South Korea

Abstract This chapter examines how South Korea’s privately financed, vertically differentiated higher education system struggles to meet the narrow skill needs of a knowledge economy based on the advanced manufacturing sector. The government’s retreat from and subsequent partial re-engagement with the higher education sector is traced through policy initiatives that aimed at better aligning higher education provision with labour market needs. Chief among them was PRIME, which sought to modify universities’ incentive-set to increase STEM provision without fully reasserting public control over them. The case reveals the limitations of market coordination in high-skill creation and the constrained space for state intervention once private financing of higher education is institutionally entrenched.