[THE INVESTOR] The government will facilitate the convergence of service and manufacturing industries through tax breaks and establish a supervisory body for aiding service sector’s overseas expansion, it announced on July 5.

Through the measures, Korea hopes to raise the average intermediate input ratio to 25 percent by 2020. According to government data, the figure for Korea stood at 20 percent in 2011. In comparison the figure for the UK stood at 55 percent, and 34 percent for Japan in the same year. 


The government will also secure 10 trillion won for supporting service sector’s exports by 2020.

The plans are part of the government’s strategy for aiding the service industry’s growth.

As part of the plans, the government will draw up detailed plans for fields selected as core businesses, including design and engineering services.

In addition, a road map will be announced for developing service-manufacturing convergence industries regarding machinery, automotive, electronics and other key manufacturing sectors.

The road map will include measures concerning mid- to long-term technological tasks, human resource development, overseas expansion, and inter-industry alliances.

Other measures include expanding R&D investment, and exempting R&D costs concerning manufacturing-service-ICT convergent technologies from selected taxes.

The government will also draw up detailed pricing guidelines for design and engineering services during the first half of next year to ensure that providers of such services can work for fair pay.

By Choi He-suk (cheesuk@heraldcorp.com)