Government pledges to invest in engineering
In cooperation with local banks, the government will increase export credit guarantees for engineering companies from the current 90 billion won ($80 million) to 150 billion won starting from 2017 to encourage exports.
“The Korean economy faces various challenges due to the possible interest rate hike in the United States, ongoing corporate restructuring and weakened exports followed by the Galaxy Note7 case and Hyundai Motor labor union strike,” said Yoo Il-ho, the country’s deputy prime minister for the economy and minister of strategy and finance. “We will now focus on helping the engineering sector become more competitive by giving them various benefits and helping them train more experts.”
The Korean government will select about 30 students per year to receive full-ride scholarships to study at colleges in the United States and United Kingdom and expand the number of spots in its overseas internship program. Other measures include bringing educational programs from training institutions such as PetroSkills in the United States and the French Institute of Petroleum to help teach Korean students.
Currently, five developed countries, including the United States, Canada and the Netherlands, account for 70.4 percent of the global engineering market. Korea accounts for just 2.4 percent.
The local engineering market continues to be weak because of decreasing investment. The amount of orders received by local engineering companies was 6.8 trillion won in 2011, but that fell to 5.7 trillion won last year, the Trade Ministry said.
There are a total of 5,559 engineering companies in Korea, but 96 percent of them are small and midsize companies. Only three Korean companies - Hyundai Engineering, SK E&C and Kepco E&C - are on the list of the world’s top 100 engineering firms.
The government promised it would have more small-size companies participate in government projects and said the experience would help them build up credibility to sign on to new projects later.
“Engineering is the most fundamental and basic sector of the entire industry,” Deputy Trade Minister Toh Kyung-hwan said. “We will do our best to have the engineering sector improve its competitiveness in the global market.”
BY KIM YOUNG-NAM [firstname.lastname@example.org]
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