Korea to provide W6.5tr support for key sectors

Seoul unveils plans to foster green, high-tech industries


The government on Thursday pledged to provide 6.5 trillion won ($5.98 billion) this year in financial support for developing new growth engine businesses.

Finance, economy and industry affairs ministries reported the plan to President Lee Myung-bak.

“The government will boost financial support tailored to new growth engine sectors which tend to be high-risk and need longer-term help in the nature of their work,” the Ministry of Strategy and Finance said

The government has selected 17 green, high-tech sectors to lead the nation’s future growth. They include renewable energy sources, LED technologies, robotics, nanotechnology, biotechnology, health care and software.

“We expect the measures will help establish more effective ties between funding and business activities in new growth engine categories,” the ministry said.

The Small and Medium Business Administration will provide about 1.7 trillion won in loans and guarantees for small and medium-sized companies.

The state-run Korea Finance Corp will offer about 1.3 trillion won. Under the so-called “on-lending” system, the corporation will grant a mid-term loan to private banks, which will in turn lend money to promising companies, the ministry said.

The state-run Korea Technology Guarantee Corp. will offer 3 trillion won worth of loan guarantees and issue about 300 billion won worth of primary collateralized bond obligations.

President Lee urged the government to make concerted efforts to nurture key industry sectors.

“I believe that this is a path that we cannot avoid because the new growth engine areas are the way for South Korea to live on in the future,” Lee was quoted as saying by his spokeswoman Kim Hee-jung.

“If this is a path that we have to take, we have to make joint efforts.”

During the meeting, the Ministry of Knowledge Economy also unveiled longer-term plans to support 10 key technologies such as electric cars and system-on-chips in an effort to sustain its economic growth and improve its industrial competitiveness.

The 10 key technologies also include fourth-generation mobile communications, smart hospitals that use information technology systems, biotechnology and medicine, software, new cultural content, energy efficient buildings, wind and solar cells, and water treatment.

Assistance will be provided in the form of research and development funds and administrative regulatory reforms.

The exact amount of funding needed to support the technologies will be decided in September after receiving feedback from the private sector.

“The 10 technologies were selected after a thorough screening process to gauge growth potential in the next few years,” the Ministry of Knowledge Economy said.

It said each of the 10 technologies will be supported by government officials, who will help ease any administrative red tape and other obstacles.

In order to ensure sustainable growth and maximize benefits, the government and private sector will develop indigenous manufacturing machinery needed to make semiconductors, displays and light-emitting diodes along with medical, broadcasting and transportation devices, the ministry said. In the past, such machinery was imported from abroad.

The latest plan is an extension of an 8.8 trillion won ($8.1 billion) national program started in 2009 to find new economic growth industries for the country.

The ministry is also pushing a separate 1.5 trillion won research and development project for six promising technology sectors.

They include transparent flexible displays and related application products; neuro tools which fuse information technology with neurology and nerve medical services; compact multipurpose module nuclear reactors; offshore plants to industrialize deep-sea resources; super-fine print electronics manufacturing systems; and multi-purpose graphene, which is ultra-thin carbon, materials and parts.

(From news reports)