[2021 Budget] 29.1 Trillion Won for Energy Transition and Manufacturing Innovation... 22.9% Increase Rate Ranks 1st

Manufacturing Innovation and Export Growth
Expansion of Green New Deal Investments for Energy Transition
Record-High Mother Fund Contributions...Fostering the Venture Ecosystem
Strengthening Support for Self-Employed and Small Business Owners

President Moon Jae-in emphasizing the importance of strengthening competitiveness in the offshore wind power industry and green energy at the event "Korean New Deal, Green Energy Site - The Wind Blows," held on July 17 in the offshore wind power demonstration complex in Buan-gun, Jeollabuk-do. (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The government has decided to increase Green New Deal investments and accelerate manufacturing innovation to transition to new and renewable energy. To this end, the budget for the industrial, small and medium enterprises, and energy sectors for next year has been increased by 22.9% compared to this year. The '22.9%' is the highest growth rate among the 12 major sectors for which the government allocates the budget.

The Ministry of Economy and Finance announced on the 1st that the '2021 budget proposal' containing these details has passed the Cabinet meeting.

Source: Ministry of Economy and Finance

First, the government will invest 5.4894 trillion KRW to accelerate manufacturing innovation. Through this, it will upgrade regional industrial complexes and support the smart factory dissemination project.

Specifically, to accelerate innovation in seven smart industrial complexes, the government will expand the construction of logistics (from 3 to 4) and energy platforms (7 new platforms through supplementary budgets) that resident companies can jointly use. Gwangju and Ulsan will be additionally designated as Free Economic Zones, and 3 billion KRW will be invested to help create industry-academia-research innovation clusters.

Ahn Il-hwan, the 2nd Vice Minister of the Ministry of Economy and Finance, visited the Sihwa Plating Complex and the Smart Manufacturing Innovation Center in Siheung-si, Gyeonggi-do, on June 26 as part of a visit to the Korean New Deal project sites. He inspected augmented reality (AR), virtual reality (VR), industrial artificial intelligence (AI), and smart process lines. (Photo by Yonhap News)

The smart factory dissemination target has been raised from 5,500 to 6,000. With an investment of 1.2 billion KRW, three new digital clusters will be established to support integrated smart factory systems among groups of companies within the same value chain.

1.1996 trillion KRW has been allocated for trade and investment attraction. The fund contribution to the Korea Trade Insurance Corporation will be increased from 300 billion KRW to 400 billion KRW to seek new export engines such as large-scale overseas infrastructure orders and new business ventures. The total additional support for trade policy is 5.4 trillion KRW.

Yoo Eun-hye, Deputy Prime Minister for Social Affairs and Minister of Education, Kim Tae-nyeon, Floor Leader of the Democratic Party of Korea, and others visited Gangseo High School in Gangseo-gu, Seoul on July 17 to inspect the solar panels installed on the rooftop. The "Green Smart School" project, which installs solar panels and eco-friendly insulation materials to promote energy savings in 715 aging buildings across 519 elementary, middle, and high schools, is one of the Green New Deal initiatives.
(Photo by Yonhap News)

To expand new and renewable energy such as solar and wind power and establish a hydrogen economy system, 4.6104 trillion KRW will be invested.

Funds, research and development (R&D), and site support for large-scale solar power complexes and wind power infrastructure construction will be increased by 62.5%, from 800 billion KRW to 1.3 trillion KRW.

Nine hydrogen production bases will be established, and 16 hydrogen tube trailers will be supported, focusing on building essential infrastructure urgently needed in the 'production-distribution-safety' cycle.

37 trillion KRW will be invested in the Korea Fund of Funds and the Smart Korea Fund. The 1.7 trillion KRW contribution to the Korea Fund of Funds is the largest ever. Including fund contributions, 4.9174 trillion KRW has been allocated to support startups and ventures.

Support will be focused on building venture commercialization infrastructure in promising fields such as non-face-to-face and digital sectors. A commercialization voucher will be newly introduced for 300 companies, and the 'Green Promising Startup 100' will be created. This year, 20 companies will be prioritized for discovery.

Due to the resurgence of the novel coronavirus infection (COVID-19), the area around Cheonggyecheon Tool Market in Jung-gu, Seoul, a dense area of small business owners in the Seoul metropolitan area including Seoul and Gyeonggi, showed a bleak scene on the 21st amid continued economic downturn. Photo by Kim Hyun-min kimhyun81@

11.8677 trillion KRW will be invested to foster small and medium enterprises and small business owners. The guarantee amount of regional credit guarantee funds will be increased by 76.5%, from 25.5 trillion KRW to 45 trillion KRW.

Loans for small business owners, including 1 trillion KRW in special management stabilization funds for disaster and crisis-affected small business owners, will be increased by 56.5%, from 2.3 trillion KRW to 3.6 trillion KRW.

The number of smart stores for management innovation will increase 20.8 times, from 1,054 to 23,000 locations. Smart workshops will expand from 20 companies to 6,000 companies.

Source: Ministry of Economy and Finance

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