State firms to spend over KRW30tr to nurture innovative growth

• State-led companies plan to spend over KRW30tr 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 Finance Minister Kim Dong-yeon said on 2 Aug.
• 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 KRW2.6tr investment fund for start-ups in 2018, the first portion of a proposed KRW10tr 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 start-ups 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 KRW30bn from the current KRW500bn. Also, the government will offer an array of tax incentives to those holding companies.
• The minister also said the government will review whether to slash a budget for social infrastructure in 2019. Earlier, the finance ministry said it would cut spending on the construction of social infrastructure in 2019.

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