Gov’t to invest $1.65B to form industrial clusters, boost innovation

Economy

Published: 18 Sep. 2023, 16:54

Gov’t to invest $1.65B to form industrial clusters, boost innovation

Finance Minister Choo Kyung-ho speaks in a meeting held at the government complex in central Seoul on Monday. [MINISTRY OF ECONOMY AND FINANCE]

The government will invest 2.2 trillion won ($1.65 billion) over the next five years to build industrial clusters and enable small and medium-sized enterprises to digitize production.

The announcement on Monday was a follow-up to the government’s plans proposed in June to promote the establishment of industrial clusters.

“The sluggish economy seems to be partially easing over expectations on alleviated export weakness, like for chips, a continued improvement in employment and on an expectation of a rise in Chinese tourists,” said Finance Minister Choo Kyung-ho in a statement on Monday.

“But uncertainties persist, like a continued monetary tightening in key countries, concern for a slowing global economy and expanded volatility in the international oil price.”

To overcome the uncertainties, the government plans to allocate 400 billion won next year in research and development, alongside building infrastructure for research centers.

The government also vowed to strengthen research and development on key technologies for satellite communications, including urban air mobility and maritime autonomous surface ships.

For the bio and pharmaceutical sector, the ministry will finance 86.4 billion won in the Boston-Korea project next year, which aims to connect Korean institutions with those located in Boston, like Harvard University. Some 45 billion won will be invested in the development of next-generation drugs using big data and AI.

Investment in technology for education was also proposed with a goal to raise the quality of public education. Part of the plans include gradually introducing digital textbooks that feature AI starting in 2025.

“To create a future growth engine and raise the competitiveness of our industries, we will strengthen the promotion of global clusters for cutting-edge technologies and accelerate the digitalization of small and mid-sized companies and education services,” the minister added.

Choo added the government will keep a watchful eye to stabilize prices ahead of the Chuseok harvest holidays, when demand for certain products shoots up, and to manage internal and external risks.

Choo said on Sunday that prices of certain products, like chicken and marine products, “remain at a level of burden” while the overall grocery prices have shown signs of stabilizing.

BY JIN MIN-JI [jin.minji@joongang.co.kr]