The Ministry of SMEs and Startups (MSS) will provide 30,000 smart factories by 2022 to help SMEs innovate their manufacturing systems. The ministry believes that its smart factory supply project has contributed to stimulating manufacturing innovation at SMEs and establishing a win-win platform between SMEs and conglomerates.
The ministry announced the project as part of its 2019 business plan at the Korea Federation of SMEs building in Yeouido, Seoul on Mar. 8. The ministry had supplied a total of 7,903 smart factories to SMEs as of the end of 2018, which resulted in 30 percent productivity growth, 43.5 percent decline in defect ratio and 2.2 persons employment growth per company.
In particular, the ministry noted that the smart factory supply project has become a primer that promotes a win-win relationship between SMEs and conglomerates. "Samsung Electronics and Hyundai Motor, as well as LG Electronics, Samsung SDI and POSCO have announced that they will pursue the smart factory project with the ministry," said Minister Hong Jong-hak. The ministry has agreed with Samsung Electronics to invest 10 billion won (US$8.82 million) each per year for the next five years to expand the supply of smart factories to a total of 2,500 SMEs.
To this end, the MSS announced a 2.6-fold increase in the smartfactory budget this year, totaling 342.8 billion won. However, some worry that the smart factory supply projectfundamentally takes a form of “cash aid.” Currently, the MSS pays 100 million to 150 million won to SMEs participating in the project. CEO of an automation device company said, "Automation ofjust one packaging line requires a minimum of 1 billion to 2 billion won. The government needs to focus on supportingcompanies’ own platforms rather than providing a small amount of money per company."