This paper suggests Understanding Korea STI Development in the Context of Economic Theory. Korea has increased investments on R&D consistently and considerably during the last few decades. The amount of national R&D investment was 59.3 Trillion KRW in 2013, and it was 4.15% of total GDP. As a result, Korea has done quite well in terms of performance in science and technology, also ranked at top 10 in technology and science of competitiveness published by IMD in 2014. Since the mid-1960s, the Korean government has introduced a series of institutional framework in order to promote science and technology. · Korea has established the Korea Institute of Science & Technology(KIST) in 1966 to support industrial technology development. · Korea has introduced the Ministry of Science and Technology(MOST) in 1967 to coordinate national R&D and implement policies. · Korea has enacted the number of acts to support R&D activities legally. · Korea has introduced the Korea Advanced Institute of Science(KAIS) in 1971 to provide qualified young researchers to KIST and other institutes. · Korea has established the Daedeok Science Town in 1973 as a research cluster composed of GRIs, universities and private organizations. This paper discusses about the Korean experiences and try to understand them in the context of contemporary economic theories. The economic theories are ▲ Paul M. Romer's(American economist, entrepreneur and activist) analysis that the role of technological change and research sector within a framework of economic model and ▲ Michael R. Kremer's(American development economist) the O-ring Theory of Economic Development in order to answer to various stylized factors in real world.