[Chatham House Roundtable] "To Attract Talent to Advanced Industries, Lifetime Earnings Must Exceed Doctors'"

Advanced Industries Need 'That Something' Preferred by MZ Generation
Declining School-Age Population and Growing Workforce Supply Shock
Government Projects Require Systems Beyond Individual Capabilities
Companies Have Money but Don't Spend, Regulations Must Be Eased for Easier Investment

Editor's NoteOn the 6th, a Chatham House roundtable was held at the Asia Media Tower in Jung-gu, Seoul, under the theme "Is the current state of university training for advanced industry talent acceptable?" Chatham House is the nickname for the UK's Royal Institute of International Affairs (RIIA), a top-tier research institution in the field of diplomacy and security. Attendees included Song Ki-chang, Professor Emeritus of Education at Sookmyung Women's University; Lee Kyu-seok, Associate Research Fellow at the Korea Economic Research Institute; Lee Yong-gil, Deputy Director of Industry-Academia Convergence Headquarters and Professor of Energy Resources Engineering at Inha University; Lim Sung-ho, CEO of Jongno Academy (Jongno Institute); and Hong Sung-min, Head of the Science and Technology Talent Policy Research Center at the Science and Technology Policy Institute (in alphabetical order).

At the "Asia Economy Chatham House Roundtable" held on the 6th at the Asia Economy conference room in Jung-gu, Seoul, attendees are sharing their opinions. (From the far left clockwise) Lee Gyuseok, Associate Research Fellow, Economic Research Department, Korea Economic Research Institute; Song Gichang, Professor Emeritus, Department of Education, Sookmyung Women's University; Lim Seongho, CEO of Jongno Academy (Jongno Hagwon); Lee Yonggil, Deputy Director of Industry-Academia Convergence Headquarters and Professor of Energy Resources Engineering, Inha University; Hong Seongmin, Director of Science and Technology Talent Policy Research Center, Science and Technology Policy Institute; Cho Youngju, Managing Editor of Politics and Society, Asia Economy. Photo by Kang Jinhyung aymsdream@

On that day, participants unanimously agreed that "expecting university graduates to be immediately usable in the industrial field is an overly high expectation by companies," and that "companies should be given incentives to cultivate talent themselves." This means deregulating and facilitating investment so that companies can create their own breakthroughs, such as establishing in-house graduate schools. To eliminate the phenomenon of medical school concentration, which is one of the causes of the shortage of advanced industry talent, they advised that "a trend should be created where advanced industries are preferred over becoming doctors," and "not only recruiting talent but also considering retention strategies after recruitment." To attract the practical and pragmatic MZ generation, it is necessary to clearly demonstrate that these jobs are better than being a doctor. As the shock to labor supply is expected to increase, they agreed that "universities, companies, and the government all need to consider how to properly manage and nurture incoming talent and systematize this," and that relying on specific projects by the Ministry of Education or individual capabilities is not feasible amid a declining school-age population. The Asia Economy Chatham House roundtable discloses the list of participants but anonymizes each speaker's remarks according to the 'Chatham House Rule.' The following is the full discussion transcript.

<Moderator> The shortage of advanced industry personnel is emerging as a critical issue. While the government and companies have roles to play, today we want to focus on universities. Please speak candidly about the role of universities in nurturing talent for advanced industries.

<Panelist A> Companies in key industries like semiconductors and batteries constantly complain about talent shortages. There are many job seekers, but few qualified talents. This is not a problem unique to Korea but arises as industries develop. Korea's rapid development in industries such as semiconductors, batteries, and artificial intelligence (AI) has intensified the problem. These industries are fiercely competitive because the countries that dominate the technology hold leadership for decades, making talent acquisition highly competitive. Since universities cannot create new departments every time a need arises, universities and industries need to coordinate their respective roles.

On the 6th, attendees are sharing their opinions at the 'Asia Economy Chatham House Roundtable' held in the Asia Economy conference room in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

"Expecting university graduates to be immediately usable in the industrial field is an overly high expectation"

<Panelist B> Universities teach established knowledge, which means they teach knowledge confirmed at least 3-4 years ago. Advanced industries move so fast that it is impossible to keep up. There is a significant gap between the advanced knowledge of industry practitioners and university professors. Teaching by professors has its limits, so the gap between industry and universities is inevitable. To establish a department, universities must secure quotas 2-3 years in advance, finalize curricula, and educate students for four years. This process takes at least 5-6 years. Ultimately, graduates learn knowledge that is already outdated. Expecting graduates to be immediately usable in the industry is an overly high expectation from the industrial sector.

<Panelist C> Departments such as shipbuilding, nuclear power, and convergence have received attention with every change of government. Under the current administration, semiconductor development is a core focus. Alongside the medical school issue, excellent related departments like semiconductors have been established. Samsung and SK Hynix are intensively nurturing talent, so interest in specific departments like semiconductors is higher than under any previous government.

<Panelist D> At universities, students' preference for departments related to semiconductors, AI, and batteries is clearly strong. Universities have been reducing quotas in unpopular departments to increase those in popular ones. The dismantling of barriers between departments and the concentration of students in departments with high industrial demand are accelerating. Departments entering a growth stagnation phase are in a difficult situation. Students prefer departments linked to large corporations' recruitment channels, but this is not the case for second- or third-tier suppliers or small and medium enterprises (SMEs).

<Panelist E> There are too many university graduates and insufficient jobs. While advanced industries like semiconductors and batteries have large companies offering decent jobs, second- and third-tier suppliers and SMEs lack attractive job opportunities. Job seekers prefer not to go there. Even advanced industry technical personnel have no desirable jobs to go to. The core of the job shortage issue must be well understood. Large companies lack core developers, who are not trained through university education alone. They need to understand both technology and the field. The same applies to AI. This is not a problem solvable by four years of university education. They need to accumulate experience and learn the field while receiving appropriate wages to stay with the company.

At the 'Asia Economy Chatham House Roundtable' held on the 6th at the Asia Economy conference room in Jung-gu, Seoul, attendees are sharing their opinions. (From the far left clockwise) Lee Gyuseok, Associate Research Fellow, Economic Research Department, Korea Economic Research Institute; Song Gichang, Professor Emeritus, Department of Education, Sookmyung Women's University; Lim Seongho, CEO of Jongno Academy (Jongno Hagwon); Lee Yonggil, Deputy Director of Industry-Academia Convergence Headquarters and Professor of Energy Resources Engineering, Inha University; Hong Seongmin, Director of Science and Technology Talent Policy Research Center, Science and Technology Policy Institute; Jo Youngju, Managing Editor of Politics and Society, Asia Economy. Photo by Kang Jinhyung aymsdream@

<Moderator> Recently, the concentration on medical schools has become more pronounced at universities. Companies also seem to be demanding adjustments to university department quotas.

<Panelist B> Companies view universities as talent supply institutions. From a company's perspective, this is understandable, but universities cannot see themselves that way. For continuity, universities must maintain quotas in humanities and social sciences where employment is low and keep unpopular departments. Usually, quotas for popular departments are increased. Medical school quotas must be adjusted to break vested interests. Increasing quotas will reduce competition and thus decrease demand for medical schools. Since becoming a doctor guarantees the future, loosening medical school quotas is a primary task.

Better treatment than doctors will lead to preference for advanced industries

<Panelist C> There are about 3,000 medical students nationwide, and there is a movement to increase this number due to shortages. It is questionable whether the current quota is appropriate or insufficient, as there is no precise data. Seventy percent of the 3,000 are from provincial areas. Seventy percent of doctors are trained in provinces, yet provincial hospitals lack doctors. Not all of them open private clinics. Semiconductor-related departments admit about 1,600 students annually; 500 are mostly from prestigious universities, and Samsung and SK Hynix recruit separately beyond quotas. The remaining 1,000 graduates from provincial universities face uncertain employment. Increasing medical student numbers by 3,000 may or may not resolve concentration; how much semiconductor departments should increase beyond 1,600 and how to utilize provincial university talent require joint consideration by specialized institutions, companies, and the government.

<Panelist A> Companies want to invest in nurturing talent. They say 3,000 semiconductor personnel are lacking annually, but that was during a boom. Until the first half of last year, semiconductors were booming, but with falling prices and reduced demand, is the same number still needed? Demand will fluctuate with the economy. If choosing between semiconductor departments and medical schools, students will likely choose medical schools. Doctors' income levels are very high compared to advanced countries, and the number of doctors in Korea is low, allowing them to earn large sums without competition. There must be rewards to make students prefer semiconductor departments. Advanced industries will continue to need talent, and treatment comparable to doctors will naturally lead to preference. Companies want to invest in contract departments to produce students tailored to their needs but are blocked by regulations. Regulations must be loosened.

<Panelist D> I agree that preferences must change. The MZ generation is practical. They prefer messengers or non-face-to-face communication over direct interpersonal contact. After the COVID-19 pandemic, platform companies and other non-face-to-face companies have raised salaries significantly. Whether platform or advanced industry engineers, if lifetime earnings are high, they will choose advanced industries over medical schools.

<Panelist E> Core talent in the future is likely to be 'enthusiasts' (deokhu). People who can do what they love will find good jobs rather than those who just scored well on exams. We must consider how to nurture different types of talent. What if graduates from semiconductor departments do not enter the semiconductor industry? It is impossible for fresh graduates to immediately match the needs of companies. If the fields are different but similar, a system to nurture adaptable talent who can perform well is needed. This is not the time to create more departments for quantitative growth. Talent policies must change.

<Panelist B> Universities adjust quotas by matching jobs and predicting needed personnel four years later, but after four years, the job market may change, and the demand at that time may disappear. Sungkyunkwan University once created a mobile phone department; was it successful? While employment in mobile phone companies may have been successful, students likely were dissatisfied because transfer to other fields was impossible. Matching education too closely with jobs is not desirable.

<Moderator> Are you saying the social trend prioritizing medical schools must change?

<Panelist E> It is not just a trend but a matter of lifetime earnings. Most will inevitably choose medical schools when considering lifetime earnings. Only those who truly want to be scientists remain. Consequently, foundational university departments will face shortages of students and talent. Talent moves according to economic logic and cannot be seen as a simple preference issue. If medical school incomes are high, we must consider raising incomes in other fields to attract talent.

How to prevent science high school graduates who enter good universities from switching to medical schools?

<Moderator> How should universities and companies interact, and what role should the government play?

<Panelist C> About 2,500 students are selected annually from gifted and science high schools. When well nurtured and sent to specialized science and engineering universities, about 200 leave and reapply to medical schools after 1-2 years. Semiconductor-related departments have high admission scores. According to this year's entrance exam results, Korea University’s Korean, math, and inquiry averages are 99.4 for medical school and 97.7 for semiconductors, just behind medical school. Yonsei University’s system semiconductor is 95.5, pharmacy 96.8, similar scores. Sungkyunkwan University’s semiconductor is 96, pharmacy 97, medical school 99. The percentile difference is only 2-3 points. Excellent students are sufficiently entering semiconductor fields. We must analyze why students enter good universities but then reapply to medical schools. Just as employees change companies, talent retention after recruitment is crucial. Universities and governments must focus on this.

<Panelist A> According to the Ministry of Trade, Industry and Energy, 30,000 semiconductor personnel are lacking over ten years, but universities graduate only 650 annually. AI personnel are short by 15,000 annually, but related departments graduate only 100. Samsung Electronics has created contract departments at Sungkyunkwan University, Yonsei University, and KAIST, but these produce only 70-100 graduates per department, which is insufficient. Deregulation of in-house graduate schools is a positive policy allowing companies to produce needed master's and doctoral personnel. Even elementary students now learn coding. The U.S. also implements digital education from basic education. Universities must adapt to these changes while fulfilling their core roles.

<Panelist E> The shortage of advanced industry talent is likely more severe among production workers than core talent. We must accurately identify which talents are lacking in which areas. Large companies lack core developers; SMEs lack production workers. SMEs must invest to improve their jobs. While universities naturally pursue basic academic research, they must adapt quickly to technological advances and teach accordingly. Few university professors willingly change. Universities do not invest and leave it to individual professors, which is problematic. Universities must consider how to build an overall education system. The current system cannot develop. We must think about how to make companies invest in universities.

<Panelist D> MZ generation university students have smart information about which companies they can enter from their departments and the reputation of professors. When entering graduate school, they are very discerning about department, professor, and major. Professors work hard to meet MZ generation preferences, adjusting course titles, creating open chat rooms for student feedback, and integrating smart functions like ChatGPT. Departments and labs that meet MZ generation preferences grow rapidly, while others naturally decline. The cold preferences of the MZ generation are already changing universities.

<Moderator> Any advice as experts in your fields?

<Panelist B> For universities to establish independent development directions without being swayed by the Ministry of Education, they need their own financial resources. Since tuition increases are not allowed, they rely on government subsidies. Government subsidies should support operating expenses. Tuition increases should be allowed proactively. Industry should increase university donations. Companies should actively cooperate by donating to create cooperative departments and support training programs, demanding more from universities.

Open university faculty to field experts and actively accept overseas talent

<Panelist A> University finances are very poor, and student numbers are declining. While social sciences are less affected, science and engineering professors often teach fixed knowledge for 20-30 years and cannot keep up with advanced industry development. More open faculty, including inviting field experts, is needed. To solve advanced industry talent shortages, industries must invest more and be incentivized to donate. Also, many overseas talents must be brought into Korea. We should consider domestic cultivation, creating good environments for domestic researchers, and importing core talents like overseas. The government must provide various benefits to encourage companies to invest more in research and development (R&D).

<Panelist D> The proportion of foreign graduate students in Korea is 30-50% per class. Many students from Asia, the Middle East, India, and Africa come to fields where domestic students do not apply. They complete their doctorates excellently, contributing to Korea’s science and technology indicators, and this trend is expected to strengthen.

<Panelist C> This year is the first in Korean entrance exam history where the proportion of science math is higher than liberal arts math. Preference for science and engineering has increased, but a concern is the concentration on certain subjects with high scores. Such score-focused choices are not desirable for the future of science and engineering.

<Panelist E> One of the biggest reasons universities are collapsing is the declining school-age population. After 2025, science and engineering master's and doctoral students will sharply decrease. It is an era without people. Without a system, it is impossible. We cannot rely solely on individual professors' capabilities. We must consider what system can nurture incoming students well, but current Ministry of Education projects do not address this. They shift responsibility to universities without systemic consideration. SMEs face imminent crises but do not invest. We must consider how to recruit and manage people well. The shock to labor supply will increase. Government policies must change to create a system for nurturing people across society.

Moderator=Jo Young-joo, Managing Editor of Politics and Society, Asia Economy

This content was produced with the assistance of AI translation services.