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Development Overview
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Establishment of the Korea Institute of Science and Technology

Establishment of the Korea Institute of Science and Technology
 
1. Background
 
The establishment of the Korea Institute of Science and Technology (KIST) is a primary example of a successful development aid project carried out in close cooperation between the recipient and donor in deep consideration of both sides’ interests and of the changing social context in which the project occurred.

The United States, the donor who made this project possible, was looking for development cooperation projects that could curb rising criticisms over American involvement in international development worldwide; a project wherein a strategic partnership could be formed with the recipient country on both substantial and symbolic levels. Washington sought to implement a new foreign aid policy that fit the ideal of the Great Society of the Lyndon B. Johnson administration. Since the Point Four Program[1] of the Truman administration, the United States had steadily emphasized the need for providing technical assistance, but had yet to produce a visible outcome of that policy.

Washington, in other words, needed to counter criticisms over the apparent inefficiency of its foreign aid by showing visible and successful outcomes from its investments overseas. The KIST project provided just the right occasion for Washington to foster the growth potential and development capacity of a developing country. Amid the rising skepticism of development aid in general, Washington sought to curb the brain drain from developing countries like Korea by pursuing projects of symbolic significance that also utilized the intellectual resources of those countries.

As the crisis sparked by the Vietnam War deepened, threatening Washington’s security strategy in Asia, the United States began to perceive the increasing need to enhance strategic partnership with its traditional allies in the region by supporting a development project with potential.

Korea for its part had been looking for new ways and means to develop a general scientific and technological research center ever since its original plan to do so (as part of the First Five-Year Economic Development Plan) was thwarted. Thus Washington’s offer to support the establishment of a dedicated research facility could not have come at a more opportune moment.[2]
Moreover, amid the escalating hostility with North Korea and the legitimacy crisis that the new revolutionary government in the South was suffering after it came to power through a coup d’état, active cooperation with the United States, the undisputed leader of the liberal camp worldwide, would not only help to reinforce national security, but also elevate the profile of the new South Korean government in the public eye at home and abroad.[3]
 
 
2. Progress
Washington made public its proposal for KIST’s establishment in a Joint Statement devised by the leaders of the United States and Korea and presented during President Park Chunghee’s visit to Washington in May 1965. In that Joint Statement (May 16), the two sides explained their agreement on devising a proposal for the establishment of a research center that could aid in Korea’s industrialization, and also drew attention to Washington’s intention to organize and dispatch a presidential technical advisor to Seoul to confer with leaders of Korean industrial, science, and education circles on the plan.[4]

With such solid support, the KIST project proceeded quickly and without much difficulty. Preliminary and feasibility studies were conducted in 1965, and the two governments entered into an execution agreement the following year.
 
<Overview of the KIST Project>
- Preparations begin based on the Joint Statement.
⃝ Korea’s Economic Planning Board develops the Plan for the Establishment of the KIST, and assembles the Advisory Board on Preparations for the Establishment of the KIST.
⃝ The United States dispatches a group of investigators, headed by Dr. Donald F. Hornig, to Korea in July 1965 to conduct a feasibility study on the KIST project.
- September 1965 to December 1965: Battelle Memorial Institute, a science and technology development firm, is commissioned by the US Agency for International Development (US AID) to conduct an on-site survey of the KIST plan, culminating in the Research Report on the Establishment and Organization of the KIST.
- February 1966: The two countries sign the Agreement between the Government of the Republic of Korea and the Government of the United States of America Regarding the Establishment of the Korea Institute of Science and Technology (between the Economic Planning Board and US AID).
- March 1966: Battelle submits its proposal regarding the KIST to US AID. In April, the US government and Battelle sign an agreement on the research and preparatory services needed to establish the KIST.
- May 1966: The site for the KIST is chosen (publicly owned land within the Forestry Laboratory site).
- June 1966: The plan for KIST’s establishment is included in the Second Five-Year Economic Development Plan, with the KIST and Battelle signing an agreement on technical services and partnership.
- October 1966: Construction of the KIST begins.
- November 1966: The KIST, alongside Battelle, conducts a demand survey in 16 industries in Korea.
- December 1966: The Korean National Assembly enacts the Korea Scientific Procedure Research Center Promotion Act (Law 1837), followed by the Science and Technology Development Act (Law 1864) in January.
- March 1967: The National Government Organization Act is amended to abolish the Technology Management Bureau of the Economic Planning Board and newly create the Ministry of Science and Technology under the Prime Minister’s authority.
- May 1967: The organization of the KIST is defined and research tasks begin (based on the Agreement on Scientific Research Services for the Long-term Energy Supply Plan, signed with the Korean government).
- August 1967: Duties and tariffs are lifted from research equipment and materials under Law 3193.
- March 1969: The KIST signs an agreement on technical assistance with the IESE of the United States.
- October 1969: The construction completion ceremony is held for the KIST.
 
 
3 Details
 
The purpose of KIST’s foundation was to advance industrial and economic development in Korea through research in the applied sciences. The practicality of the institute’s objectives and research activities was of foremost importance to the leaders of both countries, and even acknowledged in the Joint Statement.[5]

There are a number of reasons why practicality took a central role. First, the Johnson administration’s foreign aid policy, often dubbed the “Technological Marshall Plan,” stressed the need to provide practical and substantial technical assistance abroad. Although the emphasis on technological aid had been made in the Point Four Program decades ago, the program had not yielded much visible fruit until this point. In fact, much of the technological aid that the United States had provided for Korea until the early 1960s, particularly for colleges and universities, had turned out to be ineffective. Second, the emphasis on practicality reflected Washington’s growing need to see the aid it provided bear effect as soon as possible. And third, there was an urgent need in Korea for an applied science research institution that could play a direct role in implementing the Korean government’s plan for development and industrialization.[6]

Dr. Hornig, the Special Advisor on Science and Technology to President Johnson, visited Korea with a group of American investigators and researchers in July 1965. Afterward, Battelle Memorial Institute, the technological advising group for the KIST project, quickly organized a feasibility study for the project and also developed a working plan. The Hornig group’s report, submitted to President Johnson in August 1965, stated that the institute would need firm and strong financial backing from the governments of both countries as well as from Korean industries. The report also proposed that the research center be granted budgetary discretion and decision-making power in order for it to draw the world-class scientists and researchers crucial to its initiatives and objectives. Moreover, the report called for close cooperation with Korean industries so as to make better use of available resources nationwide and expand the basis of the institute’s research activities. The Hornig report also drew attention to the institute’s potential to become a cooperation model that could be emulated by other developing countries, and to the need for the institute to establish active, long-term partnerships with its counterparts abroad. Finally, the report proposed that execution authority rest with US AID.[7]

Battelle Memorial Institute, separately hired by US AID and dispatched to Korea in September 1965 after the departure of the Hornig group, conducted a broad feasibility study until December that year, exchanging opinions with Korean government, industry, science, and education representatives and surveying the current state of industries and technology in the country. Their findings culminated in the Report on the Establishment and Organization of the Korea Institute of Science and Technology[8] that was submitted to both governments on December 15, 1965. The report provided the framework for the establishment and operation of the KIST, and also formed the basis for the agreement between the two countries on the project’s plan. The agreement, signed by Korea’s Economic Planning Board and US AID on February 4, 1966, postulated a project period lasting from 1966 to 1970, and delineated important terms and conditions for the institute, as follows.
 
 
  • Establish and operate a nonprofit institute of scientific and technological research, overseen by an independent Board of Trustees;
  • Hire 75 employees first in 1966 during building construction, and over the next five years hire 210 additional employees and expand the facility to 200,000 square feet in total (including research and office units);
  • Recruit the most competent and qualified research staff domestically and from overseas by according them treatments and incentives comparable to other international institutions;
  • Form an independent research institute capable of conducting professional feasibility studies, researching the introduction and application of new technology, providing scientific and technological information, and performing specially commissioned services and testing;
  • Maintain and expand a cooperation network with new colleges and universities, research institutes, and other technology-related organizations;
  • Conduct research services according to contracts and within the bounds of the institute’s founding purposes, and protect the confidentiality and property rights of clients.
 
A major concern in the KIST’s establishment was deciding on the principles and systems by which its research services and projects would be carried out. Such decisions were made through intensive discussions between the two sides, and the principles and systems borne from these discussions were, by all means, groundbreaking for Korea at the time and instituted quite independently from Korea’s actual experience and capacity. Specifically, the KIST was modeled in organization and management after some of the world’s most progressive research institutions, including the National Research Council of Canada, which though generously supported by the Canadian government enjoys an unprecedented level of academic independence; the Commonwealth Scientific and Industrial Research Organization of Australia, whose human resources system and methods for identifying and carrying out research projects of national importance and urgency are unprecedented worldwide; the Max-Planck Institute of Germany, which is highly regarded for its ability to maintain balance between basic and applied research, and also for its active pursuance of cooperation with other research institutes and colleges/universities; and RIKEN of Japan, whose unit organization and ability to maximize the usefulness of research findings are at the world’s most advanced level. These models provided the foundation upon which the basic principles of the KIST were derived.  
 
KIST Principles:
 
  • Pursue research and development of sciences and technology toward the aim of national development;
  • Ensure the balance between applied research for projects with commercial and social effects and basic research that forms the bedrock of the former;
  • Seek close cooperation with industries;
  • Engage in wide-ranging exchange and technological partnerships with research organizations at home and abroad;
  • Recruit an adequate number of researchers capable of conducting independent and innovative research;
  • Recruit contract-based researchers according to their competence and the nature of the tasks at hand;
  • Establish an accountable accounting system based on accurate calculations of research costs.
 
The KIST was determined to lure Korean scientists and researchers who were educated or working in the United States to the institute by offering the most attractive incentives possible. This strategy was a way to stem the tide of brain drain out of Korea while ensuring KIST was staffed with the best and the brightest researchers.

Although the original investment estimate for the project was USD 12 million, in the end almost double that amount was poured into the project, due mainly to steep rises in the institute’s operating expenses. The Korean government handled this dramatically increased fiscal burden by taking out additional loans from US AID[9] and the Japanese Reparation Fund. As a result, the United States ended up providing USD 9.08 million, much greater than the originally planned USD 6.76 million.
 
<Details of Investment in the KIST>
(Unit: USD 1,000)
 
    Source Details
Type Total Korea United States Other Construction Equipment Operation Human Resources
Planned 12,080 5,320 6,760 - 4,750 3,000 2,570 1,760
          (2,000)1 (3,000) 1 ( - ) (1,760) 1
(Proportion, %) (100.0) (44.0) (56.0) (0.0) (39.3) (24.8) (21.3) (14.6)
Actual 23,400 14,100 9,0802 2203 10,640 1,900 9,690 3,170
          (4,290)1 (1,620)1 ( - ) (3,170)1
(Proportion, %) (100.0) (60.3) (38.8) (0.9) (45.6) (8.1) (32.8) (12.5)
Notes: 1. Funded by the United States.
2. USD 1.9 million of which came from US AID.
3. Made available by the Japanese Reparation Fund for Korea.
Source: Kim, 1990.
 
 
[1] A foreign aid program of Washington, which originated from the fourth point of President Harry S. Truman’s inaugural address in 1949, and which ran from 1949 to 1953.
[2] The Technology Management Bureau of the Economic Planning Board, predecessor to the current Ministry of Science and Technology, drew up a plan for establishing a general scientific and technological research center, based on its fact-finding mission of related institutions in Korea in 1963. The plan, however, was thwarted due to an objection from the Ministry of Commerce and Industry. Although the Ministry of Commerce and Industry sought to establish a similar institute modeled after its General Research Institute of Metals and Fuels, that plan also ground to a halt. (See A 20-Year History of Scientific and Technological Administration, Ministry of Science and Technology, 1987, p. 16.)
[3] Kim Geunbae, “A Study on the Process of Establishing the KIST: Focusing on American Aid and its Impact,” Korea Journal of the History of Science, vol. 12, no. 1, 1990, pp. 46-48.
[4] A 30-Year History of the KIST, KIST, Dec. 1998, pp. 94-95.
[5] The Joint Statement of May 18, 1965, calls this research center the Institute for Industrial Technology and Applied Sciences.
[6] Kim, 1990, pp. 47-49.
[7] Report to the President Regarding the Feasibility of Establishing in Korea with the United States an Institute for Industrial Technology and Applied Science, August 1965.
[8] The feasibility study report, prepared and submitted according to a contract between US AID and Battelle (AID/fe-194), confirmed the feasibility of establishing the KIST, and also outlined specific measures to that end, including the enactment of special legislation supporting the research institute.
[9] Loan Agreement between the Republic of Korea, the Institute of Science and Technology, and the United States of America, signed and put into effect in Seoul on November 7, 1968 (Treaty No. 289).

Source: Korea International Cooperation Agency. 2004. Study on Development Aid and Cooperation for South Korea: Size, Scope and Exemplary Effects. Seoul.

  ##PAGE## 4. Evaluation and Implications
 
As the first institute of scientific and technological research in the world built based on major assistance from the United States, the KIST marked a turning point in the history of foreign aid provided by Washington, characterizing the shift in focus from administrative support and assistance to the creation of an actual general institute capable of conducting research and development.

The creation of the KIST may have meant different things to Korea and the United States, but the success of the project was of great importance to both countries. Whereas similar research institutions in other developing countries ultimately failed to achieve the level of success they aspired to, the KIST went on to exert far-reaching influence on research and development as well as on the growth of industries in Korea. The KIST, in other words, set an example of a research institute that responded to the nation’s developmental needs with scientific and technological research: it provided the vital technological information and services needed by businesses, and advanced science and technology in the country through seeking out cooperation with universities and other research organizations. The process of its establishment and success now serves as a paragon for developing countries struggling with similar projects.[1]

Although detractors point out that the concentration of support in the KIST has relegated basic and pure sciences to a secondary state in Korea, such criticism should not lead us to underestimate the remarkable achievements of this institution, which are all the more noteworthy, given the scarcity of resources and a generally backward research environment the institution faced at the time.

The KIST also merits attention because it was a project made possible due to aid and assistance from the United States at a time when Korea absolutely lacked any infrastructure or resources for the research and development of applied sciences. The United States, for its part, was enthusiastic and took the initiative for the project based on its own strategic and policy needs.
Some suggest that the KIST project was a way for the United States to “repay” Korea for its deployment of Korean troops to the Vietnam War. In any case, the project proceeded quite rapidly and with zeal once the United States completed its proposal. The governments of the two countries signed the execution agreement in just six months following Washington’s proposal. If we consider that it took four years after Korea and Germany signed the agreement on setting up a vocational training institute in Busan (presently the East Busan Campus of Korea Polytechnic VII) for the two countries to actually sign the execution agreement (in 1970), six months is a whirlwind.

The United States, in addition to conducting basic and follow-up studies, implemented a clearly defined plan regarding the management, operation, and organization of the institute, introducing advanced systems for contract research and accounting to ensure the stability of the institute’s budget policy; forming a rational and dynamic research environment; and guaranteeing researcher independence and freedom. The United States also provided a clear and detailed plan on how to recruit and employ competent researchers, develop partnerships with other research organizations, and accumulate and make use of research and development information. Such active advice and support helped all the parties involved keep their sights on the same goals and targets throughout the process.

Korea also undertook the KIST project with enthusiasm and openness. The government enacted the Measures for the Creation of an Institute of Scientific and Technological Research in June 1965, and soon after that organized public hearings on the KIST’s establishment and launched a preparatory advisory board. In February 1966, the Korean government signed the official agreement with the United States, organized a research foundation, and enacted the Korea Scientific Procedure Research Center Promotion Act,[2] thus preparing the institutional and legal basis for the long-term success of the research institute.

Moreover, Korea managed to secure research staff and a budget that were much larger than the original estimate, supported through a special fund. In 1970, around 573 people were hired for the KIST, more than double the original plan (210).[3] The Korean government increased the operating budget as a result.

The strong leadership and political support afforded to the project enabled the KIST to quite rapidly establish itself as a serious and major institute of research in Korea and accordingly meet its goals and targets early on.

The KIST represents a successful development project wherein the strategic interests of the donor and the open acceptance of the recipient conspired together to produce visible achievements ahead of schedule. The epochal conditions, social needs, and the commitment of both the donor and the recipient not only helped to achieve the project without much difficulty, but also assisted Korea to take latecomers’ advantage, while avoiding the failures experienced by other developing countries in their struggle with similar projects.

Thoroughgoing review, in-depth, on-site studies, and expert assessments also contributed to the KIST’s success. Prior to project launch, the United States assembled a world-class group of investigators and researchers, headed by the Special Science and Technology Advisor to the then US president, to conduct a meticulous review of the project’s scientific and policy implications. US AID also hired a specialized research firm with extensive experience and consulting capacity to conduct a professional feasibility study on the project, thus paving the ground for the success of the KIST despite the utter absence of research resources and capacity in Korea.

Moreover, a large group of investigators, including 23 researchers from Battelle Memorial Institute and 57 Korean experts, was brought on to conduct a fact-finding investigation into the current state of Korean industries before the institute’s organization and research priorities were decided. The group conducted their research for a relatively long period of time from November 1966 to August 1967,[4] in the end concluding that the project’s success rested in part on the institute’s ability to forge strong cooperative ties with other research organizations.

Most importantly, the KIST project stressed the central importance of soft elements for its success, including human capital and a solid management system. The United States insisted on a human-centered perspective from the outset, thus dismissing Korea’s more facility-centered demands,[5] and helped the KIST recruit and hire competent and qualified researchers from early on for its successful establishment.

The United States was particularly involved in the process of deciding who would head the KIST, and nominated candidates for the role that it deemed most capable of achieving the guiding ideals and purposes of the institute.

The emphasis on the soft elements of the KIST’s operation, however, also ended up incurring much greater cost, especially in terms of operating and service expenses, than the original investment forecast.

The organizational structure and management system introduced with the KIST were quite novel, groundbreaking, and even difficult to tolerate at first, given the socioeconomic conditions of Korea at the time. The KIST project sought to establish an autonomous operating system; ensure the accountability of research by introducing the concept of contract research; and promote expanding relations of cooperation and exchange with industries and other research organizations in Korea and abroad. These were new systems that were challenging to establish in Korea at first. Nevertheless, thoroughgoing review, preparations, the establishment of management principles, and institutional support helped these new systems take root and flourish with relative success.

Over three decades have passed since the creation of the KIST, and the time has come for a comprehensive assessment of its impact, both positive and negative. First, although the KIST played a pivotal role in promoting Korea’s industrialization during the decades of development, we need to ask whether its current structure, system, and competencies are capable of playing an even larger role amid the sweeping changes occurring in science and technology worldwide. In other words, will the KIST maintain its leading and pioneering role in the development and evolution of sciences and industrial technology in the future?

Another question concerns how well the KIST has been adapting its plans and operating principles to changes in the greater social and economic environments. Its founding vision, organizational and operating principles, and management philosophy underpin the existence of the institute at a fundamental level.

These questions can be answered only through continuous monitoring and review of the institute and its activities, but no such post-establishment assessments have been conducted since the Final Report[6] was submitted to the United States in 1971. Thus, they are long overdue.
 
 
[1] Kim, 1990, p. 45.
[2] The Act was promulgated as Law 1857 on December 27, 1966. According to this legislation, the Korean government was to subsidize the KIST with the costs of construction and operation, and also to provide the KIST with national assets free of charge, either by transfer or rental, without subjecting such decisions to governmental auditing or legislative approval. A series of other legislations followed suit, including the Science and Technology Development Act (Law 1864, enacted on January 16, 1967); the Measures on Removing Duties and Tariffs on Materials and Equipment for the Construction of the KIST (Law 3193, enacted on August 13, 1967); the amended Tax Reduction and Control Act (Law 1874, enacted on November 29, 1967); and the Electronic Industry Development Act (Law 2098, enacted on January 28, 1969).
[3] Kim, 1990, p. 65.
 
[5] Kim, 1990, p. 54.
[6] Battelle Memorial Institute, Report on Battelle’s Assistance to the Korea Institute of Science and Technology, June 30, 1970.

Source: Korea International Cooperation Agency. 2004. Study on Development Aid and Cooperation for South Korea: Size, Scope and Exemplary Effects. Seoul.