Korean government to invest $424 million in software industry this year

[Image source: Gettyimagesbank]

The South Korean government will invest 563 billion won ($423.6 million) in boosting the country’s software industry as it recognizes the critical role software plays in driving innovation across various sectors.

The Ministry of Science and ICT announced Friday measures to bolster the domestic software industry with an aim to enhance the country’s digital infrastructure and promote exports. The measures include investing over 560 billion won in the software industry this year.

Under the new framework, the government plans to support the development of system software technology that helps produce the best output with lower power that can be applied to various architectures of hardware starting this year.

Based on its belief that lightweight and optimized software is essential for cutting edge technologies, often represented by artificial intelligence, the government will seek the development of highly efficient computing software that can be adopted in data centers using locally-made AI chips. It will continue its endeavor to develop low-power AI chips through the “K-Cloud Project” in partnership with the private sector.

Development of Korean software technologies will also be sought under the government’s support in mind of potential exports.

The government will select promising software or developers based on their growth potential and export competitiveness. It will provide R&D support for two years starting this year. The most likely areas include collaboration tools, software for the manufacturing industry, and medical and pharmaceutical software.

Science and ICT Minister Lee Jong-ho [Photo by Yonhap]

Korea will also explore software technology needs through government-wide cooperation that can bring more competitiveness to certain industries, such as manufacturing, automobiles, shipbuilding, and space.

Support for the development of software that can be used in general across many areas, such as automobiles, robots, and urban air traffic (UAM), will begin in 2025.

Another key area that the government is focusing on under the framework is the software-as-a-service (SaaS) sector as it considers SaaS to be a new opportunity for the country. The government’s goal is to increase the number of Korean SaaS companies to more than 10,000 by 2026 from about 1,100 in 2021.

“Major global companies are shifting their business structure to SaaS-based, from packaged software sales and system building,” said an unnamed official from the science ministry. “Online distribution and sales have created an easy environment for domestic software companies to grow and promote exports.”

The government will aim to increase the number of software companies with 100 billion won or more in annual sales to 250 by 2027, up from 145 in 2021. It will also further train 200,000 specialized workers and encourage the use of open-source computing to create a competitive open source-based ecosystem.

“Software is the foundation of innovation when it comes to new digital technologies and economic growth, and having a strong foundation is important,” said Science and ICT Minister Lee Jong-ho. “The government will try to cover all necessary areas, from nurturing digital talent and the development of foundational technologies, to framework revisions.”