Financial, business leaders advocate tech industry reforms

[Photo by Yonhap]

A senior South Korean financial official and a business leader recently offered their suggestions on what the country needs to make its tech industry more competitive.

Korean deputy prime minister and Choi Sang-mok, who is also the minister of economy and finance, stressed the need for streamlined pre-feasibility review for national research and development (R&D) projects during his visit to the Asian Development Bank‘s Annual Meetings of the Board of Governors held in Tbilisi, Georgia, on Saturday. This would help prevent the country from falling behind in the global high-tech industry competition.

The remarks come after concerns were raised about the country’s tendency to miss opportune moments due to lengthy R&D pre-qualification processes.

Choi also indicated a potential upward revision of Korea‘s economic growth forecast for 2024. With the previous forecast set at 2.2 percent, the government is now considering an update after announcing a better-than-expected first-quarter gross domestic product (GDP) growth of 1.3 percent that topped market expectations, which ranged from 0.5 to 0.6 percent.

[Graphics by Song Ji-yoon and Han Yubin]

“We are weighing a revision,” Choi stated, after Bank of Korea Governor Rhee Chang-yong also acknowledged the need for the update.

He also unveiled plans for state subsidies to the chip industry, which involve financial support for sectors that are viewed as less competitive such as materials, components, and equipment, while providing the manufacturing sector with tax and financial support to leverage Korean companies’ strengths.

Meanwhile, Chey Tae-won, chairman of the Korea Chamber of Commerce and Industry and SK Group, highlighted that the chip industry is struggling with insufficient capital investment.

Speaking at a press conference at Fraser Place Namdaemun in Seoul on May 2nd, 2024, Chey emphasized the need for more capital investment while listing the technological constraints that are hindering further progress.

“We need to build more production lines to increase supply, but relying solely on funds from semiconductor companies for continued investment is proving to be a challenge,” he said.