Korean Gov’t to Invest 2.2 Trillion Won in Advanced Industry Clusters
An artist’s rendition of an overview of what the completed Yongin Semiconductor Cluster will look like
The government is set to invest 400 billion won (US$301.66 million) next year and a total of 2.2 trillion won over the next five years to establish geographical zones dedicated to creating specific industries at world-class level. To boost the venture ecosystem, it plans to increase the external funding ratio for corporate venture capital (CVC) under general holding companies and raise the percentage of CVC investment overseas.
On Sept. 18, the Ministry of Economy and Finance, in collaboration with relevant government departments, held an emergency meeting of economic ministers at the Seoul Government Complex and announced a follow-up action plan for “Promoting Global Clusters in Advanced Industries.” This announcement aimed to concretize regulatory improvements and budgetary and tax support measures to implement the “Promoting Global Clusters in Advanced Industries” plan discussed during the emergency economic ministers’ meeting on June 1.
The government has announced its commitment to invest 400 billion won next year and a total of 2.2 trillion won over the next five years in innovation-capacity-based clusters, such as National Strategic Industry Specialized Zones, Advanced Medical Complex Zones, and Research and Development Special Zones, as part of its efforts to promote global-level industry cluster development. Particularly, it is pursuing an exemption from public institution preliminary feasibility assessment for the “Yongin Semiconductor Specialized Zone” to speed up its establishment.
During the latter half of this year, the government plans to announce a call for applications for biotech-specialized zones to designate new zones in the first half of next year. To foster a private sector-oriented venture ecosystem, the government is increasing the limit on external investments for CVCs under general holding companies from 40 percent to 50 percent of individual fund investments and expanding the overseas investment ratio from 20 percent of total assets to 30 percent.
The government has increased the budget for cash support for foreign investments from 50 billion won this year to over 200 billion won next year, more than fourfold. It also plans to strengthen support for foreign investment companies specializing in new growth, and advanced materials, components and equipment related to innovation-capacity-based clusters.
Earlier, the government added eight key technologies related to biopharmaceuticals to the list of national strategic technologies under the Special Tax Treatment Control Law last month. Through this, the government plans to enhance tax benefits for R&D expenditures and facility investments starting from the second half of this year.
To strengthen cooperation with the Boston Biotech Cluster in the United States, the government plans to invest 86.4 billion won next year in the “Boston-Korea R&D Project.” The project aims to advance seven key projects in biotech R&D, including artificial intelligence for antibody drugs and the development of Doctor & Answer 3.0.
Jung Suk-yee
pr@businesskorea.co.kr
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