The Korean Government’s Bold Fiscal Investment into Innovation | Inbebo Skip to main content

The Korean Government’s Bold Fiscal Investment into Innovation

The Korean Government’s Bold Fiscal Investment into Innovation

Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki presided over the 57th Emergency Economy Central Countermeasures Headquarters Meeting held at the government complex in Seoul on the morning of the 31st of March 2022.  He said:  

“To maintain the momentum of the government's national transition to a digital and green economy one step ahead of other countries, it will continue to invest in the Korean version of the New Deal. In addition to the prompt legislation of the Personal Information Protection Act, the company plans to continuously discover additional tasks for legal and institutional reform.  

The Ministry of Strategy and Finance announced on the 31st that the 'Korean version of the New Deal performance check and future development direction' was discussed at a meeting of the Emergency Economy Central Countermeasures Headquarters held on the 31st, presided over by Hong Nam-ki, Deputy Prime Minister and Minister of Strategy and Finance. 

The government has decided to continue its financial investment, which is the prime mover for the creation of a digital and green innovation ecosystem, transition to carbon neutrality, and establishment of inclusive employment and social safety net. The plan is to promote the plan until 2025, such as creating a new deal fund of 20 trillion won and supplying 100 trillion won in policy finance, and furthermore, it is a plan to lead the participation of the private sector in investment through full-scale investment in promising small and medium-sized enterprises. They will continue to explore the legislation and additional tasks such as the Personal Information Protection Act, which has not been enacted among 43 laws among the 12 legislative tasks of the New Deal for the transition to the future.  

As a New Deal 2.0 project, it was decided to quickly complete the institutional framework for preemptive business restructuring and labor conversion support, such as the revision of the Special Act on Corporate Vitality, which has been underway since July of last year.  

Looking at the development direction by field, the Digital New Deal spreads, and spreads data, 5G mobile communication (5G), and artificial intelligence (AI) achievements in various fields and promotes convergence and connection between major technologies and other industries to achieve qualitative growth decided to promote. In the Green New Deal, the speed of carbon-neutral transition is increased by expanding the supply of pollution-free vehicles to 1.33 million units by 2025, expanding support for green transition for small and medium-sized enterprises, and establishing a hydrogen economy ecosystem. We also decided to continue cooperation at the ecosystem level.  

In the Human New Deal, we continue to strengthen the inclusive employment and social safety net by expanding the employment and industrial accident insurance and national employment support system and implementing the Korean-style sickness and sickness benefit pilot project. In connection with the New Deal, we plan to specialize in regional businesses. The performance of the Korean version of the New Deal project, which is being promoted by investing 220 trillion won by 2025, was also checked.  

First, the government evaluated that the Korean version of the New Deal was used as an opportunity to transform the COVID-19 crisis into a leading country. He also said that the New Deal, initiated by the Korean government, is becoming a universal policy direction for the world to go together, including major countries such as the United States and the European Union (EU) announcing digital and green nurturing measures. 

According to the government, drastic financial investment has provided a driving force for change, and through a nationwide propulsion system, 28 New Deal laws have been enacted and revised in a brief period of time. By focusing on building a DNA (data, network, AI) foundation, it created 5G/AI convergence innovation services such as smart factories and expanded the AI/digital revolution ecosystem by expanding private investment. It accelerated the transition to green throughout the country, including architecture, cities, and industry, and ranking number.  

To respond in a timely manner to rapidly changing conditions, such as expanding national employment insurance, bridging the corona gap such as education and care, support for youth asset formation, and strengthening human resources training, and to respond to changes such as business reorganization support for crisis industries and job change education for workers support measures for businesses and workers were also quickly reinforced.  

The government explained that the IMF received positive evaluations from overseas, such as evaluating the Korean version of the New Deal as a 'welcome strategy for securing a post-coronavirus growth engine and enhancing inclusiveness'. Deputy Prime Minister Hong said, "Based on the past performance review, we expect that investment for the future will continue."  

Source: Lee Bo-bae from YNA (March 31, 2022) 

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