| Deputy Prime Minister and Finance Minister Hong Nam-ki, left, speaks during a meeting at the Seoul Government Complex, Thursday. Yonhap |
By Lee Kyung-min
Korea will invest 12.2 trillion won ($10.2 billion) in data, networks, artificial intelligence (AI), biohealth, semiconductors and future vehicles, backed further by 78 trillion won in financial assistance, in a bid to foster key growth driver industries, the government said Thursday.
Policy measures will be strengthened and a law will be enacted this year to better foster the rapidly growing vaccines, drugs and medical supplies makers as well as manufacturers of raw materials and parts.
"Last year, biohealth, semiconductors, electric vehicles (EVs) and fuel cell electric vehicles (FCEVs) registered a combined $63 billion in exports, up 29.2 percent from the previous year," Deputy Prime Minister and Finance Minister Hong Nam-ki said during a meeting at the Seoul Government Complex. Thursday's meeting was the first to be held this year.
"The industries are showing significant visible growth. Korea-produced FCEVs account for 51.7 percent of the market capitalization. Korea's logic chips have the second-largest market share in the global chip market. The biohealth industry is rising fast amid the country's drive to become a global vaccine hub."
The domestic data market grew to 20 trillion won in 2020, up from 14.4 trillion won in 2017. The domestic 5G penetration rate was 28.5 percent, as of January last year, far ahead of the U.S. (12.2 percent), China (11.4 percent) and the U.K. (5 percent) during the same period. The number of AI suppliers also increased to 991 last year, up from 220 in 2019.
"The said industries are challenged and defined by fierce competition over global hegemony, and they are steadily solidifying themselves as key growth engines despite the COVID-19 crisis, global value chain disruptions and rising raw materials costs. The government will mobilize policy measures including financial assistance, tax incentive and regulatory and institutional reform, thereby helping the country's' future growth industries thrive further."
The government's fiscal investment of 12.2 trillion won this year is up 25.7 percent from the 9.7 trillion won last year. Data network and AI industries are earmarked at 5.9 trillion won, and 6.3 trillion won will be provided to the biohealth, semiconductor and future vehicles industries.
Among the 78 trillion won in financial assistance are the New Deal Fund in the amount of 12 trillion won and 66 trillion won worth of policy financing from Korea Development Bank and the Industrial Bank of Korea.
The government will create an ecosystem whereby biohealth experts will be able to enhance learning capabilities, and research-centered hospitals will be able to work on long-term high-value studies, an effort backed by the enactment of a law promoting biohealth industries and innovation.
"The government will provide 353.9 billion won in subsidies for making new drugs, innovative medical devices and advanced regenerative medicine. We will set up a data center promptly where the health information of 1 million people will be digitized for advanced treatment," Hong said.
The future vehicles industry will be able to develop Level 4 autonomous driving technology by 2027. About 1,200 auto parts makers will be rebranded for the transition to future cars by 2030 in the process. Level 4, or fully autonomous driving, is expected to be used for driverless taxis and public transportation services.
A law promoting digital transformation of carmakers will take effect in July. The portal bigdata-car.kr will be set up this year for standardization of car-related data and mobility data management.