South Korean government, led by President Lee Jae Myung, has pledged 100 trillion won (US$73 billion) in public-private funds to enhance AI investments.

However, South Korea’s aim to become a global leader in AI is facing challenges due to a significant outflow of talent, according to recent studies.

A report by the Korea Chamber of Commerce and Industry (KCCI) indicates that the number of Korean science and engineering professionals working abroad increased from 125,000 in 2019 to 129,000 in 2021.

During the same period, the number of foreign professionals entering Korea declined from 47,000 to 45,000, widening the net brain drain from 78,000 to 84,000.

Experts believe this trend has intensified since 2022, driven by rising global demand for AI talent.

The report highlights that for every 10,000 residents, 0.36 more AI professionals leave Korea than enter.

Key factors contributing to this outflow include rigid seniority-based pay systems, limited research infrastructure, and a lack of international collaboration opportunities.

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🔗 Source: Korea JoongAng Daily

🧠 Food for thought

1️⃣ Korea’s brain drain cycle repeats a historical pattern requiring systematic intervention

Today’s AI talent exodus isn’t South Korea’s first brain drain crisis. In the 1980s and 1990s, Korea successfully reversed a similar scientific exodus through government-organized efforts under President Park Chung-Hee 1.

The reversal then relied on establishing strategic R&D institutions and implementing legal reforms specifically designed to empower returning scientists with material benefits and research autonomy guarantees 1.

This historical precedent shows Korea has overcome talent outflows before, but through systematic approaches rather than isolated initiatives or simple funding increases.

The current situation appears more severe, with Korea ranking 35th out of 38 OECD countries in AI talent retention, losing 0.36 AI experts per 10,000 residents 2.

What makes this cycle different is the global competition intensity. Countries like Luxembourg, Germany, the United States, and Canada are all implementing targeted strategies to attract precisely the same talent Korea is losing 2.

2️⃣ The economic cost of talent drain extends far beyond lost innovation

Each departing Korean AI professional represents a substantial economic loss that undermines the country’s massive AI investment plans.

The government spends approximately 214.83 million won educating each college graduate, and loses an estimated 340.67 million won in lifetime tax revenue when that graduate pursues a career overseas—a combined loss exceeding 550 million won per person 3.

This financial drain creates a troubling paradox: Korea’s substantial 100 trillion won ($73 billion) AI investment could ultimately benefit foreign economies if the professionals trained through these resources continue leaving the country.

The situation is particularly concerning in biotechnology, where the percentage of Korean Ph.D. graduates remaining in the U.S. after studies rose dramatically from 20.2% in 1992-95 to 46.3% in 2000-03 4.

Beyond immediate financial losses, South Korean officials increasingly view this talent migration as a national security concern given the strategic importance of AI and semiconductor technologies in the global technological landscape 5.

3️⃣ University-industry partnerships offer a proven template for talent retention

The success stories of Pohang University of Science and Technology (POSTECH) and Sungkyunkwan University (SKKU) demonstrate how strategic corporate partnerships can transform educational institutions into talent magnets 6.

POSTECH, established by Pohang Steel Company, and SKKU, acquired by Samsung, evolved from traditional academic models into entrepreneurial universities that effectively retain talent through industry collaboration and research opportunities 6.

This “Corporate Helix model” creates environments where talented researchers can pursue cutting-edge work without leaving Korea, addressing a key driver of the current exodus 6.

The salary disparity between Korean and U.S. tech companies remains a significant barrier, with domestic firms struggling to match the compensation offered abroad—driving startups to relocate headquarters overseas to attract both investment and talent 7.

Addressing this gap requires not just higher salaries but structural reforms to workplace culture, including performance-based evaluations and flexible working arrangements that more closely match the environments offered by global competitors 8.

……