Recent discourse about the fourth industrial revolution has revealed several issues in Korea, suggesting the need for fundamental changes in the industrial structure and higher education systems, which can prepare Korea for potential periods of technological unemployment. For example, labour expenses in Korea are predicted to be rapidly reduced if many jobs are replaced by machines, and the structure of the current manufacturing industry will not exist within the next 10 years. This position paper, based on a document analysis, explores the question: What are the current challenges for South Korea's higher education sector in light of likely shifts in knowledge production due to the fourth industrial revolution? It will be argued that Korea has multiple challenges in terms of its overall industrial structure, labour market and higher education and will have to upgrade the roles of its government, industry and universities in knowledge creation and skill formation to adapt.