Government offers 15 trillion won to support innovation

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Government offers 15 trillion won to support innovation

With only about two months left on this year’s calendar, the government rolled out a series of measures to promote innovative growth in order to prevent the economy from slowing further. A total of 15 trillion won ($1.3 billion) of financial support, including loans and tax benefits, is being provided.

The goal is to improve the environment so innovation can be led by the private sector rather than by the government.

The Ministry of Economy and Finance Wednesday said it will make 10 trillion won available this year for modernizing the industrial structure. The ministry said 80 percent of the funding, which will come in the form of loans and tax incentives, will be offered to SMEs and medium-size companies.

The 5 trillion won will be used for the upgrading of facilities for SMEs and medium-size companies and outdated buildings and infrastructure. The loans will be provided by government-owned banks, including the Industrial Bank of Korea and Korea Development Bank, at low rates.

The Ministry of Land, Infrastructure and Transport will invest 60 billion won into improving industrial complexes, while the Ministry of Trade, Industry and Energy will commit 290 billion won, with 81 percent going to smart factories.

The goal is to establish smart industrial complexes by redesigning outdated manufacturing facilities. The upgrades include the development of smart grids, the introduction of IoT sensors and the utilization of drones.

One of the most significant measures the government is promoting is the lifting of regulations that have held back the growth and establishment of innovative industries, especially those in the shared economy. The government said it will come up with detailed measures covering shared economy enterprises and had decided to expand shared economies services.

The shared economy once again became the center of attention when cab drivers gathered in downtown Seoul last week in protest of leading mobile messenger Kakao developing a carpool app service.

Finance Minister Kim Dong-yeon in meeting with businessmen at the Korea Chamber of Commerce and Industry on Wednesday said that if the shared economy is inevitable it would be best to tackle the relevant issues head on so that Korea will no longer be labeled as the “wasteland” of the shared economies.

“Shared economies require co-existing” with existing industries such as taxis and conventional lodging businesses, Kim said.

The government said it will also look into lifting regulations that limit the use of the latest technologies, such as smartphones and wearable devices, in health management and remote medical diagnosis. The current law prevents non-medical companies from providing medical services.

It added that it will create an evaluation system that will allow for the quick introduction of artificial intelligence and robotics into the medical equipment.

To encourage Korean companies that relocated overseas to return to Korea, the government will offer tax incentives and subsidies. It plans to outline details of the support next month.

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