Growth engines named
Seoul says it will spend $20 billion to create 700,000 jobs and become leader in services, high-tech and green energy
To hasten an end to the economic downturn and strengthen Korea’s position on the global market the Ministry of Knowledge Economy said it would spend 24.5 trillion won ($19.7 billion) over the next five years to invest in 17 new growth engines.
The ministry yesterday laid out the details of the plan, which calls for 14.1 trillion won to be spent on research and development and 10.4 trillion won allocated to help companies in the specified sectors compete worldwide.
This year the government plans to invest 2.6 trillion won, with over 5 trillion won per year to follow from 2010 to 2013.
Three major categories will receive the influx of cash: green technology, high-tech conversion industries and value-added service sectors.
Green technology includes 79 projects, including renewable energy, low-emission energy, LED lighting, mass transit and eco-friendly urban planning, and will pull down 6.7 trillion won in public funds.
Meanwhile, 12.2 trillion won will go to companies dedicated to transforming industry using cutting-edge technology, on 62 projects in such areas as broadcasting and telecommunications, IT systems, robotics, materials sciences, nanotechnology, pharmaceutical biotech and medical machinery.
High value added service industries targeted include medical tourism, international education, content development and tourism, with 59 projects drawing 5.5 trillion won in investment.
The government also expects to spend 2.1 trillion won in the next five years on developing new talent and 6 trillion won to supporting small and medium companies in the “growth engine” areas. Seoul hopes to create 700,000 new jobs in the industries over the next 10 years as well as establish 300 small enterprises with annual exports of over $50 million by 2013.
Sixty-two “star brands,” or products the government predicts will be particularly important, will win special support. They include solar batteries, eco-friendly vehicles, household robots and other areas. To commercialize these products Seoul will help develop 1,197 new core technologies.
“Star brands are products and technologies that have the biggest potential to gain an advantage on the global market and create new business opportunities,” said Cho Seok, deputy knowledge economy minister. “These are areas where Korea does not [yet] have the upper hand.”
Meanwhile at the opening of the New Growth Engines Jump Start Korea 2009 exhibition held at Kintex, Gyeonggi, American economist Tom Peters emphasized the essential role entrepreneurs will play in these new markets.
“The exceptional power of [smaller firms] is essential at difficult times like these,” said Peters. “True leadership will come from entrepreneurs or some sort of combination of entrepreneurs and universities.”
Peters emphasized that innovative minds at small companies always redefine new products and technology.
“I have no problem with Japan, but I was incredibly happy this year that the number one car [company] by quality in the U.S. was Hyundai and not Toyota,” Peters said. “I think that’s great, but Hyundai doesn’t make cars that are dramatically different from Toyotas.”
The economist added that areas for development should be selected carefully, then developed intensively. Every country is hoping for success in energy independence and sustainability, and to succeed Korea must consider what will work here, Peters said.
The exhibition and conference were organized by 11 government departments including the Prime Minister’s Office and the Ministry of Knowledge Economy. Some 160 companies including Hyundai Motor, Samsung Electronics and KT are participating in the exhibition, which opened yesterday and runs through tomorrow.
By Lee Ho-jeong [firstname.lastname@example.org]