How to Read This Report
What This Report Is
This report is the official account of Korea's ICT human resource development (HRD) experience between 1997 and the early 2010s. It is a retrospective reconstruction by Senior Research Fellow Sangwon Ko and Research Fellow Hayun Kang of the Korea Information Society Development Institute (KISDI), covering four distinct periods of policy evolution that the Korean authorities themselves identify: ICT infrastructure building (1997–2000), quantitative expansion (2001–2003), horizontal linkage strengthening (2004–2007), and ICT professional skills deepening (2008–present). The story begins with the Asian financial crisis and the IMF bailout of December 1997, when the Korean government chose ICT promotion as a strategic exit from the crisis, and it tracks how the Information and Communication HRD budget jumped from 6.5 billion won in 1996 to 116 billion won in 1998 — an 18-fold increase in two years.
The report was designed from the outset for one purpose — to share Korea's success with developing countries facing similar ICT-workforce questions. A purposeful text always makes choices about what to include and what to omit. The authors openly include one notable counter-case in chapter 5 — "the case of software skills nurturing policy: half success" — but the four-period framing and the "virtuous cycle" vocabulary still organise most of the narrative. The Companion takes the half-success admission as the entry point to the harder questions: about the demand-side jobs that the supply-side training assumed but did not always create, about the budget volatility hidden inside "the fund worked," and about the periods (especially 2001–2003) when an oversupply of ICT graduates emerged and the report's response is brief.
Read this report not as a reliable neutral description, but as a subject for critical analysis. There are still two good reasons to read it: first, it is a rare account written for readers who do not know the Korean context, with concrete numbers — 77 SNU professors retrained earlier in different sectors, but here 413,336 beneficiaries of the ICT HRD program from 1997–2009, an ICT-industry GDP share that rose from 4.6 % in the 1990s to 18.5 % in the 2000s, employment rates that climbed from 73.6 % in 2008 to 79.2 % in 2012, and a single 1996 fund — the Informatization Promotion Fund — that financed almost everything else. Second, how Korea narrates its own ICT HRD experience — which decisions it valorises (the four-period chronology, the SCM model, the Seoul Accord), which costs it tucks into footnotes (the 40,000 ICT jobs that vanished in 2001 alone, the moral-hazard voucher scandals, the SW workers whose wages stayed below HW workers for the entire period) — is itself a legitimate object of study.
- Diagnose your country's ICT human-resource challenges using five problem types and identify the most relevant Korean institution, programmatic mechanism, or design choice — from the Informatization Promotion Fund to the SCM model to the 10-million Basic ICT Education Project.
- Explain the four periods of Korea's ICT HRD policy (1997–2000 infrastructure, 2001–2003 quantitative expansion, 2004–2007 horizontal linkage, 2008–present professional deepening) and the logic and key initiatives of each.
- Identify success-bias patterns in the report (e.g., the "virtuous cycle" framing of choices that were actually crisis-driven; the "half success" software case treated as an exception rather than as a clue to a wider supply-side bias) and convert what the report does not say into critical questions.
- Draft a policy memo applying Korean ICT HRD experience critically to a specific developing-country context — choosing what to import, what to modify, and what to reject given different industrial-policy and labour-market starting points.
How This Companion Is Organised
The Companion is organised by reader problem type, not by report section order. Answer three questions in the 🔍 Diagnose tab and you will be routed to one of five problem types in the 📋 Type Guide. The 📚 Read the Report tab gives a 20–25 % compression of the report\'s six-chapter structure (Introduction; Background and Importance; Strategy and System; Specifics of Policies by period; Evaluation of Success Factors; Implications for Developing Countries); the 🔬 Critical Reading tab equips you to question the report\'s own framing.
Practitioner path: 🔍 Diagnose → 📋 Type Guide (your type) → confirm First Action
Course preparation path: 📚 Read the Report → 🔍 Diagnose → 📋 Type Guide (all types) → 🔬 Critical Reading
Critical reading path: 🔬 Critical Reading → Check Understanding → Scenario Writing → Further Reading
What Problem Am I Trying to Solve?
Diagnostic Tool — Find Your Type in Three Questions
Korean Experience Mapped to Your Problem Type
Type A Aligning ICT HRD with Industrial Policy
'We train many ICT workers but the country has not chosen which industries to grow. Graduates drift to other sectors or abroad. The HRD ministry and the industrial-policy ministry barely talk. How do we align them?'
Korea's Experience with the Same Problem
Korea's answer was to make industrial policy the master, not the equal, of HRD policy. Table 6-1 of the report walks through the alignment by decade. In the 1970s, when heavy and chemical industries were the chosen target, specialised technical high schools were expanded. In the 1980s, when technology-intensive industries became the target, university enrolment more than tripled. In the 1990s, with innovation and information networks as the priority, science-and-technology graduate schools were heavily funded and ICT HRD began. In the 2000s, with ICT itself named as a future growth engine, HRD investment was "significantly accelerated." The principle is stated plainly in the report: "Only when there is demand for a certain product or service is there a corresponding demand for labour."
The clearest single instance is the IT 839 strategy, established in 2004 — 8 services to be opened by government policy, 3 infrastructures to be built by service providers, 9 new growth engines to be produced by the manufacturing sector. The MIC took the strategy and rebuilt its ITRC programme around it: ITRCs already running were re-aligned to one of the 3 infrastructures or 9 growth engines, and new ITRCs were selected for fit with the strategy map. The number of ITRCs grew from 32 in 2002 to 50 in 2007. Figure 4-1 of the report draws the explicit mapping; every research centre is on the map. The HRD instrument was no longer abstract "train more ICT people" — it was "train people for the named strategic products."
Each ICT HRD programme needs an explicit industrial-policy target. Without one, the programme produces graduates the country has no plan to employ — and the report's "half success" software case (chapter 5 §2) is the warning of what happens when training runs ahead of demand: graduates emerge, wages stay low, the brain drain begins.
Where to Read in the Report
| Priority | Section | Why read it |
|---|---|---|
| 🔴 Essential | Ch. 6 §1 | The first and most explicit lesson written for developing countries — align ICT HRD with industrial policy |
| 🔴 Essential | Table 6-1 | The decade-by-decade alignment of industrial policy and HRD policy since the 1960s |
| 🔴 Essential | Ch. 4 §3 | The IT 839 strategy and the ITRC realignment that turned the strategy into HRD action |
| 🟡 Recommended | Figure 4-1 | The visualisation of 50 ITRCs mapped to the 3 infrastructures and 9 growth engines of IT 839 |
| 🟡 Recommended | Ch. 5 §2 | The "half success" software case — read this as the warning of what unaligned HRD looks like |
| ⚪ Optional | Ch. 2 §2 | 1997 IMF-crisis context — the moment Korea decided ICT industry would be the growth engine |
The principle is highly transferable. Every ICT HRD programme should answer the question "which industry does this feed" in one sentence; programmes that cannot answer are candidates for redesign or termination. The Korean execution required (a) an industrial strategy that named specific products, (b) a fund that disbursed against named targets, (c) a recurring evaluation that re-aligned both. The principle works at any scale; the Korean fund-and-strategy machinery is one possible implementation.
This week, write a single page that lists every ICT HRD programme in your ministry and, against each, names the specific industry or service it feeds. Send the page to your industrial-policy counterpart and ask which programmes correspond to industries on their growth list. The empty rows in the resulting table are your redesign agenda.
Type B Developing Labour-Market Data and Forecasts
'We have no idea how many ICT graduates we produce, how many work in their field, or what skills employers will need in three years. Every policy is a guess. How do we build the data layer?'
Korea's Experience with the Same Problem
The report treats ICT labour-market data and forecasts as a public good (citing Ko & Lee, 2004) and therefore as a permanent government responsibility. KISDI and KRIVET, both publicly funded, produced repeated quantitative forecasts that became the trigger for every policy turn. The 1999 Kwon & Oh shortage estimate (600,000–700,000 globally) underwrote the post-crisis ICT HRD budget increase; the 2001 Kwon et al. forecast of a 99,000 ICT-professional shortage 2002–2006 underwrote the quantitative-expansion period; the 2004 KRIVET projection of a 15,226 oversupply of bachelor’s-or-lower ICT workers and a 5,000 shortage of master’s-plus through 2010 underwrote the pivot to qualitative enhancement.
The data layer was not only forecasts. Korea built the Standard Industry Classification, the Standard Classification of Occupation and the Korean Employment Classification of Occupation, then defined ICT human resources by all three (industry, occupation, education). The 2006 OECD revision of ISIC 4.0, which expanded ICT to include retail and repair of ICT equipment, was adopted. Year-by-year statistics on graduates, beneficiaries of HRD programmes, in-field employment, employer satisfaction, and shortage rates by occupation are scattered across Tables 1-5 through 1-9, 2-1 through 2-3, 4-1 through 4-20, and 5-1 through 5-7. The criteria of achievement changed when the forecasts changed — from beneficiary headcount before 2003 to employment rate, in-field employment rate, industry-university projects and employer satisfaction after 2003. When the data showed something unwelcome (the 2001 collapse of 40,000+ ICT jobs; the SW-vs-HW wage gap), the report mostly reports it; the framing is sometimes generous, but the numbers are there.
Build the public statistics body before you need it, fund it from a non-discretionary source, and accept that good forecasts will sometimes contradict the current policy. The 2004 KRIVET forecast reversed the entire previous decade's "expansion" logic; the report shows policymakers willing to act on it.
Where to Read in the Report
| Priority | Section | Why read it |
|---|---|---|
| 🔴 Essential | Ch. 6 §2 | Develop statistical indicators and provide forecasts — the second lesson for developing countries |
| 🔴 Essential | Ch. 1 §1 | Definitions — ICT industry vs. ICT occupation vs. ICT education resources, and why each matters |
| 🔴 Essential | Tables 1-2, 1-3 | The Korean classification scheme for ICT occupations — a template you can adapt |
| 🟡 Recommended | Ch. 1 §2 | The shift in achievement criteria from beneficiary counts to employment / satisfaction / project counts in 2003 |
| 🟡 Recommended | Ch. 2 §2 | The 1999 shortage forecast that triggered the post-crisis investment |
| ⚪ Optional | Tables 5-3 through 5-7 | The SW-vs-HW comparative statistics — a worked example of what good data lets a country see |
The mechanics are highly transferable. Choose a host institute (Korea used KISDI and KRIVET, both pre-existing), give it a multi-year budget line, define one short list of mandatory indicators (graduate counts, in-field employment, shortage by occupation, employer satisfaction), and publish a forecast every two years. The hard step is cultural: accept that the forecast will sometimes recommend reversing current policy.
List on one page (a) which body in your government collects ICT-labour-market data, (b) which indicators they currently publish, (c) the date of the last published forecast. If any answer is "no one" or "more than three years ago," that is the policy gap. Choose one existing research body and write the one-paragraph mandate that converts it into your ICT-labour-market observatory.
Type C Closing the Quantitative-Qualitative Mismatch
'We have many ICT graduates but employers say they cannot find skilled workers. Universities teach theory, firms need practical skills, and neither side has any incentive to change. How do we close the gap?'
Korea's Experience with the Same Problem
Korea ran into the mismatch hard between 2001 and 2003. The quantitative expansion of 2001–2003 had pushed ICT graduates to 53 % of all engineering school graduates at the undergraduate level in 2000. Then the ICT bubble burst. The report records that more than 40,000 ICT jobs vanished in a single year (2001). By 2003, ICT major credits at Korean universities had fallen from 84 to 66 (a curriculum hollowing-out); IMD ranked Korea 19th in company-university cooperation in 2001 and 17th in industry-academia knowledge transfer in 2002; the KRIVET 2004 study projected an oversupply of bachelor's-or-lower ICT workers and a shortage of master's-plus through 2010.
The 2004–2007 horizontal-linkage strategy answered the mismatch with several instruments installed together. The SCM (Supply Chain Management) model created a formal channel through which firms supplied skill requirements, universities reflected those requirements in curricula, and firms hired the trained graduates on priority. NEXT (Nurturing EXcellent engineers in information Technology), introduced in 2006, reinforced the SCM by funding universities that analysed their own competitiveness, rewrote curricula, expanded internships and recruited professors with field experience. Hanium (2004) opened an online E2B platform: 3,000 industry experts from 1,700 ICT companies became mentors to college students; about 20,000 practical-business workers were nurtured. The Seoul Accord (2008), modelled on the Washington Accord, gave international accreditation to ICT-major programmes that met industry-aligned criteria. The outcome by 2012, recorded in Table 1-6: employment rate of HRD beneficiaries 79.2 %, in-field employment rate 89 %, industry-university projects 2,073 (up from 1,082 in 2008), employer satisfaction 88.8 out of 100.
The linkage between supply and demand has the characteristics of a public good — once built, all firms and schools benefit, so none will pay to build it. Government has to build the channel itself. SCM, NEXT, Hanium and the Seoul Accord were four different shapes of the same channel; Korea built all four because the linkage problem has multiple sides.
Where to Read in the Report
| Priority | Section | Why read it |
|---|---|---|
| 🔴 Essential | Ch. 4 §3 | Horizontal-linkage period (2004–2007) — the SCM model and the response to mismatch |
| 🔴 Essential | Ch. 6 §3 | Short-term and long-term policies to respond to skills mismatch — the lesson for developing countries |
| 🔴 Essential | Ch. 4 §3 (NEXT subsection) | NEXT as the reinforcement of the SCM, including how it changed university funding incentives |
| 🟡 Recommended | Table 4-11 | Linkage-period policy table — a one-page summary of goals, tools, success factors and limits |
| 🟡 Recommended | Tables 4-14, 4-15 | Seoul Accord members and companies granting hiring priority — the international and corporate sides of accreditation |
| ⚪ Optional | Ch. 4 §2 | The 2001–2003 quantitative-expansion period — read this as the cause that the linkage strategy answered |
The SCM/NEXT logic is highly transferable in principle, but Korean execution leaned on three things many countries lack: a domestic ICT industry willing to commit to specifications, a fund that could reward universities for compliance, and an accreditation body of national stature. Where any of the three is thin, start with the one that exists — typically the accreditation body — and use it to pull the other two into being.
For one of your top three universities, draft a one-page brief to industry partners asking them to commit to (a) a published list of skill requirements they will hire against, (b) priority hiring slots for compliant graduates, (c) a willingness to second one engineer per term as a guest instructor. If no firm will sign even one of (a), (b), (c), the mismatch is on the demand side, not the supply side — and you have just diagnosed it.
Type D Balancing Basic, Applied and Professional ICT Skills
'Our government funds elite ICT research but housewives, farmers and the elderly cannot use a computer. The digital divide is widening. How do we cover the whole skill ladder at once?'
Korea's Experience with the Same Problem
Korea did both ends at once. At the elite end, ITRC support reached 50 research centres by 2007; the Information and Communications University (ICU) was founded in March 1998 with a 101-billion-won budget (45 bn government construction, 40 bn telecom-operator operational fund, 12 bn private lab funds, 4 bn reserve); master's and doctoral fellowships in ICT-related fields ran continuously. At the applied end, formal university ICT departments were expanded, retraining vouchers were issued to existing ICT workers and unemployed graduates, and the MIC ICT Academy system grew.
At the basic end, the 10-Million Informatization Education Plan, launched at the Cabinet meeting of June 2000, mobilised ten ministries jointly. The plan targeted 11.13 million people — more than 20 % of the Korean population at the time — across housewives (2 million target), farmers and fishermen (191,000), the disabled (207,000), senior citizens (171,000), inmates (32,000), soldiers (740,000), public officials (510,000), teachers (615,000), students (3.36 million), employees of public corporations (200,000) and local residents (1.6 million). By June 2002 the actual reach was 13.85 million people — about 25 % of the population, overshooting the target. Korean Internet users rose from 3.1 million (22.4 % of the population) at end-1999 to 24.38 million (56 %) at end-2001 (Table 1-11 records the per-group usage gains). The OECD three-tier classification — specialists, advanced users, basic users — became the policy frame: which tier to weight changed with the strategy, but no tier was abandoned.
Treat basic, applied and professional ICT skills as a portfolio you rebalance, not as a choice you make once. When ICT was the growth engine after 1997, professional skills got priority. When the high-speed network was built and demand had to be created, basic skills got the investment. The portfolio shifted; the breadth did not.
Where to Read in the Report
| Priority | Section | Why read it |
|---|---|---|
| 🔴 Essential | Ch. 6 §4 | Promote balanced development of basic, applied and professional ICT skills — the lesson for developing countries |
| 🔴 Essential | Ch. 5 §1.2 | The OECD three-tier classification and how Korea applied it as a balanced portfolio |
| 🔴 Essential | Ch. 1 §2 (10M project) | The 10-Million Informatization Education Plan — goals, actuals, the population groups covered |
| 🟡 Recommended | Table 1-10 | Beneficiaries by group — housewives, farmers, the disabled, soldiers, public officials — with target vs. actual |
| 🟡 Recommended | Table 1-11 | The before-and-after comparison of ICT-education beneficiaries vs. non-beneficiaries on usage rate |
| ⚪ Optional | Ch. 3 §1.1–1.4 | The four strategy strands — infrastructure, formal education, retraining, mass internet education |
The principle and most of the mechanics are transferable. The Korean mass-mobilisation scale was made possible by the Informatization Promotion Fund’s flexibility; smaller-budget countries should weight the portfolio toward whichever tier most constrains their current industrial strategy. The pre-conditions — a list of population groups, a per-group target, a single fund disbursing across ministries against the same plan — are reproducible at any scale.
In one page, classify every ICT HRD programme in your government into basic, applied or professional; sum the budgets; compute the share. If any tier is below 15 % of the total, that imbalance is your first redesign target. If basic is below 15 %, the digital-divide programme is missing; if professional is below 15 %, the industry-supplying programme is missing; if applied is below 15 %, the bridge between the two is missing.
Type E Building a Virtuous Cycle That Outlasts Political Change
'Each new minister restarts ICT HRD from scratch. Programmes die at the end of their funding cycle. Institutions are reorganised every few years and nothing accumulates. How do we build a system that survives?'
Korea's Experience with the Same Problem
The Informatization Promotion Fund was established in January 1996 under the Informatization Promotion Act of August 1995. It is the single most important institutional residue of the Korean ICT HRD story. It has continued through three full government reorganisations: the responsible ministry moved from MIC (1994–2008) to MKE (2008–2013) to MSIP (2013–present), with the fund’s legal basis updated each time — most recently the 2009 ICT Industry Promotion Act — but the fund itself unbroken. It has continued through four distinct policy phases each with different tools but the same fund: ICT infrastructure (1997–2000), quantitative expansion (2001–2003), horizontal linkage (2004–2007), professional skills deepening (2008–present).
The fund’s revenue source was deliberately non-general-budget. Telecommunications operators contributed mandatorily under the Framework Act on Telecommunications; profits from spectrum-auction-like operations were added; government contributions topped up. The principle: "government funds collected by MIC through new common-carrier selection may as well be reinvested into MIC." This kept the fund from being raided when general-budget pressures rose and let MIC plan ICT HRD on multi-year timelines. The report identifies the fund itself as the success factor of the 1997–2000 period (Table 4-1, "Success Factor" row). Beyond financing, the report also names five elements of the virtuous cycle on which the fund was spent: ICT infrastructure for HRD, formal-institution supply expansion, retraining of the existing workforce, ICT education for the entire population, and forecasting / certification / institutional-framework refinement — the same five reappear in chapter 6 as the lesson for developing countries.
The fund is the institution. Programme names change, ministry names change, ministers change; what survives is the statute that says "this money exists for ICT HRD and only for ICT HRD." Without that statute, every new administration restarts; with it, the next administration inherits a working machine and can re-tune rather than rebuild.
Where to Read in the Report
| Priority | Section | Why read it |
|---|---|---|
| 🔴 Essential | Ch. 6 §5 | Be flexible and build a virtuous cycle — the fifth lesson for developing countries |
| 🔴 Essential | Ch. 3 §2 | Funding for policy implementation — how the Informatization Promotion Fund was designed |
| 🔴 Essential | Tables 3-2, 3-3 | Purposes, sources and statutory history of the fund through three government reorganisations |
| 🟡 Recommended | Ch. 5 §1.1 | Changes in government organisational structure in response to ICT market shifts — why ministries moved and how the fund survived |
| 🟡 Recommended | Ch. 4 §1–4 | The four-period chronology — evidence that one fund supported four different policy logics |
| ⚪ Optional | Table 4-1 | Period-1 success-factor row — the fund is named explicitly as the reason that period worked |
The principle — a dedicated, statutorily-grounded, non-discretionary fund — is transferable. The Korean revenue source (mandatory telecom-operator contributions) requires a profitable domestic telecom sector; substitutes include earmarked spectrum-auction proceeds, an ICT-industry levy, or a portion of a development tax. The institutional habit of keeping the fund through three ministry reorganisations is partly a function of strong administrative continuity; in more politically volatile contexts, write the statute as restrictively as possible.
Find the statute that authorises your current ICT HRD spending and write its sunset date on one line. If the line ends within five years or depends on a single ministry, draft the one paragraph that converts it into a multi-year dedicated fund with a non-general-budget revenue source. Send the paragraph to your legal counsel and your finance ministry counterpart this week. The paragraph is the seed of every later policy decision.
The Whole Terrain of the Report
1 Introduction — Why Korea Invested Heavily in ICT Human Resources after 1997
1.1 The starting point — Korea facing the IMF crisis
The report opens with a working diagnosis that is more strategic than technical: ICT human resource development is treated as a development instrument, not as a sector. In December 1997, Korea asked for IMF financial aid to address its financial crisis. The surface trigger was a foreign-exchange liquidity shortage; the deeper trigger, the authors note, was poor corporate management — excessive borrowing, a high-cost low-efficiency structure — that the crisis exposed. The recommended response was a shift from factor-driven growth to total-factor-productivity improvement, with ICT industry promotion chosen as both a strategic exit from the crisis and a long-term engine of productivity. The report cites the US restructuring of the late 1980s and early 1990s, when expanded ICT investment converted the US into the world’s most competitive economy, as the explicit benchmark.
The author, Senior Research Fellow Sangwon Ko of KISDI, ties the urgency to three drivers. The first is the crisis itself: unemployment rose from 2.6 % in 1997 to 7.0 % in 1998 and 6.5 % in 1999, and the MIC’s ICT HRD budget jumped from 6.5 billion won in 1996 to 59.4 billion in 1997 and 116 billion in 1998 — an 18-fold increase in two years. ICT retraining and conversion training for the unemployed was the largest single line item. The second driver is global benchmarking: the 1998 World Bank study finding that human-resource investment is more efficient than physical investment in a knowledge-based economy, and the US Department of Commerce estimate that a 10 % increase in education investment yields an 8.6 % productivity increase (about three times the return of capital investment). The third driver is the shortage forecast: OECD (1999) and IDC (1998) estimated the global shortage of ICT workers in 1997 at 600,000–700,000, with the US alone short 346,000–450,000. Korea chose to grow its way out of the crisis through ICT and built the HRD programme accordingly.
1.2 Where Korea was when the programme began
Korea in 1996 was a country that had built the Ministry of Information and Communication only two years earlier (1994), formed by extending the Korea Post Office and unifying previously dispersed government ICT functions. Internet penetration was low, ICT industry contribution to GDP was rising but still modest, and there was no dedicated ICT HRD fund. The legal foundation arrived in 1995 with the Framework Act on Informatization Promotion, and in January 1996 the Informatization Promotion Fund was established — a non-general-budget fund whose first revenues came from mandatory contributions of telecommunications operators under the Framework Act on Telecommunications. This was the institutional residue that mattered most: the fund made every later policy phase affordable.
| Indicator | 1996 | 1998 | 2000 | Source |
|---|---|---|---|---|
| MIC ICT HRD budget (billion won) | 6.5 | 116.0 | 79.5 | Table 2-1 |
| Unemployment rate (%) | 2.6 (1997) | 7.0 | — | Ch. 2 §2 |
| Internet users in Korea (million) | — | — | — | 3.1 at end-1999 → 24.38 at end-2001 (Ch. 1) |
| Estimated global ICT-worker shortage | — | 600,000–700,000 | — | Ch. 2 §2 (OECD 1999, IDC 1998) |
1.3 Aggregate outcomes the report claims
The report’s headline outcomes, accumulated across the four policy periods, are concrete enough to compare against the baseline above. Over 1997–2009 the ICT HRD program reached 413,336 beneficiaries across undergraduate (146,849), graduate (47,783) and retraining (218,704) tracks. The ICT industry rose to be the top contributor to Korean real GDP growth during 2000–2009, reaching 18.5 % of contribution to real GDP growth (Table 1-4) — up from 4.6 % in the 1990s. After 2003, when achievement criteria shifted from beneficiary counts to outcome measures, the employment rate of HRD-programme graduates rose from 73.6 % in 2008 to 79.2 % in 2012; in-field employment rate rose from 78.0 % to 89.0 %; industry-university collaboration projects rose from 1,082 to 2,073 in the same period; employer-satisfaction score rose from 84.0 to 88.8 out of 100.
1.4 International benchmarks
The report does not include a single comprehensive index table, but it gives benchmark figures at several points. ICT graduates as a share of all engineering undergraduates reached 53 % by 2000 — a figure the report identifies as the result of the deliberate post-crisis push. The career span of an ICT worker rose from 6.9 years in 2003 to 11.1 years in 2011 (MKE, 2008), an indicator the report uses for the value of retraining programmes. By 2009 the number of ICT-major university graduates was 30,631, or 47 % of all engineering undergraduate degrees. The Korean ranking on company-university cooperation, however, was 19th in 2001 and on industry-academia knowledge transfer 17th in 2002 (IMD) — the gap the linkage-period reforms of 2004–2007 were designed to close.
Inside the post-2000 expansion is one striking number: more than 40,000 ICT jobs vanished in 2001 alone, after the collapse of the dot-com bubble. The report records this directly but moves on quickly to the policy response. The 2001 collapse is the hidden reason for the 2003 pivot from quantitative expansion to qualitative linkage; chapter 4 reads more coherently if you keep that single sentence visible.
2 Policy Design — Background, Strategies, Periods
2.1 The strategic logic at the moment of design (1996–1998)
The strategic logic the report attributes to the late-1990s designers is in four moves. First, identify the ICT industry as the lead growth engine because the global benchmark (the US since the late 1980s) shows it returning total-factor-productivity gains larger than alternatives. Second, identify ICT human resources as the binding constraint on industry growth, citing both the shortage forecasts (Kwon & Oh, 1999) and the OECD 2002 framing that ICT HRD is "a main determinant of economic growth and social cohesion." Third, accept that the labour-market linkage between ICT firms and schools has the character of a public good — once built, all benefit, none will pay — and that therefore government must build it. Fourth, finance the programme from a non-general-budget source so that recessionary pressure on the general budget does not collapse exactly the retraining capacity needed when recession arrives.
2.2 The Informatization Promotion Fund as the design anchor
The Informatization Promotion Fund, created January 1996 under Article 33 of the Informatization Promotion Act of August 1995, was the institutional spine. Revenues came from three sources: mandatory contributions from telecommunications operators under the Framework Act on Telecommunications; government contributions and loans; and profits from operation of the fund. The principle, in the report’s words: "government funds collected by MIC through new common-carrier selection may as well be reinvested into MIC." The fund was split into a General Account (broadband network, public/regional/industrial informatization, ICT industry foundation) and a Research and Development Account (ICT technology development, skilled ICT resources, ICT standards, research foundation). After the large-scale informatization projects were completed in 2005 the General Account was abolished and the fund was renamed the ICT Promotion Fund, now focused on R&D. The legal basis was updated again in 2009 (ICT Industry Promotion Act) and the managing ministry has moved twice (MIC → MKE in 2008 → MSIP in 2013), but the fund has survived each transition.
2.3 Period-by-period objectives and strategies
The report divides ICT HRD policy into four periods. The boundaries are not just calendar; each marks a change in the underlying problem the government was solving.
| Period | Policy objective | Core instruments | Trigger |
|---|---|---|---|
| 1997–2000 Infrastructure building | Build infrastructure and expand the supply of ICT HRD | ICU establishment (1998); ICT model schools (30 universities); 13,000 school computer labs; SW-specialised high schools; 10,000 schools connected to broadband; retraining for crisis unemployment | 1997 IMF crisis + Framework Act on Informatization Promotion (1995) |
| 2001–2003 Quantitative expansion | Expand ICT major enrolment at universities to meet projected 99,000-worker shortage 2002–2006 | Enrolment quota expansion in ICT majors; MIC-funded ICT equipment and faculty if quota raised; ITRC programme expanded; ICU undergraduate school (2002); 10-Million Informatization Education Plan launched (June 2000) | Post-crisis demand for ICT growth + Kwon et al. (2001) shortage forecast |
| 2004–2007 Horizontal linkage strengthening | Resolve qualitative mismatch by linking universities to industries | SCM model (2003) + NEXT (2006); IT 839 strategy alignment; ITRC realignment (32 → 50); Hanium E2B platform (2004); IT SoC core-design nurturing (2004); Blue Ocean professionals project; Seoul Accord initiation (2008) | 2001 ICT-bubble collapse + 2004 KRIVET oversupply forecast |
| 2008–present Professional skills deepening | Move further upmarket: master’s/doctoral ICT specialists, SW specialists, convergence leaders, global mobility | New IT Strategy (2008): 10 trillion-won ICT-convergence industries, 1,000 ICT firms with 50bn-won sales, 10 global SW firms; mid-term ICT HRD plan (2010); ICT Convergence HRD Center; Seoul Accord formal operation (2008) | 2008 global financial crisis + government reorganisation (MIC → MKE) |
2.4 Strategy and system — the five-strand framework
Chapter 3 presents the strategy and system as a single, five-strand framework that operates across all four periods. The strands are: (1) infrastructure for ICT HRD (universal access to PCs and Internet in schools, public officials’ ICT training); (2) expansion of ICT human resources through formal educational institutions (universities, junior colleges, ITRC, ICU, SCM, NEXT, Seoul Accord); (3) retraining of ICT human resources (private training centres, MIC ICT Academies, voucher system, conversion education for the unemployed); (4) provision of basic ICT education to the public (the 10-Million Informatization Education Plan); and (5) institutional frameworks (labour-market forecasting, ICT certificate systems, classification systems). The fund disbursed across all five at once; the weights shifted by period.
2.5 Key legislation timeline
| Year | Statute / decision | Effect on ICT HRD |
|---|---|---|
| 1991 | Article 5, Law on ICT Research and Development | First statutory basis for an ICT promotion fund |
| 1994 | Establishment of MIC (extension of Korea Post Office) | Single ministry given consolidated ICT mandate |
| 1995 | Framework Act on Informatization Promotion | National-strategy framework; Informatization Promotion Fund authorised |
| 1996 | Informatization Promotion Fund established (Jan) | Fund operational; non-general-budget revenue stream |
| 1998 | Higher Education Act revised — graduate school without undergraduate | ICU established March 1998 |
| 2000 | Cabinet decision — 10-Million Informatization Education Plan (Jun) | Mass basic-ICT education across ten ministries |
| 2005 | Informatization Promotion Act amended | General Account abolished; fund renamed ICT Promotion Fund |
| 2008 | Government reorganisation (MIC → MKE) | Fund management transferred but fund continues |
| 2009 | ICT Industry Promotion Act enacted | New statutory basis for ICT Promotion Fund |
| 2013 | Government reorganisation (MKE → MSIP) | Fund management transferred again; fund continues |
The report’s strongest design idea — stated in chapter 3 §1.2 and again in chapter 6 §3 — is that the horizontal linkage between firms and schools is a public good whose absence is a textbook market failure. The two parties have no private incentive to build the system, so government must build it. This single framing legitimises every linkage instrument (SCM, NEXT, Hanium, Seoul Accord) the 2004–2007 period produced.
3 Implementation — The Four Periods in Detail
3.1 Implementation structure evolution
The implementing structure changed four times in fifteen years but always rested on the same fund. The pattern: one lead ministry, one fund, multiple delivery agents, periodic reorganisation.
| Period | Lead ministry | Key delivery agents | Statistical body |
|---|---|---|---|
| 1994–1998 | MIC (newly formed) | ETRI, ICU (1998–), KADO, KICA | KISDI (founded 1985) |
| 1999–2003 | MIC | ETRI, ICU, KADO/AIIT, IITA, MIC ICT Academies | KISDI, KRIVET |
| 2004–2007 | MIC + MOE-HRD coordination | ITRC network (50 by 2007), Hanium, KAIT, ABEEK | KISDI, KRIVET, NABO |
| 2008–2012 | MKE (from MIC) | NIPA, KCA, NIA, Seoul Accord Secretariat | Sookmyung Women’s University ICAC, MSIP later |
| 2013– | MSIP | NIPA, NIA, ICT Convergence HRD Center | KISDI continuing |
3.2 Financing evolution — three phases of fund flow
Spending shifted with policy. In the infrastructure period (1997–2000), the budget rose from 65 hundred-million won in 1996 to 1,160 hundred-million won in 1998 (an 18-fold rise). The largest line item was retraining for the crisis-unemployed: ICT retraining budget moved from 11 bn won (1997) to 51.4 bn (1998) to 36.6 bn (1999) and back to 12.3 bn (2000). Of the 1997–2000 ICT HRD budget, more than 50 % went to equipment and facilities at formal educational institutions, with research expenses (including scholarships) and training costs filling out the rest.
In the quantitative-expansion period (2001–2003), spending focused on enrolment-quota expansion at universities (the MIC subsidised ICT equipment and faculty for any university that raised its ICT quota), the establishment of the ICU’s undergraduate school (2002), and the 10-Million Informatization Education Plan (2000–2002). The plan involved ten ministries jointly and reached 13.85 million people by June 2002.
In the horizontal-linkage period (2004–2007), spending moved up the skill ladder. ITRC support to master’s and doctoral programmes reached up to 800 million won per centre for up to 8 years; the number of ITRCs grew from 32 to 50; the IT SoC Core Design Professional Nurturing project began in 2004; the Blue Ocean ICT Professionals Project funded the IT SoC, embedded software, robotics and digital broadcasting sub-areas; NEXT funded curriculum revision and internship expansion. Across all four periods, the report identifies the Informatization Promotion Fund as the financing instrument that made multi-year planning possible.
3.3 Implementation cases — four programmes worth reading in detail
▶ The Information and Communications University (ICU), founded March 1998
ICU was a graduate-only institution at its founding (the Higher Education Act was revised in December 1995 specifically to allow a graduate school without an undergraduate school). Initial admission quota: 210 — 130 master’s and 50 doctoral in information / communication / electronic engineering, plus 30 master’s in industrial engineering. Budget for establishment and operation: 101 billion won. The government covered 45 bn construction plus 4 bn reserve from the Informatization Promotion Fund; major telecom service providers raised 40 bn operational fund and 12 bn laboratory facility cost. ICU was established as a subsidiary of ETRI to link research to education tightly. The institutional move was visible in the statute: the report quotes the revised Framework Act on Telecommunications, which authorised ETRI to establish a graduate school and required telecommunications service operators to contribute to such institutes if necessary.
▶ The Information Technology Research Center (ITRC) programme
The ITRC programme, the report’s most representative high-end HRD instrument, began in 2000 with 25 centres. Sixteen were converted from two earlier programmes (eight from the "Fund for Hiring Professors Fully in Charge of ICT Research," eight from the "University S/W Research Center Support Program") and nine were newly selected from a competitive pool of 33 applicants. The report flags an early-design honesty problem: the sixteen converted centres all passed evaluation with scores above 80, but six were later dropped by 2005 — the conversion-without-competition created moral hazard the strict evaluation language obscured. Funding was generous: 90 % of research expenses for graduate students were government-funded; the remaining 10 % from universities. Top-down (government-designated) centres received 0.8 bn won per year for up to 8 years; bottom-up (applicant-chosen) centres received 0.5 bn won per year for up to 6 years. Interim evaluations every two years dropped the bottom 10–20 %. By 2007 there were 50 ITRCs.
▶ The 10-Million Informatization Education Plan (June 2000–June 2002)
The Cabinet decision of June 2000 launched a two-year mass-mobilisation. Target: 11.13 million people, more than 20 % of the Korean population. Lead body: MIC plus nine other ministries jointly. Target groups: housewives (2.0 m), local residents (1.6 m), workers (1.5 m), students (3.36 m), teachers (615 k), soldiers (740 k), public officials (510 k), employees of public corporations (200 k), the disabled (207 k), senior citizens (171 k), farmers (171 k), fishermen (20 k), inmates (32 k). Actual reach by June 2002: 13.85 million people — 25 % of the population, overshooting on local residents (5.36 m vs. 1.6 m target), senior citizens (443 k vs. 171 k), teachers (1.11 m vs. 615 k) and inmates (120 k vs. 32 k); under-shooting on disabled (101 k vs. 207 k) and housewives (434 k vs. 2.0 m). Korean Internet users rose from 3.1 million (22.4 % of the population) at end-1999 to 24.38 million (56 %) at end-2001.
▶ The Supply Chain Management (SCM) model, NEXT, and the Seoul Accord
The SCM model, introduced in 2003 and reinforced into NEXT in 2006, is the report’s clearest illustration of how to build the linkage public good. In the report’s own words: "The essence of the SCM model is the creation of a systematic mechanism in which industries provide the skill requirements on human resources to regular educational institutions, and in turn, such skill requirements are properly reflected to educational curricula. Subsequently, industries hire, on a priority basis, human resources trained in conformity with those requirements" (Ko, 2011b, p. 155). The Hanium online platform (2004) operationalised this with 3,000 industry experts from 1,700 ICT companies serving as student mentors; the Seoul Accord (2008) added an international accreditation layer. The achievement metrics shifted in line with the strategy: in-field employment rate of HRD beneficiaries reached 89 % by 2012, employer satisfaction 88.8/100, industry-university projects 2,073.
The retraining-voucher scheme of the late 1990s and early 2000s funded ICT training at private centres, but the report acknowledges the moral-hazard problem openly: some trainees collected vouchers and split government subsidies with private centres without actual training (Ch. 3 §1.3, Ch. 4 §1.3). The implementing body had to add monitoring at extra cost. The lesson the report draws — voucher programmes should be planned with extra supervision cost from day one — is one of the few unambiguous warnings in the document.
4 Outcomes — What the Programme Delivered, and What It Cost
4.1 Programme reach by period
Table 1-5 of the report aggregates the headline reach of the ICT HRD program over 1997–2009: 413,336 beneficiaries across undergraduate (146,849), graduate (47,783) and retraining (218,704) tracks. The retraining numbers reflect the post-crisis surge: 185,809 retraining beneficiaries in 1997–2002 alone, falling to 3,856 in 2009 as the urgency receded. By 2009 the 12,820 undergraduate beneficiaries represented roughly one-third of all Korean university graduates majoring in ICT at undergraduate level (30,631 total). One out of every three undergraduate ICT students has chosen their major partly because of government HRD support.
| Period | What was delivered | Key figure | What was less successful |
|---|---|---|---|
| 1997–2000 Infrastructure | 13,000 school computer labs; multimedia devices to 214,000 classes; PCs to 340,000 teachers; all 10,000 schools internet-connected | Korea was "the first country in the world" with universal school broadband by end-2000 | Overlap between ministries; specialisation of ICT sectors not yet possible; the "hot ICT skills" programme was reactive, not strategic |
| 2001–2003 Quantitative expansion | ICT undergraduate enrolment up to 53 % of all engineering graduates by 2000; ICU undergraduate school established 2002 | 1997–2002 retraining alone: 185,809 beneficiaries | 2001: 40,000+ ICT jobs vanished after dot-com collapse; ICT major credits fell from 84 (2002) to 66 (2003); KRIVET (2004) projected oversupply of 15,226 bachelor-level workers |
| 2004–2007 Horizontal linkage | 50 ITRCs (up from 32); SCM model in 23 universities by 2007; Hanium 3,000 mentors / 1,700 firms / 20,000 students; IT SoC programme; Seoul Accord initiated | Average company spend on re-educating new hires above 10 million won per person over 2 years (a metric the linkage strategy aimed to reduce) | IMD ranking of company-university cooperation: 19th (2001), 17th (2002) — visible improvement only partial by end of period; SW industry still lagging HW |
| 2008– Professional deepening | Employment rate 73.6 → 79.2 %; in-field employment 78.0 → 89.0 %; industry-university projects 1,082 → 2,073; employer satisfaction 84.0 → 88.8/100 (Table 1-6) | Career span of ICT worker: 6.9 years (2003) → 11.1 years (2011); ITRC programme generated 7,108 papers and 14,196 patents by 2012 | SW workers’ average service years 5.1 vs. HW 6.8 (2008); SW relative income persistently below HW (Figure 5-2); the "half success" of software-skills policy |
4.2 Macro outcomes — ICT industry and the wider economy
The ICT industry’s share of contribution to Korean real GDP growth rose from 4.6 % in the 1990s to 18.5 % in 2000–2009 (Table 1-4) — the largest single contributor of any industry in the latter period. The programme cannot claim sole credit for that shift; what it can claim is the continuous supply of trained workers to the industry as the industry expanded. Between 1998 and 2003 SW and computer-service industry employment rose from 46,171 to 114,251 (Table 2-3). ICT-industry employment overall fell sharply between 2000 and 2001 (the 40,000-job collapse) but stabilised through the subsequent retraining wave.
4.3 Digital-divide outcomes
The 10-Million Informatization Education Plan delivered measurable closure of the digital divide. Table 1-11 of the report shows beneficiaries vs. non-beneficiaries on four indicators in 2003: computer utilisation rate 99.8 % (beneficiaries) vs. 69.1 % (non-beneficiaries), a 30.7-point gap; internet usage 92.7 vs. 63.0, a 29.7-point gap; hours of use 89.1 vs. 63.8 minutes; personal website ownership 24.0 vs. 7.8 %. The 1999 baseline (Table 3-1) had farmers and fishermen at 2.9 % computer use, housewives at 10.9 %; the post-plan numbers were qualitatively different. Korean Internet users rose from 3.1 million at end-1999 to 24.38 million at end-2001.
4.4 The achievement-criteria switch (a quiet but important outcome)
Until 2003, ICT HRD programme success was measured by beneficiary headcount (Table 1-5). From 2003 onward, with the criteria switch the report describes, success was measured by employment rate, in-field employment rate, industry-university project count, and employer satisfaction (Table 1-6). This is a quiet outcome but a substantive one: a programme that measures itself by outputs (graduates produced) and a programme that measures itself by outcomes (graduates employed in their field, valued by employers) make different choices about curriculum, partnership, monitoring and termination. Korea’s ability to make the switch is partly attributable to KISDI and KRIVET having the data on the outcome side.
4.5 What did not work — the report’s own qualifiers
The report includes a chapter (5 §2) titled "Case of Software Skills Nurturing Policy: Half Success." The report’s framing of the SW case is unusual for the document and worth reading attentively. Three stylised facts are reported: (a) in-field employment rate of SW majors is lower than HW majors; (b) SW worker shortage rate is higher than HW; (c) SW worker income level and job stability are lower than HW. The report’s policy-direction conclusion is that simple supply-side training is insufficient — the SW industry has to generate higher value-added before more training will reduce the shortage. If the policy direction is to keep increasing graduate supply, the income gap will widen. The half-success language is rare in Korean ICT HRD self-assessment; it is a counter-current within the larger success narrative and a useful entry point for critical reading.
The report tucks much of what would be the most useful evidence for transferability — the SW labour-market diagnosis — into a chapter labelled as an exception. A more critical reading is that the SW pattern (oversupply paired with low wages and shortage signals) is the generic risk of any supply-side ICT HRD policy lacking demand-side investment. The Korean "half success" framing presents it as a particular sub-sector problem; for many developing countries it is the most likely outcome of the whole approach.
5 Lessons — The Report’s Stated Success Factors and Their Boundary Conditions
5.1 The three success factors the report identifies
Chapter 5 of the report names three success factors of the ICT HRD policy as a whole: (1) changes in government organisational structure in response to ICT market and technology shifts; (2) balanced development of basic, applied and professional ICT skills; (3) establishment of a goal-strategic-goal-performance-goal-evaluation system. The first concerns the willingness to reorganise ministries (MIC → MKE → MSIP); the second concerns the portfolio approach across the OECD’s three tiers; the third concerns the use of explicit mission-vision-strategy chains (Figure 5-1 maps the 2012 programme’s mission, vision, four strategic goals, performance goals and detailed projects on a single diagram).
5.2 Stage-by-stage success factors
▶ Period 1 (1997–2000) — the fund as the success factor
For the infrastructure period, the report’s own summary row identifies "Securing stable financial sources for ICT HRD by establishing the ICT Promotion Fund" as the success factor (Table 4-1). Three supporting factors: the 1997 IMF crisis as an urgency unlocking unusual political support; the Framework Act on Informatization Promotion (1995) as a pre-existing legal anchor; and MIC’s 1994 consolidation, which gave a single ministry the mandate to act fast.
▶ Period 2 (2001–2003) — enrolment expansion and the 10-million plan
For the quantitative-expansion period, the report identifies coordination across ten ministries on the 10-Million Informatization Education Plan as the key strength, plus the willingness to use ICT HRD as a counter-cyclical instrument when the dot-com bubble collapsed. The 2001 collapse is treated as a limitation factor, not a success factor; the recovery through retraining is the success-side reading.
▶ Period 3 (2004–2007) — IT 839 alignment
Table 4-11 identifies "Harmony in IT 839 strategy and ICT HRD policy" as the success factor for the linkage period. The mechanism: the industrial strategy was named in 2004 with 8 services / 3 infrastructures / 9 growth engines, the ITRC programme was realigned to those targets, NEXT and the SCM model funded curriculum response, the Seoul Accord was initiated for international accreditation. The named alignment of HRD to a published industrial strategy is the period’s defining institutional achievement.
▶ Period 4 (2008–) — the convergence pivot
For the professional-deepening period, the report identifies the New IT Strategy (2008) of MKE — ten ICT-convergence industries worth 1 trillion won each, 1,000 ICT firms with 50 bn won in sales, 10 global SW firms — as the strategy giving HRD policy a target. The mid-term ICT HRD plan of 2010 added five key initiatives: demand-customised highly-educated resources, firm participation in HRD, employment-linked HRD, overseas-market human network, statistical reliability. The report is more cautious about the period’s outcomes because the data series ends only a few years later, but employment-rate and employer-satisfaction trends are positive.
5.3 The transferability table the report builds for developing countries
The transferability assessment is implicit in chapter 6 rather than explicit. We reconstruct it from the report’s text below.
| Korean instrument | What transfers | Pre-conditions | Common failure mode if absent |
|---|---|---|---|
| Informatization Promotion Fund | The dedicated-fund principle | A non-general-budget revenue source (telecom levy, spectrum auction, ICT industry contribution) | Fund raided in next budget cycle; programmes terminate |
| SCM/NEXT linkage model | The institutional channel between industry skill requirements and university curricula | Domestic ICT industry willing to commit to specifications; accreditation body of national stature | Universities produce graduates with no employer demand; mismatch persists |
| 10-Million Informatization Education Plan | The mass-mobilisation logic, the per-group target structure | Multi-ministry capacity to disburse against a single plan; basic digital infrastructure in target areas | Elite ICT capability rises while digital divide widens |
| KISDI/KRIVET labour-market forecasting | The public-statistics body and the criteria-of-achievement framework | Multi-year budget commitment to one host institute; cultural willingness to act on adverse forecasts | Policy lurches between supply expansions and supply contractions on outdated forecasts |
| IT 839 and ITRC alignment | The principle of mapping HRD instruments to named industrial-policy targets | A published industrial strategy with specific products / services; ITRC-like funding instrument that can be re-targeted | HRD produces graduates the country has no plan to employ |
5.4 Six key success factors at the programme level
- A dedicated fund with a non-general-budget revenue source — the Informatization Promotion Fund / ICT Promotion Fund — which survived three ministry reorganisations.
- One lead ministry with consolidated ICT mandate — MIC after 1994; transferred but not split when MIC was dissolved in 2008.
- A statistical infrastructure — KISDI, KRIVET, classification systems, repeated forecasts — that can change policy direction when its findings warrant.
- A horizontal-linkage channel — SCM / NEXT / Hanium / Seoul Accord — that turns the public-good linkage problem into a buildable institution.
- Balanced portfolio across basic, applied and professional skills — mass internet education alongside ITRC / ICU.
- Explicit alignment to industrial policy — each HRD instrument has a named industry target; alignment is documented (Figure 4-1) and reviewed.
5.5 Boundary conditions for transfer
The report’s "half success" SW case (chapter 5 §2) provides the clearest implicit statement of boundary conditions: supply-side ICT HRD does not work without demand-side investment. If the domestic ICT industry is too small or too low-margin to absorb the supply, increased training drives wages down and produces emigration rather than retention. Korea had the demand side largely in place by the mid-1990s (Samsung, LG, the rising semiconductor industry); developing countries copying the supply-side framework without that demand foundation are likely to reproduce the SW "half success" across all sub-sectors, not just one. A second boundary condition is administrative continuity: the Korean fund survived because the senior civil service tolerated reorganisations without disruption to the underlying instrument; in more politically volatile contexts, the statute protecting the fund must be drafted defensively.
What travels reliably is the institutional architecture — dedicated fund, statistical body, linkage channel, balanced portfolio, named alignment. What does not travel reliably is the macroeconomic context (post-crisis political will, growth above 6 % for a decade, an already-strong ICT manufacturing base) and the assumption that demand-side ICT industry exists. Build the architecture first; treat the macro tailwind as a hypothesis to be tested in your own country, not a given.
6 Conclusion — Overall Assessment and the Unfinished Agenda
6.1 Overall assessment
The aggregate outcome is undeniable: by 2012, 413,336 ICT HRD beneficiaries had cycled through the programme over 15 years, the ICT industry had risen to 18.5 % of contribution to real GDP growth, in-field employment of HRD graduates had reached 89 % and employer satisfaction 88.8/100, the Internet had spread from 22 % to over 80 % of the population, and one fund — the Informatization Promotion Fund of 1996 — had financed almost everything across three ministries. The cost is also visible but less prominent in the report: the 2001 dot-com collapse erased over 40,000 ICT jobs in a single year and remains the loudest counter-fact in the document; the SW labour market saw wages below HW and shortage rates above HW for the entire period; voucher-system moral hazard required extra monitoring spend; the digital divide closed faster than predicted but not for all groups (housewives reached 434k against a 2m target). A balanced one-sentence summary would say: Korea turned a 1997 economic crisis into the funding rationale for a 15-year ICT HRD programme whose institutional architecture (fund, statistical body, linkage channel, balanced portfolio) outlasted four policy phases and three ministry reorganisations; the speed and scale produced visible mismatches in the SW labour market and persistent gaps in basic-literacy coverage that the report acknowledges but does not solve.
6.2 Constraints and how Korea addressed them
| Constraint | Korean response | Honest verdict |
|---|---|---|
| No stable funding for ICT HRD before 1996 | Establish Informatization Promotion Fund (1996); fund it from mandatory telecom-operator contributions; protect it through three ministry reorganisations | Worked because Korea’s telecom sector was profitable and mandatorily contributable; not all countries have either condition |
| Quantitative supply ahead of qualitative demand | SCM model (2003) + NEXT (2006) + Hanium (2004) + Seoul Accord (2008) — four shapes of the linkage public good built together | Largely worked; the in-field employment rate moved from 78 % to 89 % in 4 years; requires domestic industry willing to commit to specifications |
| Risk of falling behind on basic ICT literacy | 10-Million Informatization Education Plan (2000–2002): 13.85 m people reached against an 11.13 m target, joint across 10 ministries | Worked at scale but uneven by group (housewives under-target, soldiers over-target); the fund made the multi-ministry execution affordable |
| Risk of obsolete skills as ICT changes fast | Continuous retraining vouchers; MIC ICT Academies; conversion training for the unemployed; ICT-worker career span rose from 6.9 to 11.1 years | Worked but moral-hazard cost emerged; the lesson on voucher supervision is one of the few unambiguous warnings the report supplies |
| HRD divorced from industrial policy | IT 839 strategy (2004); ITRC realignment to the 3 infrastructures and 9 growth engines; named industry targets in every period | Highly transferable as principle; the specific Korean industrial-policy menu (manufacturing-led) is not |
6.3 The unfinished agenda
The report ends in 2013 with three open agenda items. The SW labour market remains a half success: in-field employment rate of SW majors lower than HW, shortage rate higher, income lower, average service years shorter. The report’s recommendation (raise SW industry value-added before raising SW worker supply) is correct but not yet operationalised. The basic-literacy coverage is not yet universal: the 1999 baseline survey had farmers and fishermen at 2.9 % computer utilisation; the 10-million plan moved them substantially but the report does not give a closing-year figure for those groups specifically. The convergence pivot is in motion but not yet measured: the 2008 New IT Strategy named ICT convergence as the next frontier but the report’s data series ends before the strategy’s targets (10 trillion-won industries, 1,000 mid-size firms, 10 global SW firms) could be assessed.
6.4 What the Korean ICT HRD experience really teaches
The strongest reading of the report is not that Korea succeeded by training many ICT workers — that is the report’s preferred reading, but it works only because it understates the role of the 1997 macroeconomic shock that made the training affordable. The stronger reading is that Korea succeeded because each policy phase produced an institutional residue that survived the next policy phase: the Informatization Promotion Fund outlasted MIC, the SCM model outlasted the linkage period, the labour-market forecasting habit at KISDI/KRIVET outlasted MIC and MKE. Programmes are visible; institutions accumulate; the institutions are what travels. The 1997–2013 four-period chronology is a story told from the surface; underneath, one fund, one statistical habit and one linkage logic carried the whole.
If you have one week back in your office, do not draft the list of ICT training courses to fund. Draft the statute that will outlast you. Korea’s ICT HRD programme produced 413,336 beneficiaries on top of a fund whose revenue source did not depend on the general budget, whose legal basis could be updated without abolition, and whose disbursement covered five strands at once (infrastructure, formal education, retraining, mass basic education, statistics/forecasting). Without that one-page statute the same 413,336 beneficiaries and the same instruments would have been the work of three or four short-lived programmes, not a national HRD machine.
6.5 First action — concrete and specific
This week, write a single page on the financing instrument your country uses for ICT HRD. Two questions: does it depend on the general budget that is competed for annually, or does it have a dedicated revenue source? And who has authority to abolish it, the cabinet or the legislature? If the answers are "general budget" and "cabinet," you have an annual programme, not a multi-year institution. The page is the seed of every later decision — fund design, statistical body, linkage channel, portfolio balance, industrial alignment. Most ICT HRD programmes that have failed in the last twenty years failed not on training quality but on the absence of this page.
This Companion is a learning aid produced for the Ministry of Strategy and Finance · KDI School of Public Policy and Management, KSP Knowledge Sharing Program — ICT Human Resource Development Policy (2013). Use alongside the original report.
What This Report Does Not Say
1 Success Bias — What the Report Says and What It Leaves Out
The purpose of this report is "to share Korea's success with developing countries." Look for the traces that purpose has left in the text. A purposeful text always makes choices about what to include and what to omit. A report having success bias does not mean it lies — it means it selects. Reading well is reading what is selected against.
| What the report says | What the report does not say |
|---|---|
| "ICT graduates reached 53 % of all engineering graduates by 2000 — a quantitative success" | The same expansion produced the 2001 collapse: more than 40,000 ICT jobs vanished in a single year after the dot-com bubble burst. By 2004 KRIVET was projecting an oversupply of 15,226 bachelor-level ICT workers. The 53 % share is presented as a success indicator; it is also the leading indicator of the oversupply. |
| "The Informatization Promotion Fund was the success factor of the 1997–2000 period" | The fund worked partly because the 1997 IMF crisis created political room for an 18-fold budget increase in two years (6.5 → 116 billion won). Without the crisis, the fund would have grown linearly at best. The report names the fund as the success factor and tucks the crisis-as-enabler into background. |
| "Korea took a balanced approach to basic, applied and professional ICT skills" | Inside the balance, the 10-Million plan reached 434k housewives against a 2m target — 22 % of plan — while soldiers were reached at 84 % of plan. The mass-mobilisation worked unevenly across population groups in ways the chapter-1 narrative does not unpack. |
| "The case of software skills nurturing policy: half success" (chapter 5 §2) | The chapter labels SW as an exception, but the SW pattern — in-field employment lower than HW, shortage rate higher, income lower, service years shorter — is the generic signature of supply-side training without demand-side investment. Treating it as exception rather than rule conceals the most important lesson for developing countries. |
| "The voucher system fostered competition between training centres and raised quality" | The same chapter admits moral-hazard problems were reported in practice: students and centres colluded to receive subsidies without training. The implementing body had to add monitoring at extra cost. The voucher idea works; the supervision cost the original design omitted is the part that matters for transfer. |
Find Success Bias for Yourself
For each pattern below, find one quotation from the report, write it down, and write the question that hides behind it.
| Pattern of statement | What to look for in the report |
|---|---|
| Achievement stated, cost omitted | Find a sentence with "successfully" or "rapidly". Then ask what the human, fiscal or opportunity cost was — the 2001 ICT-job collapse (40,000 jobs in one year) is the clearest example; the report mentions it but moves on. |
| Crisis-driven choice reframed as design | The 18-fold budget increase 1996–1998 is presented as evidence the fund worked. Re-read it as a description of crisis politics that created unusual room for action. Does the framing change the transferability assessment? |
| Industry-driven curriculum framed as university ownership | The SCM model (chapter 4 §3) is described as universities reflecting industry skill requirements. Re-read it as industries setting curricula. Whose curriculum is it? |
| Counter-evidence relegated to a sub-chapter | Chapter 5 §2 ("Case of Software Skills Nurturing Policy: Half Success") is the report's clearest counter-narrative. Read it first, then read chapter 4 against it. The chapter 5 §2 pattern fits more sectors than the report admits. |
| Macro context conflated with policy effect | The report attributes ICT-industry GDP contribution (18.5 % in 2000s) to HRD policy. Korean GDP grew 6–8 % during this period; the semiconductor industry was rising independently. How much of the "HRD success" is the policy and how much is the wider growth wave the country was riding? |
2 Check Your Understanding
Answer the questions below to check your grasp of the report and this Companion.
3 Scenario Writing — What Would You Have Done?
This scenario presents an implementation barrier encountered in the field. The goal is to engage with real-world complexity, not textbook solutions. Read the questions below and write your response freely. Nothing you write is saved or shared.
Scenario
You are Daniel Asante, a 44-year-old Director of ICT Workforce Policy in the Ministry of Communications of a lower-middle-income country. Your country has just emerged from two years of inflation-driven recession; unemployment among university graduates is at 18 %. The President has announced an "ICT for Jobs" initiative, modelled explicitly on Korea's 1997–2000 post-crisis expansion, with a target of 60,000 new ICT-trained workers over four years and a proposed budget of USD 220 million. The cabinet wants the framework legislation on the floor of the legislature within twelve weeks.
Three pressures arrive on the same Wednesday. The Minister of Finance writes that the budget cannot be financed from the general account; she asks whether a dedicated fund (modelled on the Korean Informatization Promotion Fund) is feasible, and where its revenue source would come from in a country whose telecommunications sector is partly state-owned and lightly profitable. Separately, the Director of your national statistics agency telephones to say that there has never been an ICT-labour-market forecast in your country; the most recent enrolment data is from 2019; the agency would need 18 months and USD 1.5 million to build the data layer that Korea's KISDI/KRIVET produces routinely. The President's political advisor, who reports directly to the cabinet, separately asks whether you can accept the 60,000-worker target without the statistical infrastructure — "Korea did not wait for perfect data in 1998, why should we?"
The Minister wants your recommendation by Friday. The legislature wants the bill in twelve weeks. The statistics director wants a budget line. What do you write?
Core Tensions in This Scenario
| Conflicting Values | Fundamental question |
|---|---|
| Crisis-speed action vs. data-driven design | Korea's 1998 18-fold budget increase worked partly because it preceded perfect data and partly because the macro tailwind was already there. Without the same tailwind, is crisis-speed action the correct lesson — or is it the warning? |
| Dedicated fund vs. realistic revenue source | Korea's fund was financed by mandatory telecom-operator contributions in a profitable telecom sector. Without a profitable domestic telecom sector, what alternative non-general-budget revenue source can carry the fund — spectrum-auction proceeds, an ICT-industry levy, a portion of a development tax — and which of these is politically passable in twelve weeks? |
| Supply expansion vs. demand verification | The Korean "half success" SW case suggests supply-side training without demand-side investment produces low wages and emigration. Should the 60,000-worker target be reduced until industrial-policy commitments are in hand, or should training proceed on the bet that demand will follow? |
Connection to Korean Experience
Daniel's situation is close to the situation Korea was in late 1997, with three differences. First, the Korean response to the IMF crisis benefited from an industrial base (semiconductor, mobile, LCD) that was already growing 6–8 % annually; absent that tailwind, the same expansion produces different outcomes. Second, the Korean Informatization Promotion Fund (1996) had its statutory basis in place before the crisis; in Daniel's twelve-week window the statute is being drafted under crisis pressure with the legal-defensive provisions improvised. Third, KISDI and KRIVET had been producing ICT-labour-market data for years before the crisis allowed Korean policymakers to act on it; the "Korea did not wait for perfect data" framing the political advisor offers omits the fact that Korea already had usable data.
Re-read the scenario above and write down — on paper or in a document — how you would act if you were Daniel. There is no right answer. Draw on your own experience and home-country context; aim for 50–100 words.
Questions to consider — ① Would you accept the cabinet's 60,000-worker target and 12-week legislative timeline, or counter-propose a 36-week phased timeline with a smaller initial target tied to industrial-policy commitments — and how would you defend either choice to the President? ② What non-general-budget revenue source for the fund would you propose in your country (spectrum-auction proceeds; ICT-industry levy; portion of a development tax; partial telecom-operator contribution) and which existing statute could be amended in 12 weeks to host it? ③ Would you accept the political advisor's "Korea did not wait for perfect data" framing, propose the 18-month statistical build with a budget commitment, or pursue a 6-month rapid-data-collection compromise — and how does each choice affect the credibility of the 60,000-worker target? ④ Have you seen a crisis-driven ICT or workforce programme of this scale in your own country? What did the responsible official obtain, and what concession surprised you in retrospect?
4 Assignments
- a.Summarise the chosen passage in 3–5 sentences. Quote one original sentence and identify exactly where that material appears — or fails to appear — in the main outcomes narrative of chapter 4.
- b.Is this issue specific to Korea, or could it occur in a similar form in your own country? Compare against one specific case from an ICT workforce or vocational programme you know.
- c.Why do you think the report places this material in a sub-chapter or background paragraph rather than in the main outcomes? What would change in the reader's overall impression if it were moved into the main outcomes chapter?
- a.Choose one Korean institution or instrument that corresponds to your type — the Informatization Promotion Fund, the SCM/NEXT linkage model, the 10-Million Informatization Education Plan, KISDI/KRIVET labour-market forecasting, or IT 839/ITRC alignment — and evaluate its transferability along three dimensions: legal basis, governance, technical capacity.
- b.What must absolutely be modified before transfer, and what can be imported substantially as-is?
- c.Write the "First Action" in one sentence. It must specify a responsible person, a deadline, and one success metric.
- ①Current diagnosis — which of the five problem types applies, with evidence from the report and from country data
- ②Two or three Korean institutions or instruments worth learning from — why these, with transferability assessment
- ③Transfer conditions and required modifications — what to change from the Korean original, and why; pay special attention to the demand-side question raised by the SW "half success" case
- ④Roadmap — what to do in years 1–2, 3–5, with the sequence justified; explicitly state which Korean period your country starts from (infrastructure / quantitative expansion / horizontal linkage / professional deepening)
- ⑤Limits of this report — what cannot be learned from it, and where you would look to supplement (especially on demand-side ICT-industry development and on the 2001 collapse pattern that the report under-analyses)
5 Further Reading
- Sangwon Ko (2011b), ICT Master Plan for Development: Lessons from Policy Practices of Korea, KISDI, Seoul. The single most-cited source inside the report — the lead author's own earlier book provides the detailed institutional reconstructions that the KSP report compresses; essential for any policy memo on Korean ICT HRD.
- Sangwon Ko (2010), The Informatization Promotion Fund, KISDI, Seoul. The detailed history of the Korean ICT HRD fund — statute, revenue sources, accounts split, three reorganisations. Necessary if you intend to design a Korean-style fund in your country.
- OECD (2002), "ICT Skills and Employment", in Information Technology Outlook 2002, OECD Publishing, Paris. The OECD framing the report cites repeatedly — ICT HRD as a main determinant of growth and social cohesion. Read it for the international comparative context the KSP report does not fully supply.
- Namhoon Kwon and Jungsook Oh (1999), "Demand and Supply Conditions of IT Professionals and IT HRD Policies in Selected Countries", KISDI. The shortage-forecast paper that underwrote the 1998 budget increase. Reading it makes the political economy of the 1997–2000 period legible — forecasts drove the political conversation, not the other way around.
- Sangwon Ko, Hayun Kang et al. (2012b), ICT Master Plan for Development (III), KISDI, Seoul (in Korean). The 2012 update covering the 2008 New IT Strategy and the convergence pivot; valuable for understanding how the report's final period was being designed even as the report was being written.
- NABO (2006), Evaluations of Advanced ICT Professionals Nurturing Programs, National Assembly Budget Office, Seoul. The legislative-evaluation document on the ITRC programme — including the candid record of which sixteen converted centres dropped out and why. The clearest example of the report's evidence base seen from outside the lead ministry.
- Mullan F. (2005), "The Metrics of the Physician Brain Drain", New England Journal of Medicine 353, pp. 1810–1818. Although focused on physicians, this is the most cited reference for the labour-market dynamics of skill drain from training-investing countries. Read it against the SW "half success" case for the comparative framing the KSP report omits.
This Companion is a learning aid produced for the Ministry of Strategy and Finance · KDI School of Public Policy and Management, KSP Knowledge Sharing Program — ICT Human Resource Development Policy (2013). Use alongside the original report.