State firms to spend over W30tr to nurture innovative growth

By Yonhap

Published : Aug 2, 2018 - 15:33
Updated : Aug 2, 2018 - 17:18

State-led companies plan to spend over 30 trillion won ($27 billion) in key leading sectors, such as autonomous driving, by 2022, thus creating an environment for private companies to seek innovative growth, the country's chief economic policymaker said Thursday.

"To boost innovative growth, state-run companies will play a vital role, and they will spearhead investment," Finance Minister Kim Dong-yeon said in an economy-related ministers meeting.

"The government will also expand support programs for startups and share public data with private companies for their business opportunities," he said.


The minister stressed that the private sector's role for innovative growth is very important. "The government will continue efforts for deregulation as well," he said.

Innovative growth is one of the key economic goals sought after by the Moon Jae-in government, along with income-led growth.

The government earlier unveiled a set of support measures to boost innovative growth by providing funding and other incentives to eight key sectors such as smart farms, smart cities, fintech, drones and electric vehicles and artificial intelligence.

The government said it will also take drastic measures to ease regulations that have been blocking new industries and technologies from moving forward.

The ministry said the government will launch a 2.6 trillion won investment fund for startups this year, the first portion of a proposed 10 trillion won investment fund that is to be created by 2020.

Under the comprehensive plan, the government will focus on expanding the money supply for fledgling enterprises and creating a venture-friendly environment.

The ministry said a total of 300,000 jobs will be newly created by 2022 under the support measures.

As part of efforts to spur investment in startups and venture firms, the government seeks to ease regulations on venture holding companies.

For one, the minimum asset size of a venture holding company will be lowered to 30 billion won from the current 500 billion won.

Also, the government will offer an array of tax incentives to those holding companies.

Meanwhile, the finance minister said the authorities will take measures against any fallout stemming from widely expected rate hikes in the United States.

"The FOMC will raise the rate as scheduled unless there are unexpected events," Kim told reporters after the meeting. "We have to respond to that scenario."

The US Federal Reserve on Thursday kept the interest rate unchanged as widely expected but said US economic growth is strong and the job market is continuing to strengthen.

"The US Fed is expected to deliver two more rate hikes this year and three rate raises next year," Kim said. "The government is also looking at other external factors such as the US-China trade row and economic conditions in the European Union."

The minister also said the government will review whether to slash a budget for social infrastructure next year. Earlier, the finance ministry said it would cut spending on the construction of social infrastructure next year.

"That's because social infrastructure projects have a far-reaching impact on the regional economy and help stabilize the job market," Kim said. (Yonhap)


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The Korea Herald by Herald Corporation