Establishment of 500 Billion Won 'Technology Innovation Specialized Fund' to Support R&D for SMEs and Mid-sized Companies

[Asia Economy Reporter Kim Bo-kyung] On the 11th, the Ministry of Trade, Industry and Energy held a 'Memorandum of Understanding Signing Ceremony for the Establishment and Operation Agreement of the Technology Innovation Specialized Fund (TIF)' with Industrial Bank of Korea, Shinhan Bank, and others at the Glad Hotel in Yeouido to invest in the R&D activities of small and medium-sized enterprises (SMEs) and mid-sized companies.

The Technology Innovation Specialized Fund will first create a mother fund by investing a total of 280 billion KRW, contributed by Industrial Bank of Korea (180 billion KRW) and Shinhan Bank (100 billion KRW), which are the dedicated banks managing the Ministry's R&D funds.

Korea Growth Investment Corporation will operate the mother fund and, by adding private investors' contributions, will form sub-funds totaling 500 billion KRW to invest in the R&D activities of SMEs and mid-sized companies.

For three years starting this year, Industrial Bank of Korea and Shinhan Bank will each contribute 90 to 100 billion KRW annually to the mother fund, and based on this, sub-fund operators will match private funds to form technology innovation funds worth approximately 160 to 180 billion KRW annually. Each fund is planned to be operated for eight years before liquidation.

Korea Growth Investment Corporation, the mother fund operator, will recruit operators for three sub-funds (each worth 50 to 60 billion KRW) to be formed this year by October, and the investment amount of 160 billion KRW formed through this will be actively invested in SMEs and mid-sized companies from the end of this year.

The fund's key investment areas will target manufacturing sectors such as future vehicles, system semiconductors, and secondary batteries, while also investing in future industries related to manufacturing such as artificial intelligence (AI), 5G, and big data.

In particular, by allowing fund operators to autonomously decide investment areas, it is expected that investments will expand into strategic sectors with higher business feasibility and marketability.

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy stated, "In a situation where technological innovation is rapidly accelerating due to the Fourth Industrial Revolution, it is expected that, in addition to direct government R&D support, the market mechanism will be utilized to effectively support various technological innovation activities of companies."

He added, "Through this Technology Innovation Fund, we will compare market R&D investments with government R&D support projects' investment targets and outcomes, and subsequently improve government R&D support methods more effectively."

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