Future Growth Engines

 

On January 18, the Ministry of Trade, Industry & Energy made a report to President Park Geun-hye that it would invest 8.5 trillion won this year in a bid to help Korean industries find new growth opportunities.
 

The plan is to overcome the current crisis of Korea’s key industries such as petrochemical, textile, shipbuilding and steel by means of industrial advancement. To this end, the ministry and the Small & Medium Business Administration raise a fund of 2.5 trillion won while the Korea Electric Power Corporation (KEPCO) raises two trillion won for the growth of small firms in the energy sector. The Korea Development Bank (KDB) and the Industrial Bank of Korea (IBK) are planning to provide three trillion won and one trillion won for investment promotion purposes, too.

These funds go to ICT-based convergence industries, new energy sectors, etc. For example, electric vehicle techniques and infrastructure are to be developed based on the production of smaller and lighter batteries and construction of more charging stations while cameras, sensors and the other core parts of self-driving vehicles are domestically developed. In addition, more areas are to be opened for drone flight and efforts will be made regarding the R&D and commercial utilization of intelligent robots, wearable devices and smart home technology. Investments are going to be made in the cosmetics, food, healthcare and medical equipment sectors as well so that Korean companies can make inroads into the fast-growing Chinese markets.


Regulations are repealed in the new energy sector, too. Energy prosumers in possession of small-scale, dispersed power generation systems are to be allowed to sell their electricity to their neighbors as well as the Korea Power Exchange and the KEPCO. The resale of the power with which electric vehicles are charged is scheduled to be allowed as well.

At the same time, restructuring will be in progress at a faster pace with regard to the aging key industries. For instance, councils to that end are to be set up in the first half of this year so that the current conditions of the petrochemical and steel industries, which are amid supply gluts, are accurately analyzed and companies can adjust their production and investment based on the analysis. 61 trillion won is invested in the semiconductor and display sectors for them to widen the gap against the others.

 

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