Ministry of SMEs and Startups to Recruit Large Corporations and Public Institutions to Support Smart Factories

[Asia Economy Reporter Kim Jong-hwa] The Ministry of SMEs and Startups announced that it is recruiting lead organizations such as large corporations and public institutions to participate in the 'Large-Small Win-Win Smart Factory Support Project.'

The 'Large-Small Win-Win Smart Factory Support Project' is part of the 'ICT Convergence Smart Factory Distribution and Expansion Project,' where the private sector (lead organizations and adopting companies) collaborate to build smart factories, and the government supports a portion of the construction costs in this public-private partnership smart factory support project.

Lead organizations can recruit small and medium-sized enterprises (SMEs) and mid-sized companies wishing to introduce smart factories based on their own criteria. Depending on the ratio of government and private support, the project is largely divided into ▲Type 1 (Basic, Advancement 1, Advancement 2) and ▲Type 2 (Exclusive for Small Enterprises).

Type 1 has a maximum government support ratio of 30%, with a minimum private burden ratio (lead organization + adopting company) of 70%. The government support amount varies by advancement stage: up to KRW 42 million for Basic, KRW 120 million for Advancement 1, and KRW 240 million for Advancement 2. The private burden requires lead organizations such as large corporations to cover at least 30%, while adopting companies bear up to 40%, allowing adopting companies to build smart factories with relatively low financial burden.

Type 2 is a small-scale support project (up to KRW 20 million) at the basic stage targeting small enterprises to lower the entry barrier for smart factory introduction. The government and lead organizations each cover 50% (up to KRW 10 million each), enabling adopting companies to build simplified smart factories without additional construction costs.

Lead organizations can participate by forming consortia with collaborating institutions (for fund management, administrative support, etc.), contributing to the Large-Small Win-Win Cooperation Fund, and submitting an application for the win-win smart factory project. Contributions to the fund are eligible for benefits such as tax deductions, tax incentives, bonus points in the Win-Win Growth Index, and public institution evaluations.

Additionally, starting this year, in line with the smart factory advancement policy direction, the win-win project added the 'Advancement 2' support category. Reflecting field suggestions, the matching project costs, previously recognized only in cash, now partially accept in-kind contributions (labor costs), allowing additional government support funds to be connected (matched).

Last year, nine large corporations including Samsung Electronics, Hyundai Motor Group, LS Electric, and POSCO, along with 23 public institutions such as Korea Hydro & Nuclear Power, Korea Electric Power Corporation, and Korea Western Power, participated, contributing a total of KRW 27 billion to support the construction of smart factories for about 1,000 companies.

Companies and public institutions wishing to participate as lead organizations can apply until June 30, but the application may close early if the government support funds available for matching are exhausted. Lead organizations wishing to participate can apply through Smart Factory 1st Street, operated by the Smart Manufacturing Innovation Promotion Team.

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