Annual 200 Billion KRW for 4th Industrial Revolution Strategic Technologies... Expanding New Industry Creation

[Asia Economy Reporter Kim Daeseop] The Small and Medium Business Administration announced on the 5th the '2020 Integrated Announcement of Small Business Technology Development Support Projects' worth 1.4885 trillion KRW.

This technology development support project was organized at the largest scale ever, with an increase of 414.1 billion KRW (38.5%) compared to 2019, to strengthen the driving force for creating new industries in the Fourth Industrial Revolution field and achieving technological independence in the materials, parts, and equipment sector.

Additionally, to meet diverse technology development demands, 18 new support projects worth 280.7 billion KRW were established, including technology development support through investment methods departing from the traditional grant and subsidy approaches, and strengthening support in the form of technology-based consortiums rather than individual companies. For the first time, investment-type technology development was introduced, supporting a 'Lab to Market Fund' with 50 billion KRW.

To utilize the corporate selection and nurturing capabilities and capital strength of private venture capital, the program operates on a pre(private) investment and post(government) matching investment basis (1:1). Various incentives are provided, such as granting companies and investors partial government equity purchase rights (call options).

Furthermore, a post-payment type technology development support was newly introduced to provide investment costs and incentives upon successful technology development in cases where core technologies have low versatility and thus low demand for technology development.

More than 200 billion KRW annually will be concentrated on strategic technology fields of the Fourth Industrial Revolution, such as artificial intelligence and big data. Over 100 billion KRW annually will be preferentially supported through separate competitions in the three new industry sectors (system semiconductors, bio-health, and future automobiles). Dedicated projects (3 projects, 26.7 billion KRW) for the three infrastructure industries of the Fourth Industrial Revolution?'Data-Network-Artificial Intelligence'?will be newly supported.

To continuously foster the materials, parts, and equipment sector, which is the foundation of future new industries, 118.6 billion KRW will be allocated as a special account for materials, parts, and equipment, providing full support. For 100 small and strong companies in the materials, parts, and equipment sector, preferential technology development support will be given, and even companies that fail the final evaluation will receive technology development bonus points for three years to support technological independence.

To promote the localization of elemental technologies through a division of labor cooperation relationship where small and medium enterprises develop and produce items needed by large and medium-sized enterprises, which then purchase them based on trust, demand company recommended projects will be given preferential treatment. To increase research autonomy, restrictions on the use of large company contributions will be minimized, and consortium technology development among large, medium, and small enterprises in demand-supply chain relationships will be allowed.

Support periods and scales will be expanded according to the accumulation level of execution capabilities from idea to scale-up, matching the technology development purpose and technological capabilities of small and medium enterprises. Support will be provided in stages: initial capability (1 year, 100 million KRW) → capability leap (2-3 years, 200 million to 1 billion KRW) → capability maturity (over 3 years, 2 billion KRW).

While encouraging bottom-up technology development support, reverse business support is fundamentally prohibited. For single-company technology development, after a total of four benefits, a graduation system will be applied to block subsidy prolongation for innovation-stagnant companies. For top 30% challenging evaluation projects, even if technology development fails, the scope of exemption will be greatly expanded to promote challenging technology development.

Yoon Semyung, Director of the Technology Development Division at the Ministry of SMEs and Startups, said, "We plan to build a big data database by collecting and selecting technology and market (company) data related to technology development throughout the entire support cycle, and based on this, implement an effective smart technology development support system."

This content was produced with the assistance of AI translation services.