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Market News

 January 21, 2009
Green Technology the Key to Korea's Recovery Plan

 The Korean government has announced plans to promote 17 environment-friendly and cutting-edge technologies to lead the nation’s economic growth for the next 10 years. The National Science and Technology Council, chaired by President Lee Myung-bak, chose the 17 technologies from 3 main investment areas: green technology sector, high-tech industrial convergence, and value-added industries.

The Ministry of Education, Science and Technology said that a significant portion of the investments will go to R&D and it plans to boost total investment for R&D from 3.47 percent of total GDP in 2007 to around 5 percent in 2013. By then, the total amount invested in R&D will be around 287 trillion won ($ 220 billion).

By fostering the high-tech industries including renewable energy sources, robotics, IT convergence and high-tech medicine, the government expects to create 3.5 million jobs over the next 10 years.

And if research and development plans proceed as scheduled, the new growth engines are estimated to generate 700 trillion won ($539 billion) in added value and $900 billion in exports by 2018, according to the Ministry.

For the "green technology industry," the Government will be seeking investment projects for reusable energy, greenhouse gas emission reduction and fuel-efficient transportation.

In the "high-tech industrial convergence industry," investments will go to bolster next-generation IT projects, the merging of broadcast and telecommunications, biotech and medical technology development.

The government also plans to focus on developing core technologies for next-generation wireless telecommunication, fuel-cell power generation systems, high-tech ships and offshore facilities.

However, out of these 17 projects, Ministry of Knowledge Economy will take charge of 10 main projects. Though the government has yet to finalize its projections for the cost and economic effects of the project, Ministry of Knowledge Economy said it is aiming to attract around 98 trillion won ($75 billion)  in investment through 2013, about 90 trillion won ($69 billion) coming from the private sector, to the 10 core industries on the list.

"To bolster the country’s green technology sector, as well as its high-tech convergence and value-added industries, we will create a 250 billion won ($192  million) fund to support investment in growth industries this year,’’ said Lee Dong-geun, who heads the ministry’s growth industries division. "And the total amount for new growth industry fund would be gradually increased to 3 trillion won ($2.3 billion) by 2013" he added.  The fund will be used to support various high-risk research and development endeavors that companies may not otherwise engage in and to help companies sell high-tech goods such as eco-friendly cars by generating demand.

The ministry also said that it plans to invest 1.5 trillion won ($1.2 billion) in the parts and materials industry by 2012. It said that by that time, they aim to bolster 100 companies or more in this field.

Future investment plans will be outlined for seven other projects besides the 10 put forward by the Ministry of Knowledge Economy, including water treatment, the development of eco-friendly city infrastructure, and advances in the food, health and tourism industries.

To realize the plan, Seoul said it will induce private investment in R&D by revising regulations, offering tax benefits for eco-friendly cars and generating public demand for high-tech products. It also plans to open specialized universities and graduate schools to foster research & development manpower.

For More Information: National Science and Technology Council of Korea