Announcement of 'SW Promotion Strategy'... Strengthening Fair Compensation and Easing Restrictions on Large Company Participation

Reflecting Appropriate SW Pricing in Budgeting and Clarifying Criteria for Paid and Free Maintenance
Introducing 'Private Investment-Type SW Project System' Utilizing Private Capital
Easing Large Corporation Participation Restrictions... Establishing Participation Recognition Criteria Suitable for Overseas Projects

[Asia Economy Reporter Han Jinju] Ahead of the enforcement of the Software (SW) Promotion Act, the government plans to allocate budgets reflecting appropriate compensation for software and expand procurement projects that promote the use of commercial software. It will also work on improving the system that restricts the participation of large corporations.

On the 3rd, the Ministry of Science and ICT announced that at the 5th Innovation Growth Strategy Meeting and the 43rd Economic Ministers' Meeting, related ministries jointly finalized the 'SW Promotion Implementation Strategy.' This detailed implementation strategy was prepared to provide policy support ahead of the full revision of the Software Promotion Act, which will be enforced on December 10 after 20 years.

This strategy aims to innovate the SW system and strengthen competitiveness by pursuing tasks such as ▲ receiving fair compensation for SW ▲ supporting the activation of private investment ▲ fostering SW companies at each growth stage ▲ improving public SW projects ▲ nurturing regional SW ecosystems ▲ talent development ▲ and enhancing global competitiveness.

The strategy strengthens the long-standing issue of receiving fair compensation in public SW projects. Although the proportion of SW projects within the overall ICT projects is increasing, compensation for SW projects and maintenance costs are not properly paid. The government will improve the SW rate management and compensation calculation guidelines to allocate budgets reflecting appropriate compensation and introduce a differential scoring system in technical evaluations to increase the likelihood of winning bids by technically excellent companies. Direct procurement of goods will also be included under subcontract supervision to prevent delays in payment for goods, and procedures for handling complaints about disadvantages to ordering parties will be established. Clear standards for free and paid defect repairs will be defined during the post-management phase.

A 'private investment-type SW project system' that utilizes private capital and technology in public SW projects will also be introduced. Exceptions will be applied to restrictions on large corporation participation, and incentives such as exceptions to SW impact assessments and separate ordering, as well as additional points for technologies proposed first by the private sector, will be provided. Additionally, the SW impact assessment disclosure, which determines whether public SW projects infringe on the private market, will be made mandatory, and projects directly purchasing commercial SW will be expanded to those with budgets of 300 million KRW or more.

To expand the SW market, improvements to the system restricting large corporation participation will also be pursued. Since 2013, the government has restricted the participation of large corporations with mutual investment restrictions in public SW projects (excluding national security and new technology projects). The government will establish detailed criteria for recognizing large corporation participation suitable for overseas projects and, upon approval through review, will impose conditions for joint participation with small and medium enterprises. Cooperation points will be expanded to include technical support and personnel training, and if specialized technology or urgent fault response is needed, large corporations will be allowed partial participation as joint contractors or subcontractors through review. An early review system will be introduced to allow large corporations to participate from the project planning stage.

Customized support programs tailored to each stage of company growth, from startup to overseas expansion, will also be operated. By 2023, 'SW Dream Town' will be established in Pangyo to provide workspace for startups in the SW field and support emerging companies. Additionally, to foster talent, two more AI graduate schools will be selected, and SW-focused universities will be reorganized to expand participation opportunities for small and medium universities. For new technology education targeting current employees, 'Innovation Squares' will be operated in five major cities nationwide, and support for smart factory job transition training will be provided.

Minister of Science and ICT Choi Ki-young said, "The Software Promotion Act is set to be enforced on the 10th, and the 'SW Promotion Implementation Strategy' was prepared to ensure effectiveness by backing the legal amendments with policies and budgets." He added, "We will actively communicate with the industry so that system improvements and support policies take root in the field through efforts among government ministries and private sector participation, enabling the software industry to advance."

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