Gov’t invests 5.6 trillion won in growth areas

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Gov’t invests 5.6 trillion won in growth areas

The government Tuesday announced a plan to spend 5.6 trillion won ($5.1 billion) by 2020 to foster 19 new growth engine industries starting this year.

The industries are largely technology-oriented and include smart cars, 5G mobile telecommunication, the Internet of Things (IoT) and wearable smart devices, announced two ministries dealing with technology and trade, the Ministry of Science, ICT and Future Planning and the Ministry of Trade, Industry and Energy.

Some projects were selected to further advance Korea’s existing strengths like automobiles, mobile telecommunication technologies and building plants abroad, while others aim at quickly commercializing locally developed technologies.

The future growth engine project will begin with 1 trillion won in investments by the end of this year, which will cover R&D, preparing basic infrastructure, commercialization and easing regulations.

“Korea is racing against many technology-advanced countries like the United States, Japan, Germany and France, in the same technological areas to commercialize products and become an early bird taking a larger share in the global market,” said Minister of Trade, Industry and Energy Yoon Sang-jick Tuesday afternoon at the Plaza Hotel in central Seoul. “Speed is the most significant factor in winning the game. Usually, completing an R&D project or integrating two R&D results takes at least a decade, but we will focus on accelerating the process.”

“While the private sector continues pursuing their business with vigor, the government’s job is to spend more in long-term R&D projects, ease existing regulations and encourage private companies to spend more by giving them tax breaks,” said Minister of Science, ICT and Future Planning Choi Yang-hee.

The ministers said the government hopes to boost Korea’s exports and technology competitiveness, aiming at $100 billion in exports by 2024. It also wants to contribute to job creation for young professionals.

The government is scheduled to complete deregulation plans and tax breaks by the latter half of this year, said an official from the Industry Ministry. Participants in the 19 government-led R&D projects are likely to be offered additional discounts on the corporate tax they pay, added the official.

According to the Finance Ministry, the government this year offers tax deductions of up to 3 percent for local conglomerates’ R&D projects spending, and 25 percent for R&D spending carried out by small and midsize companies.

Wearable devices will receive the largest government R&D subsidy of about 98.3 billion won by 2020. To boost competitiveness of Korean-made wearable devices, the government also will invest 60.8 billion won to develop and commercialize system-on-chip (SoC) semiconductors, a memory chip that stores both data and operates wearable device software.

The IoT and 5G mobile telecom technologies will each receive 77 billion won in investments. The government aims to expand the local IoT industry to 30 trillion won in 2020, and to commercialize the world’s first 5G mobile network nationwide by 2020.

Projects for smart cars will receive 28.2 billion won. A provincial town will be selected as a trial city to revise traffic laws.

One of the earliest projects to be completed is polyketone, a material developed by Hyosung now in the mass commercialization process. The government will offer subsidies to patent polyketone and other materials.

The government will play matchmaker for large companies and small and mid-sized suppliers.

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