[The Editors' Verdict] On the 59th Science Day... A Closer Look at the Reality of Korean Software

AI startup Upstage has raised 180 billion won in Series C funding, making it the first generative AI company in Korea to achieve unicorn status with a valuation exceeding 1 trillion won. While this is welcome news, the fact that it is the first such case also highlights the harsh realities of the Korean software ecosystem.

The majority of Korean software companies are small-scale. According to the Korea Software Industry Association, as of 2025, there will be around 60,000 software businesses in Korea—a 97% increase over the past 10 years—but less than the top 1% of companies account for more than 90% of total revenue, demonstrating the severe structural smallness of the ecosystem. Only 3% of domestic software companies have expanded overseas. Even Hancom, the leading player in Korea's software market, has only recently set a goal of surpassing annual sales of 200 billion won. An executive at a software company whom I recently met sighed, saying, “The poor state of the software ecosystem stands in stark contrast to the booming semiconductor sector, especially as AI adoption spreads.”

To identify why the software industry, despite generating far more added value and productivity than manufacturing, struggles to achieve qualitative growth, one must look at the distorted compensation system and social structure.

The future software architects who will compete in the global tech supremacy race are all heading to the operating room. According to the 2025 college admissions data for science and engineering majors, 76.9% of the top 1% of students chose to pursue medicine. In contrast, only 10.3% chose general science and engineering disciplines. The Korean Chamber of Commerce and Industry projected in its report, “Current Status and Improvement Plans for the Shortage of Science and Engineering Talent,” that at least 580,000 professionals will be lacking in new technology fields such as AI, cloud, and big data by 2029.

Even for those who manage to remain at their computers, the tangible rewards are harsh. The average annual salary of science and engineering professionals 10 years after employment is about 97.4 million won, which is less than one-third of the average annual salary of Korean doctors, which reaches 300 million won.

The internal reward gap within the industry makes it even harder for the software ecosystem to grow. Large domestic hardware manufacturers—such as those in semiconductors and automobiles—offer generous, multimillion-won bonuses to R&D staff during boom periods. In contrast, the overwhelming majority of small and medium-sized software companies, except for a handful of capital-rich big tech firms, simply cannot compete with this financial muscle. Early-stage software developers, with no immediate export performance or visible hardware shipment figures to point to, are inevitably subjected to chronically low wages and a sense of relative deprivation.

Although the government has announced the goal of “training one million digital talents,” the focus of policy still leans toward quantitative expansion through short-term bootcamps that churn out entry-level personnel in a matter of months.

Even when policies are announced to foster advanced minds, such as establishing AI graduate schools, the reality is that top faculty are lured away by big tech, and the smartest students are sucked into the medical school “black hole.” Even the few students who choose science and engineering often head overseas or to domestic manufacturing R&D firms that offer better compensation, making software talent development a constant struggle. A national-level compensation system and policies to foster the software ecosystem must be redesigned so that software professionals can receive fair treatment and devote themselves to foundational technology research.

Today is Science Day. The statement released by the Citizens’ Coalition for the Advancement of Science and Technology (CASNET) to mark the 59th Science Day—“A country that talks about science only on Science Day has no future”—feels all the more poignant. I hope for the day when second and third Upstages will no longer be rare exceptions, but will become the norm in the K-software ecosystem.

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