Submit your final research paper that you have been working on throughout this course, focused on a STEM and society related issue and how this is approached

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Government vs. Private Sector Support for STEM R&D: Germany vs. South Korea

Garlin Saintice

American Military University

Stem 380 D002

2025/04/02

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Government vs. Private Sector Support for STEM R&D: Germany vs. South Korea

Introduction

In the 21st century, scientific and technological research and development (R&D) is the

basis of innovation, economic power, and national security. Countries worldwide invest in

STEM (Science, Technology, Engineering, and Mathematics) R&D through government

agencies and private companies. The ratio of public and private sector funding usually indicates

a society's political and economic philosophy and prevailing social norms associated with

innovation, education, and workforce training. This study aims to examine the subdued

comparison between Germany and South Korea regarding government and private sector support

for STEM R&D, evaluate the relative proportions of funding sources within each category, and

analyze national ideologies driving these funding policies.

Germany: A Social Market Economy Emphasizing Public-Private Cooperation

Germany is internationally known for its focus on applied science, industrial

development, and vocational training. It follows a social market economy, which combines

elements of capitalism and social welfare. In this system, the German state funds basic research

considerably while expecting private industry to undertake applied research and development

(R&D). Germany's gross domestic expenditure on R&D (GERD) is approximately 3.1% of GDP,

of which about 69% is from private industry and 28% from the government (EuroStat, 2024).

The rest, 3%, is provided by non-profit organizations and foreign individuals.

The federal and state governments in Germany support scientific inquiry and translational

research through the German Research Foundation (DFG) and the Fraunhofer Society,

respectively. The latter supports market-oriented projects that synergize with academia. Major

industries receiving investments for R&D include automotive, mechanical engineering, and

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renewable energy. Moreover, the government offers tax credits and innovation clusters for

private R&D in Mittelstand (small and medium-sized enterprises) areas.

Germany’s vertical and regional integration in R&D demonstrates an equilibrium in

constructive growth, sustainable technological advancements, and industrial participation at

various levels of the economy. The political concept of subsidiarity, where a higher body should

not interfere with the functions that a lower body is capable of performing, corresponds with the

decentralization in R&D in sustaining regional innovation and university indusial collaboration.

South Korea: A State-Driven Innovation Economy

Initiatives such as the "Digital New Deal" and the "Green New Deal" demonstrate the

government's active involvement in shaping R&D priorities, particularly in artificial intelligence,

semiconductors, and biotechnology. South Korea has built a high-tech economy, with the active

assistance of state industrial policy. The government strategically invested in R&D and enabled

rapid industrialization during the 1960s (Park, 2019). Subsequently, South Korea transitioned

from an aid-dependent nation to one of the most advanced economies in the world. In 2024, their

spending on R&D surpassed 5.06% of GDP, marking it the highest in the OECD region (OECD,

2025). Approximately 76% was funded by private industry and 22% by the government (OECD,

2025). Samsung, LG, and Hyundai have become the frontrunners of South Korean innovation

and have dominantly spearheaded the private sector's R&D.

The National Research Foundation of Korea (NRF) and the Ministry of Science and ICT

strategically supervise the ecosystem, ensuring they maintain a decisive hold. Even as the South

Korean private sector maintains dominance over R&D, the government's guiding hand prevails.

The South Korean ideology centers around the developmental state model—where government

and industry work together to achieve common national economic targets. This directly

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correlates with fostering exports and innovative human capital: an aggressive STEM vision for

an economy positioned globally in strategic defense and national security.

Comparative Analysis of R&D Funding Categories

Both Germany and South Korea display a remarkable level of private sector engagement

in R&D. However; each differs in the manner and degree of government support provided. In

Germany, funding from the government is extremely dominated by basic research at both

universities and public research institutes. For example, in 2022, German R&D spending was

divided such that approximately 60% was earmarked for basic research while only 15% was

allocated for experimental development. This is characteristic of Germany’s perspective, which

places value on foundational science research policies that have enduring, long-term benefits for

society.

In contrast, South Korean government support is targeted towards mission-driven

research and the advancement of strategic technologies. In R&D expenditures by stage KRW

77.85 to developmental research, KRW 23.47 to applied research, and KRW 17.74 trillion went

to basic research (14.9%) (Lee, 2024). This is evident in the form of dedicated large-scale

programs for supporting chip production, developing digital infrastructure, and advancing green

technologies—for climate change and supply chain sustainability.

The private industry in both countries concentrates on product development and

innovation. Nonetheless, South Korea's private sector demonstrates a more vertically integrated

R&D structure, as large conglomerates (chaebols) perform their research and align it with

business strategy. In Germany, private sector R&D is relatively more dispersed and includes a

broader constellation of businesses, including SMEs that frequently partner with public research

institutions.

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Ideological and Cultural Contexts in Shaping STEM Expectations

Social market ideology in Germany balances competition with social responsibility. It

governs societal expectations of STEM progress in green energy, public transport, and health

technologies. Citizens expect transparency, independence, and ethics in science policy.

Education systems actively support the advancement of STEM through vocational training,

where practical training is integrated with interdisciplinary approaches.

As for Korea, South Korean developmental ideology emphasizes national power,

international competitiveness, and self-sufficient technologies. STEM R&D is deemed an

economic driver, a source of national pride, and a security source (Choi et al., 2024).

Sociocultural aspects are strongly linked to STEM's academic aspects, including intense

schooling and national science-centric university entrance examinations. Social expectations

exist that Science and Technology will help the nation become a future global innovation leader.

Conclusion

Germany and South Korea are two examples of funding STEM R&D that represent

opposing political and economic ideologies but are equally successful in accomplishing their

goals. Germany mixes public and private collaboration with regional innovation system

approaches, while South Korea employs a state-guidance model led by powerful industrial actors

focused on a national strategy. There is a clear alignment of intent, cultural values, and

ideological objectives, which stems from funding CAD's reasoning behind strong innovation

ecosystems in both countries. This understanding is useful for developing international proactive

science policy in the context of urgent global challenges like climate change, pandemics, and

digital transformation.

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References

Choi, Y., Li, S., & Lee, H. (2024). Korean Paradox of Public Support for the Research and

Development Investment in the Sustainable Performance of the Regional Economy.

Land, 13(6), 759. https://doi.org/10.3390/land13060759

EuroStat. (2024). R&D expenditure – Statistics Explained. Europa.eu.

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=R%26D_expenditure

Lee, J. (2024, December 30). Domestic R&D spending as % of GDP ranked No. 2 in 2023 :

Korea.net : The official website of the Republic of Korea. Korea.net.

https://www.korea.net/NewsFocus/Sci-Tech/view?articleId=264121

OECD. (2025). R&D spending growth slows in OECD, surges in China; government support for

energy and defence R&D rises sharply. Oecd.org.

https://www.oecd.org/en/data/insights/statistical-releases/2025/03/rd-spending-growth-

slows-in-oecd-surges-in-china-government-support-for-energy-and-defence-rd-rises-

sharply.html

Park, J.-D. (2019). Korea’s Path of Development in Retrospect. Re-Inventing Africa’s

Development, 177–205. https://doi.org/10.1007/978-3-030-03946-2_7