Will KAIST lead the way for Korean innovation?

The initial ambition was to design KAIST to contribute in building the success of South Korea. This is central in its success as an innovation leader. Special favors permitted by the government to students, and innovative ways in working with...

The initial ambition was to design KAIST to contribute in building the success of South Korea. This is central in its success as an innovation leader. Special favors permitted by the government to students, and innovative ways in working with teaching, favors innovation at KAIST more than at other universities.

Korea Advanced Institute for Science and Technology (KAIST) is the oldest Science and technology university in Korea, established 1971, and it is one of six Korean universities ranked among the 100 most innovative universities in the world. (2019 KAIST ranked 34. The others being POSTECH (12), SNU (29), Sungkyunkwan (45), Hanyang (72), Yonsei (76).) It was ranked the sixth most innovative university by Thomson Reuters 2016 and 2017.

KAIST stands out among Korean universities in important ways. It is one of few Korean universities to offer full scholarships to all accepted students. In a reality where university studies are expensive it makes KAIST (and some other technical institutes) very interesting to consider. It certainly lowers the threshold for becoming an engineer or Scientist.

Another popular feature of KAIST is that students are relieved from the normal 2-year military service that is otherwise mandatory to male Koreans. With dwindling numbers of young Koreans eligible for military service, this practice is however being questioned and may be phased out by 2023, except for doctoral students.

KAIST’s history of being the first technical research university in Korea and given special favors by the government reflects in many ways Korea’s history of compressed industrialization and strong sense of building a future and creating prosperity. KAIST professors we have talked to take pride in this history and consider it being an important part in KAIST’s success.

From the perspective of research, KAIST produced, 2261 research projects in 2018, funded by 284 mil USD, and 63 technology transfer contracts, 4,4 mil USD in licensing fees, and 1843 patent applications and registrations.

Funding Startups

While Korean universities are not permitted to own or invest in companies, they can maintain funds for donations and use them for a diversity of purposes. KAIST maintain such a fund and use it for financial support to startup companies or commercialization purposes.

KAIST works in other ways with professors and through a budget made available by the Ministry of Science and ICT, MSIT, they are investing about 1 mil USD in the innovative work of ten professors per year.

KAIST register and owns all patents emanating from research. Ownership in a company seems to be negotiable and a matter for how the university agrees to exit their engagement.

At KAIST, the value of a patent is shared with 50 percent for the university and the other 50 percent shared through agreements among innovators. In practice it means some of the value will go to the department and a (sometimes perceived small) remainder goes to the company/inventor.

Profits and royalties from IPR will in part be re-invested to maintain patents and the rest is made available for university spending as decided by the management.

Nurturing an Innovative Culture Among Faculty

KAIST changed its approach to evaluation of its faculty a few years ago. Today evaluation is to a lesser degree focused on quantitative measures and publications. Instead, a candidate professor will be assessed through a maximum of ten papers and by letters of recommendations from international peers. This is aimed to ensure international relevance and creative work.

KAIST departments are also evaluated and the criteria for evaluation among other things, are how their professors collectively produce patents and startups. This metric gives incentives to management at departments to encourage professors to consider commercialization from their work. Since far from everybody have the entrepreneurial inclination to do that, such institutional support can make a great difference.

Startup Students

KAIST students are welcomed to participate at the K-School to learn about startups and get practical skills. The K-School offer classes for freshmen with the intention of getting them interested in innovation and entrepreneurship. It also offer an Entrepreneurship Innovation Minor for 40 undergrads every semester (140 applied last semester). It also offers a Masters in Entrepreneurship in e.g. Mechanical Engineering, through a one-year program that does not include writing a thesis (which may be attractive to students that are more doers than writers). There are about 25 such students and most of them will start a company during their studies if not before. The head of the K-School count 50 new startups in the five years they have been active.

The startup support at KAIST also run a startup club, a Maker club, meet up’s, camps, action-oriented learning events, tech days, a startup office and a host of other events and activities.

Success Factors & Culture

In general, there is an increasing understanding of the significance of innovation in Korea but there remains a strong focus on research and development.

Entrepreneurship and commercialization as important components for innovation has not been considered an attractive career option among students or professors. The socially and culturally accepted careers have been to become a professor or take employment at one of the major conglomerates.

Students have not been fully free to choose their career but highly dependent on the acceptance by their parents, whom have invested large sums in their education and expect them to reciprocate and take care of them as they grow old.

Adult prospective entrepreneurs also have economic responsibilities to consider when they invest in a startup company: Bankruptcy will not clear insolvency of a failed venture but debts are personal and permanent. This will put the future of their children’s college fund at risk.

Failure in innovation is really about finding out how something does NOT work. If the prospect of failing has a too chilling effect, innovation will never get started. There is a well known and deeply rooted culture of competitiveness in Korea. It has given the Koreans a magnificent drive but the other side of that coin is a slim tolerane for failure. And it may explain why Korea has been the best at innovation in the safe contexts of the anonymous mass of enginners in large conglomerates. 

Culture and institutional factors have conspired to make innovation something for the large and established companies but according to professors and entrepreneurs we have spoken with, some of these things are changing and it is becoming more accepted among students to start a company.

Politicians and universities are aware of the need for Korea to raise further in the value chains by moving from fast follower to becoming an innovation leader. Universities have initiated programs to support change and are making professors and students more aware of such options.

Change can be fast in Korea and it may well be that students and younger professors will be increasingly interested in starting their own businesses. KAIST can lead the way.