Future Growth
On Aug. 28, Choi Yang-hee, minister of Science, ICT and Future Planning, announced that the Korean government will invest 5.7 trillion won (US$4.8 billion) in fostering future growth engines by 2020 through cooperation at the pan-governmental level. He also said that the government is aiming to secure original technology in the fields of ICT, biotechnology, nanotechnology, and climate change. Those remarks were made during the first committee meeting for the industrial policies of the Federation of the Korean Industries (FKI) at the FKI Conference Center in Seoul on that day.
The government is currently nurturing 19 future growth engines, including 5G mobile communications, smart cars, marine plants at the seabed, and vertical takeoff and landing unmanned aerial vehicles.
At the event, minster Choi stressed, "Cultivating future growth engines is like sowing seeds for the future. The government will expand its investment in research and development and improve related laws and systems in order to help companies start new businesses."
"There is no breakthrough in economic revitalization at the moment, owing to fears about China's economic crisis and the continued slump in Korea's major industries. But Korean companies cultivated new growth engines when they faced similar situations in the past," remarked Koo Ja-yeol, LS Group chairman and the head of the committee. He continued by saying, "When companies are preparing for starting new businesses, they experience some problems. It is due to the fact that the implementation of related laws and systems are always late." Koo added, "So, it is most important to rapidly complement the shortcomings of related laws and systems through communication between the government and private enterprises."
Those who participated at the event proposed that the government quickly update the list for new growth engines and original technology that can benefit from the R&D tax credit. In the case of R&D of new growth engines and original technology, the government is offering 20 percent tax credits to large businesses and 30 percent to small and mid-sized enterprises. However, new technologies like Internet of Things or IT-based health care are unable to enjoy tax breaks, since the R&D tax credit list is updated each year or once every two years.