In less than two generations, ambitious technocrats have transformed the southern half of the Korean peninsula from one of Asia's poorest nations into the 11th largest economy in the world. Now they want to turn South Korea into the East Asian capital of higher education. Several American colleges are in talks to set up academic and research ventures here, while Korea's top universities are retooling themselves to be more competitive with elite institutions in Singapore, Japan, China, and the United States. The changes are driven in part by the growing number of students who opt out of South Korea's higher-education system to study abroad. Despite spending 2.6 percent of its gross domestic product on higher education (second only to the United States and more than twice the average of most Western countries) South Korea lost 218,000 university students to foreign study last year, a figure that has almost doubled since the mid-1990s. The education ministry makes no secret that the student drain has become a crisis, and that persuading more to stay at home is a priority. The government is offering subsidies to colleges that teach in English and supporting efforts to lure more foreign professors. The Korea Advanced Institute of Science and Technology (Kaist) is at the cutting edge of what reformists believe South Korea must do to transform its higher-education sector. Beginning this year, all undergraduate classes will be taught in English, and professors and students must now compete to retain tenure and scholarships. The university is also throwing its doors open to non-Koreans. Whether South Korea is fleet-footed enough to leapfrog over its regional competitors to become a world-class educational hub depends on who you ask. Supporters say that South Korea's central geographical position, along with its size, mature economy, and Western-educated elite, give it advantages few in the region can match. Detractors point to unsuccessful attempts of foreign universities to establish campuses in Singapore and Japan and caution that proponents of internationalization underestimate the difficulties. Whether the answer to South Korea's problems lies with building up its own universities or building campuses for foreign ones, the writer concludes that the competition for students and faculty members will be intense.