reform. Compared with the UnitedStates, Korea offers weaker wage premiums, slower early career advancement, and fewerapplied career pathways for engineers. Korea should reform professional tuition policy to rebalance talent investment by allowingdifferentiated tuition in high-return fields such as medicine, with mandatory reinvestmentin engineering and applied science. Graduate education should be redesigned around deployability, not academic throughput.Korea should adapt Olin-style project training and Denmark’s Industrial PhD model toconnect STEM training directly to industry needs. CONTENTS Key Takeaways ................................................................................................................. 1Introduction ..................................................................................................................... 2Korea’s STEM Shortage Is a Deployability Problem, Not a Degree Problem .............................. 5Why Medicine and Engineering Produce Divergent Career Choices.......................................... 6Policy Framework: Align Incentives Toward Engineering Deployability ..................................... 9Conclusion ..................................................................................................................... 12Endnotes ....................................................................................................................... 14 INTRODUCTION South Korea does not lack STEM (science, technology, engineering, and math) graduates. Itlacks deployable engineers and computing specialists capable of contributing immediately toadvanced industrial systems. Each year, Korean universities produce large cohorts of science andengineering graduates, yet firms continue to report persistent cumulative shortages of job-readytechnical talent. By 2029, Korea is projected to face a shortage of roughly 580,000 workers inadvanced technology sectors, including artificial intelligence (AI), cloud computing, andsemiconductor-related occupations.1This gap is not primarily the result of demographic declineor insufficient educational capacity. It reflects structural incentives embedded in Korea’seducation and labor market institutions. At the center of the problem is a misalignment between private educational incentives andnational industrial priorities. Medical education operates under quota protections and regulatedtuition ceilings that constrain tuition levels while preserving strong labor market returns.Engineering and computing fields operate under the opposite structure. Students face longerincome uncertainty, weaker institutional signaling of long-term reward, and less-predictableemployment pathways. Under these conditions, the migration of top students toward medicine isnot a cultural anomaly but a rational economic response to institutional incentives. The implication is clear. Korea’s STEM workforce challenge should not be treated primarily as apipeline shortage. It should be treated as an institutional design problem. Expanding enrollmentalone will not produce deployable engineers or computing specialists if underlying financial andorganizational incentives continue to favor credential accumulation over workforce readiness.What is required is not incremental expansion but structural reform that links educationfinancing, institutional organization, and workforce outcomes into a coherent deployment system. This report proposes a coordinated national reform strategy built around explicit institutionalresponsibility: ▪The National Assembly should authorize differentiated tuition frameworks for high-returnprofessional programs, including medicine, by amending relevant provisions of the HigherEducation Act.Current tuition structures treat programs with vastly different privatereturns in similar ways, despite large differences in expected lifetime earnings acrossfields.2Allowing controlled tuition differentiation would better align private educational returns with national workforce priorities while reducing cross-subsidization that currentlydistorts student choice