Korean gov’t to cut R&D budget by $3.8bn, expand AI, bio spending

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The South Korean government has decided to slash more than 5 trillion won ($3.8 billion) in the country’s research and development (R&D) budget and increase funding for future advanced industries such as artificial intelligence (AI) and bio.

The move comes as part of a selection and focus strategy to overhaul the R&D budget that had been distributed to small businesses in fragments and instead focus resources into areas that lead to actual results.

Under the 2024 budget proposal approved by the Cabinet on Tuesday, 4.4 trillion won will be invested in four high-value-added advanced service sectors next year - AI, bio, cybersecurity, and digital platform - up 22.2 percent from this year.

The government will invest 1.2 trillion won to support private companies in developing AI technologies and services and 1.9 trillion won to develop original bio technologies including new drugs and stem cells.

It will also develop services that combine AI with law, medicine, academia, media, and psychology and build the nation’s integrated bio big data center with state funding.

In the bio sector, the government will support the development of bio source technologies such as new drugs and stem cells by benchmarking the U.S. Defense Advanced Research Projects Agency (DARPA).

It will also accelerate the project to merge Korean medical data with advanced U.S. biotechnology, also known as the Boston-Korea Project.

In the security sector, a 20 billion won cybersecurity fund will be created and a curriculum will be developed to foster core talents for convergence security.

A budget of 920 billion won has also been allocated for the digital platform government business, which will focus on developing creative services such as building a consulting platform that can analyze factory locations in advance using virtual simulation technology and address required permits.

The budgets have been set aside by restructuring the R&D budget, which has been under controversy over possible cartel activity.

The total R&D budget for next year will be 25.9 trillion won, down 16.6 percent from this year.

In the meantime, 1.9 trillion won has been set for exports next year, up 400 billion won from this year. The government plans to provide an additional 1.3 trillion won in export funding to support the export related to large-scale projects for nuclear power plants, defense, and plants, and establish the Startup Korea Fund to help promising domestic ventures start business overseas.

The budget to attract overseas funds will also be increased. Cash support for foreign direct investment in Korea will be increased to up to 200 billion won from 50 billion won, and subsidies for reshoring companies will be expanded to 100 billion won from 57 billion won. In particular, up to 50 percent increase in subsidies will be granted for investments in national and high-tech strategic technologies.