The South Korean government said Monday that it will funnel 7 trillion won into research and development activities over the next two years to foster the new growth engine industries, such as renewable energy and biofuel technologies.

In its annual policy plan reported to the presidential office, the Ministry of Trade, Industry and Energy said that it will increase the government's R&D spending to 7 trillion won in 2016 and 2017 from 2.5 trillion won in 2015. 

Selected industries of services, culture and contents will be subject to the funding, with 71 other sectors awarded tax credits.

The new growth industries range from driving performance-enhancing technologies of electronic vehicles and developing smart car components to intelligent robots and wearable device parts, according to the ministry.

"The government will focus on removing regulations and working in R&D, financing and tax benefit programs for private sectors," the ministry said. "We are aiming at creating an environment where the private players lead their industrial development on their own."
The ministry will create three funds worth a combined 4.5 trillion won to support energy-related industries and small- and mid-sized firms.

Companies that manufacture secondary rechargeable batteries will benefit from tariff cuts when they import components or equipment.

The government said it set the sales target of the new energy industry at 28.3 trillion won by 2017, up from 14.3 trillion won in 2015.

An additional three high-end industrial complexes will be built across the country, raising the total number to 13.

The government will also spend 6.4 trillion won for state-run energy corporations, including the Korea Gas Corp. and the Korea Resources Corp., to create demand for renewable energies.

It will also support the country's core industries, such as shipbuilding, steelmaking, petrochemical, semiconductor and flat screens, to upgrade their business models and transform them into a highly value-added business. (Yonhap)