SEOUL, KOREA — The Ministry of Knowledge Economy will actively push ahead with a growth strategy to open an era of the USD 2 trillion for the economy this year, a top trade and industry policymaker said.
“Although the crisis surrounding the real economy and energy is being heightened further due to growing uncertainty of the global economy, soaring oil prices and unstable prices of raw materials, the ministry will employ all possible means to enter the era of the USD 2 trillion economy” said Minister of Knowledge Economy, Hong Suk-woo.
In an interview with Korea IT Times, Minister Hong said, “We will seek new chances through FTA with giant economic blocs, including the U.S., and make preemptive responses to the growing risk of the real economy and energy this year.”
Noting that the ministry will concentrate its efforts on expanding future-oriented growth engines, Minister Hong said, “We will expand global leadership of the domestic industry through convergence and make a strong push for low carbon and green growth this year.”
As concrete steps, the ministry will advance the commercialization of the fourth-generation smartphone (LTE-Adv.) in 2014 and push for construction of the fifth-generation mobile environment in preparation for the 2018 PyeongChang Winter Olympics.
“By activating the intellectual discovery (ID), we will strengthen response force in global patent and technology competition. In particular, the ministry will actively support small and medium-sized enterprises (SMEs) which are fragile in management and protection of their patents,” he said.
Related to this, the ministry plans to expand the “Invention Capital” that accelerates creation, transfer and use of knowledge assets, including SMEs’ ideas and patents to KRW 188.2 billion won by next year. Through this privately owned governmental cooperation, it aims to increase the invention capital from KRW 77.2 billion won to KRW 188.2 billion won in 2012.
“As for SME-developed new technologies which were adopted as global standards, the ministry will actively support their development of test equipment and products through R&D projects. As of November 2011, a total of 118 technologies developed by SMEs, including mobile broadcasting and bio recognition technologies, were adopted as global standards,” he explained.
“To help SMEs engage in creative and daring R&D challenges in spite of the risk of failure, the ministry will gradually realize the R&D successful rate from 98 percent in 2010 to a 50 percent level in 2014,” he noted.
Activation of low carbon and green growth
To attain the 2012 greenhouse gas reduction goal in the industrial and power generation sectors, the ministry plans to spend some KRW 570 billion won for enterprises’ investment in green facilities.
“In particular, we will push for the ‘green credit’ to transfer large companies’ advanced technology to reduce greenhouse gas to SMEs. Presently, some KRW 4 billion won worth of investment is set to be made through the green credit conclusions between six large companies, including POSCO and Honam Petrochemical, and 13 SMEs,” said the minister.
Along with this, the private sector and the government will jointly inject KRW 2 trillion won into the project for development of Energy Storage System (ESS) over the decade in an attempt to improve energy efficiency.
Commenting that the ministry plans to foster soft power as new growth engine, Minister Hong said, “The ministry will revise the Software Industry Promotion Law in 2012 to prepare for the foundation to actively foster professional software companies.
“In line with this, it will push ahead with establishing SW Meister School to actively foster SW professional manpower, invite top-tier brains from abroad, and dispatch Korean SW talents to advanced countries.”
Trade surplus likely in February 2012
When asked about the nation’s trade balance, Minister Hong said that the nation’s trade balance would swing back into the black in February as exports pick up, driving a turnaround from January’s deficit.
“Korea will post a surplus in February, even though small, despite tough economic conditions,” he said.
The ministry is scheduled to release its preliminary trade figures on March 1. Korea registered a USD 2.03 billion trade deficit in January, driven by a plunge in key export items such as ships and mobile communications devices. New export orders also dropped for a sixth straight month as the European debt crisis and the Lunar New Year holiday dampened demand.
The ministry set its surplus target at USD 25 billion for this year, but slowing exports spell a grim outlook for Asia’s fourth-largest economy, where exports account for about half of the domestic output.
“For the first 10 days of February, Korea remained in the red with a 14 billion deficit. Exports came at 15.3 billion and imports at 16.7 billion,” he said quoting the figures released by the Korea Customs Service.
30,000 jobs offered for youths in the private and public sector
The government and private sectors plan to provide youths with a total of 30,500 jobs this year.
“The ministry projects to employ some 20,000 young researchers in the private sector by expanding its investment in personnel expenses for various R&D projects this year. It aims to increase the R&D human capital investment portion in the knowledge and economic sector from 30 percent in 2010 to 40 percent in 2012, compared with Germany’s 58 percent,” Hong said.
“Through the world-class 300 project, which fosters SMEs with high growth potential as global professional companies, it also plans to employ 2,000 young people. In 2011, 30 enterprises employed 1,163 youths through the world-class 300 project,” he said.
Meanwhile, some 60 state-invested institutions, including KEPCO, under the umbrella of the Ministry of Knowledge Economy plan to employ some 4,000 young people this year.
Nuclear plant talks with Turkey
On the question of Korea’s ongoing nuclear plant project with Turkey, Minister Hong said, “The ministry plans to send a delegation headed by a deputy minister to Turkey in February for discussions on the construction of nuclear power plants in the Eurasian country.”
Hong said that Turkey had proactively called for Korea to take part in the nuclear project whose value is expected to reach about USD 10 billion.
“During President Lee Myung-bak’s recent visit to Turkey, the Turkish president and prime minister asked for Korea’s participation in nuclear construction. Related to this, we will dispatch a delegation to the country sooner or later. The Turkish side promised to accept many of our requests for the talks,” he explained.
Minister Hong said, “To meet its future energy demands, Turkey plans to build a pair of nuclear reactors on the Black Sea in Sinop. It originally contacted Korea for the agreement, whose value might double in consideration of the follow-up operations contract, but negotiations fell apart in late 2010.”
Both countries could not find a medium on several aspects including financing plans, the dividends for investors per kilowatt, payment guarantees of the Turkish government and responsibility in case of nuclear accidents.
Korea demanded payment guarantees while Turkey tried to cut the amount of dividends per kilowatt. Turkey then turned to Japan, but hit a stalemate in the aftermath of the nuclear disaster in Fukushima last March.
The minister stated, “Turkey said that it would rethink the payment guarantee and the responsibility of nuclear accidents. We will have to negotiate the amount of the payment.”
If Korea wins the contract, it would be the second milestone for Korean nuclear energy plant exports. In 2009, KEPCO signed an USD 18.6 billion agreement under which KEPCO will construct four nuclear reactors in the United Arab Emirates by 2020.
