Logo of Phnom Penh Post newspaper Phnom Penh Post - South Korea to spend $3.9B on economy

South Korea to spend $3.9B on economy

South Korea to spend $3.9B on economy

The government will spend 4.7 trillion won ($3.89 billion) next year to support the development of future industries as part of its effort to revitalise South Korea’s sluggish economy, the finance minister said on Wednesday.

At a ministerial meeting held in Seoul, Deputy Prime Minister and Finance Minister Hong Nam-ki said the government will invest 3 trillion won in system semiconductors, bio-health and future mobility.

The remaining 1.7 trillion won is to be set aside for data, fifth-generation network services and artificial intelligence, he said, stressing that the investment is meant to promote the growth of innovative industries and for such growth momentum to proliferate.

“The planned investment in core infrastructure and new industries is planned to help innovative growth spill over into other industrial sectors,” said Hong, who is also deputy prime minister for economic affairs.

The two-phase plan starts with expanding infrastructure for data, the 5G network and AI.

To build a foundation for innovative growth, the government will provide vouchers for small and medium-sized companies wanting to purchase AI solutions and run projects such as building digital twins of aging facilities to nurture growth of the 5G network market.

Digital twins are virtual representations of physical devices or assets that create simulations of the actual objects before being built.

The plan also includes launching an AI research and development complex in Gwangju and developing next-generation robotic technology based on AI and the cloud system.

For development of non-memory chips, the government plans to invest 230 billion won to produce advanced test equipment and establish support centres for system chip architecture. It also plans to inject 1.28 trillion won to support joint research projects of bio drugs and medical devices and pick five new hospitals to test the use of medical data in health institutions.

The plan, however, excluded offering tax benefits to R&D projects of biosimilar drugs and price adjustments of biosimilar drugs.

To speed up the development of future mobility, the government will inject a combined 1.49 trillion won into nurturing the power-charging service industry, battery R&D projects for high-performance electric vehicles and advancing K-City, a test bed for autonomous vehicles.

The 4.7 trillion-won plan came a month after President Moon Jae-in pledged to strengthen the government’s drive for innovative growth in the manufacturing sector and support talented startups in response to Japan’s export restrictions to Korea.

South Korea has been engaged in a “trade war” with Japan after it abruptly imposed tougher regulations on exports of three key materials crucial for chip fabrication and display panel manufacturing in apparent retaliation against a Seoul court’s ruling that ordered Japanese companies to compensate wartime forced labour. THE KOREA HERALD

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