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Hong says innovative growth remains key focus

Despite the successes, much more must be done by government

Dec 05,2019
Finance Minister Hong Nam-ki praised the achievements of the administration’s innovative growth policies, including 5G firsts, rapid developments in artificial intelligence (AI), data accumulation and regulatory sandboxes.

But Hong added that the achievements fall short, as the public is not directly feeling much benefit from them. He said that the government would continue with its “4+1” policy, which includes improving innovation and productivity of existing industries, creating new industries and markets, innovative research and development (R&D) and training and continued deregulation.

“Even under difficult economic conditions, [the government] has made a special drive to pursue innovative growth through key strategies that will not only lead our economic growth but also raise the potential growth,” Hong said during a government meeting on reviewing innovative growth policies on Wednesday.

“In an effort to solve the immediate issue of raising economic vitality, we have come up with a manufacturing industry renaissance and service industry innovation strategy as well as ‘second venture boom’ policies that targets venture capital investments and newly created companies,” he added. “We have planted the seeds for innovative growth and built the foundation for [innovative growth] to move forward.

“We believe that it is essential to develop a broader public consensus and drive innovative growth and specific policies,” Hong said.

“We will continue to work on our policy efforts that will strengthen the productivity and competitiveness of the main manufacturing industries and the service industries, which are the two wings of our industries, boldly through the convergence of ICT and cutting-edge core technologies,” Hong said, adding that the government will strongly support strategies fostering new industries and new markets, such as those related to data, networks, artificial intelligence, future vehicles, semiconductors, bio and the sharing economy.

“Sophistication of innovative resources, such as technology, talent and finance, which are the basic nutrition for innovative growth, are very important,” Hong said. “[The government] plans to secure core next-generation innovative technologies, innovate the R&D ecosystem and train 200,000 innovative people by 2023 while vitalizing innovative finance, including large-size venture capital.”

He said the detailed policies that the government will be focusing on will be included in its economic policy direction for next year that will be released later this month.

He urged the National Assembly to quickly take action in passing the so-called three data legislations that have been stalled on the floor. The three-data legislations are reform bills on private information, information and telecommunications and credit information protections that the government is hoping will boost fourth industrial revolution technologies.

“The government will significantly strengthen the policy efforts in establishing and utilizing public infrastructure, including the legislative, systematic and regulatory backups, such as the full implementation of regulatory sandboxes, the strengthening of the public innovative procurement and enhancing the platform and ecosystem,” Hong said. “[But] as the swift approval of major bills on innovative growth including the three data legislations is essential, with desperation, I request the National Assembly to quickly act on the approval of the reform bills before the regular parliamentary session for this year ends.”

Despite the efforts, some question its willingness to push innovative growth, especially when met with protest from existing industries. One areas has been the taxi industry.

Every time a mobility company - such as Kakao Taxi or the Tada hailing service - faces protests from existing taxi drivers, the government has remained mostly on the sidelines.

As such, major Korean companies have been investing in overseas mobility companies, such as Grab, as the local market has failed to move forward.

The fintech industry has also fallen behind those of neighboring countries, with mobile payment services having yet to achieve the level of Alipay.

During the meeting, the Finance Minister also laid out plans for concentrating support on the so-called 3Ks closely connected to the Korean wave - K-pop, K-beauty and K-food.

The plan is to double the size of these markets from 12.4 trillion won ($10.39 billion) in 2018 to 24.9 trillion won by 2030.

The government estimates that related jobs will more than double from the current 51,000 to 112,000 during the same period.

“To create an early market and customized market, we will create a customized category for food areas that target elderly consumers and pets while freeing the sales marketing of health products by exempting them from reporting to the government.”

He said the government will also expand the environmentally-friendly food market through a certification program that will verify products that have been processed with raw ingredients free of pesticides while diversifying export markets by participating in exhibitions.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]


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