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

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

The majority of Korean software companies remain small-scale. According to the Korea Software Industry Association, the number of domestic software businesses is expected to reach around 60,000 in 2025, marking a 97% increase over the past decade. However, less than 1% of companies account for more than 90% of the total industry revenue, highlighting the severe structural weakness across the ecosystem. Only 3% of Korean software companies have expanded overseas. Even Hancom, a leading player in the software market, has only recently set a goal of surpassing 200 billion won in annual sales. A software company executive I met recently sighed, saying, "The dire state of the software ecosystem stands in stark contrast to the booming semiconductor industry."

To understand why the software industry, despite delivering much higher added value and productivity than manufacturing, struggles to achieve qualitative growth, one must examine its distorted compensation systems and social structures.

The future software architects who are supposed to compete for technological leadership with global big tech companies are instead heading to operating rooms. Looking at the 2025 admissions distribution for science and engineering majors, 76.9% of the top 1% of students chose medical school. In contrast, only 10.3% chose general science and engineering majors. The Korean Chamber of Commerce and Industry projects in its report, "Current Status and Improvement Plans for the Shortage of Science and Engineering Talent," that by 2029, there will be a minimum shortage of 580,000 professionals in emerging technology fields such as AI, cloud, and big data.

Even for those who persevere in the field of computer science, the reality of compensation is harsh. The average annual salary for science and engineering professionals after 10 years of employment is about 97.4 million won, which amounts to only a third of the average annual salary of doctors in Korea, which reaches 300 million won.

The polarization of compensation within the industry makes it even harder for the software ecosystem to grow. Major domestic hardware manufacturers in sectors like semiconductors and automobiles reward their R&D staff with generous bonuses amounting to hundreds of millions of won during boom years. In contrast, the overwhelming majority of small and medium-sized software companies, except for a handful of well-capitalized big tech firms, simply cannot compete financially. Early-stage software developers, who have little to show in terms of export performance or hardware shipments, are trapped in a chronic low-wage structure and inevitably experience relative deprivation.

Although the government has set forth a plan to foster "one million digital talents," the policy focus is still skewed toward quantitative expansion by producing entry-level workers through short-term bootcamps lasting only a few months.

Even when the government announces measures to nurture advanced talent—such as establishing AI graduate schools—the reality is that outstanding professors are drawn to big tech companies, and the brightest students are sucked into the "medical school black hole." Even those who choose science and engineering often end up pursuing well-compensated careers abroad or in domestic manufacturing R&D firms. Nurturing software talent remains a daunting challenge. It is imperative to redesign the national compensation system and policies to foster the software ecosystem, so that software professionals can receive fair treatment and focus on foundational research.

Today is Science Day in Korea. The statement issued by the Citizens' Coalition for the Realization of a Sound Science and Technology Society (BARUN), commemorating the 59th Science Day, resonates even more: "A country that talks about science only on Science Day has no future." We look forward to the day when the emergence of a second or third Upstage is no longer an anomaly, but an everyday reality for the K-software ecosystem.

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