The South Korean government's increased investment of more than $700 million on innovation would typically put a strain on the budgets of most similarly-situated economies.
South Korea Puts Its Budget Where Its Mouth Is and Commits to Significant Industry Investment, Especially for Small Businesses
The Government of South Korea is not waiting around for other nations to take the lead in innovation and has committed to a significant investment in innovative industries, earmarking nearly four billion dollars in its 2020 budget. This is an increase of more than $700 million – more than 20 percent – of the 2019 budget allocation for innovation.
This increased investment comes as a response to growing global competition across many industries, as well as international trade pressures from both inside and outside the Asian Pacific region. It also reflects President Moon Jae-in’s commitment to the expansion of the nation’s innovative manufacturing sector to nurture globally competitive start-up businesses.
This investment strategy has elevated South Korea’s position in the global commitment to developing these industries. It was recently ranked third in Bloomberg’s New Energy Forecast (Bloomberg NEF), which produces market research on new energy trends and investments.
A key part of this strategy is focusing on assisting Korean companies not only to succeed domestically but also internationally. Cutting-edge technologies such as 5G, artificial intelligence, clear energy and digital twin software that delivers highly-advanced simulation used in computer-assisted engineering are targeted for strong growth in the coming years. Beyond building a strong domestic technology sector, focusing on clean energy, it is also positioning itself against competitors including Japan, China, and Singapore, according to Bloomberg NEF.
Korean President Moon Jae-in is also focusing on both policy and resources on small-to-medium-sized businesses and their efforts to incorporate new technologies into their offerings. His recently-released investment budget includes a new policy to provide vouchers for challenger and start-up companies to purchase new artificial intelligence technologies as well as digital twin software.