'Smart Daehanminguk Fund' 6 Trillion Won... Creation of 25,000 Jobs

Ministry of SMEs and Startups, South Korea's Digital Economy Transition
Government and Private Sector Jointly Establish Fund
Annual Supply of 1 Trillion KRW from This Year to 2025
Focus on Non-Face-to-Face, Bio, and Green New Deal Sectors
Investment in About 3,000 Innovative Startups and Venture Companies

Park Young-sun, Minister of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The government and the private sector will establish a total of 6 trillion won scale 'Smart Korea Fund' by 2025 to invest in about 3,000 innovative startups and venture companies. By focusing investments on high-growth potential industries such as non-face-to-face (untact), bio, and Green New Deal sectors, they plan to create 25,000 jobs.

The Ministry of SMEs and Startups announced the 'Smart Korea Fund Establishment and Operation Plan' at the National Policy Issue Inspection and Coordination Meeting chaired by Prime Minister Chung Sye-kyun at the Government Seoul Office on the 16th. The Smart Korea Fund plans to jointly raise a fund of about 1 trillion won annually by the government and the private sector from this year until 2025.

The fund will be raised with approximately 40% from the government and 60% from the private sector. Mentor companies and financial institutions will participate as sponsors to support the growth of junior companies. This year, the Ministry of SMEs and Startups (400 billion won), Ministry of Environment (20 billion won), and Ministry of Health and Welfare (18 billion won) will jointly invest 438 billion won, and about 600 billion won of private funds will be raised to form a fund of over 1 trillion won in total.

The Smart Korea Fund will focus investments on job creation and high-growth potential Korean New Deal sectors. It will support untact (companies utilizing ICT, artificial intelligence, etc.), bio (healthcare companies such as vaccines and medical devices), and Green New Deal (companies developing eco-friendly products and alternative energy) sectors.

This year, the investment scale of the Smart Korea Fund by sector is 500 billion won for untact, 400 billion won for bio, and 100 billion won for Green New Deal. The bio fund will be a collaboration between the Ministry of SMEs and Startups and the Ministry of Health and Welfare. The Green New Deal fund will be a collaboration between the Ministry of SMEs and Startups and the Ministry of Environment to maximize the effect of government financial support for each fund.

The government expects that the Smart Korea Fund will create more than 4,000 jobs annually by 2025. The goal is to create 25,000 jobs.

This Smart Korea Fund reflects the government's commitment to actively support startups and venture companies leading the digital economy transition as a follow-up measure to the Korean New Deal National Report Conference held on the 14th.

Recent venture investment trends show that despite a slight 4.2% decrease in venture investment performance in the first quarter of this year due to COVID-19, investment demand surged in the 'ICT services' (+24.0%) and 'bio and medical' (+33.9%) sectors as innovation accelerated in non-face-to-face digitalization and biotechnology fields.

Also, untact companies have been found to have a higher job creation effect compared to face-to-face companies, and the market evaluates that if investment funds are supplied promptly, large-scale job creation is possible.

The Smart Korea Fund plans to sign a memorandum of understanding (MOU) with mentor companies and financial institutions participating in the investment at the 'Smart Korea Fund Launch Ceremony' scheduled for the 20th. The fund formation will officially begin with the announcement of the fund management company selection early next month.

The Ministry of SMEs and Startups plans to complete the fund formation within this year by quickly proceeding with the selection process, including non-face-to-face online screening. To promote private investment participation, incentives such as first-loss coverage (up to 10%) will be provided. In case of losses in the fund, the mother fund will bear the losses of private investors first.

Minister Park Young-sun of the Ministry of SMEs and Startups said, "The government will boldly support innovative startups and venture companies through investment so that they can create jobs and take the lead in the global market," adding, "The Smart Korea Fund will contribute to advancing South Korea to the next level of the digital economy."

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