"Distinction Between Large and Small Companies Is Meaningless... Investment Should Focus on Areas with High Global Competitiveness"

11 Cases and 8.4 Trillion Won Approved in Four Months
"Investment Focused on Advanced Industries Is a Global Trend"
National Participation Growth Fund to Launch on the 22nd; Government to Shoulder Losses First

Experts have suggested that in order to shift capital flows away from real estate and collateral-based finance toward productive sectors such as advanced industries, the government and policy financial institutions must take on the initial risks and expand private investment participation. Additionally, regarding the debate over the National Growth Fund being used to support large corporations, some argue that selection and concentration are inevitable to secure competitiveness in advanced industries such as artificial intelligence (AI) and semiconductors. This is based on the view that the growth of the entire industrial ecosystem, including large corporations, is important.

Lee Eokwon, Chairman of the Financial Services Commission, is attending the "The First Start Filling the Future, Youth Future Savings Unboxing Talk Concert" held at the Seoul Exclusive Education Center of the Small Enterprise and Market Service in Jongno-gu, Seoul on May 14, 2026, and delivering a greeting. Photo by Dongju Yoon

Lee Eokwon, Chairman of the Financial Services Commission, attended the "National Growth Fund Performance Review and Development Seminar" held at the IR Center of Korea Development Bank in Yeouido, Seoul, on May 18, and said, "The National Growth Fund is significant in that it has shifted the financial paradigm from 'conservative management' to 'productive investment,' going beyond simply providing funding."

Over the past four months, the National Growth Fund has approved a total of 11 cases, providing KRW 8.4 trillion in financial support. Chairman Lee said, "By serving as a catalyst for high-risk and innovative sectors, the fund is lowering the cost of capital in productive areas and providing an opportunity to redirect capital flows, which have been centered on real estate and collateral, toward future growth sectors. It is also an encouraging change that the private financial sector is gradually moving toward sharing risk with companies."

At the seminar, participants exchanged opinions on the issue of distorted capital allocation, which has been pointed out as a cause of low growth, and the necessity of productive finance to improve this situation.

Ha Keonhyeong, Research Fellow at Shinhan Securities, the first presenter, said, "Despite the massive liquidity supplied to the domestic financial system, capital continues to flow into real estate and collateral-based lending. Among bank loans, the proportion of high-risk technology industries such as information and communication and professional scientific technology, where it is difficult to secure collateral, falls short of even 10%."

Ha emphasized that, due to the nature of advanced industries, the state's preemptive role is crucial. He explained, "The five-year survival rate of domestic startups is only 33.8%, which shows that investment in advanced industries is extremely risky. Unless the state shares the initial risk, it is difficult for private capital to flow in." He pointed out that the state's risk-sharing in advanced industries and infrastructure investment is a key factor that determines industrial competitiveness, highlighting projects with ripple effects across the ecosystem such as support for the Pyeongtaek semiconductor manufacturing plant and direct investments in AI semiconductor companies.

Lee Byungyoon, Senior Research Fellow at the Korea Institute of Finance, who gave the second presentation, cited examples such as the Shinan-Uui offshore wind power project, expansion of AI semiconductor manufacturing plants, and direct investments in AI semiconductor companies, and evaluated that "these are highly meaningful in terms of essential infrastructure development for advanced strategic industries and in inducing private investment."

Regarding the recent controversy over the National Growth Fund supporting large corporations, Lee said, "Since it is support for future strategic industries and the entire ecosystem, distinguishing between large and small-to-medium-sized enterprises is meaningless. From the perspective of securing economies of scale for overwhelming competitiveness, it is desirable to focus national resources where there is the greatest potential for global competitiveness."

He also emphasized that the National Growth Fund is preparing support measures for the SME and mid-sized company ecosystem amounting to over KRW 50 trillion over the next five years, arguing that concerns over excessive focus on large corporations are misunderstandings.

In response to concerns that preemptive government investment could crowd out private investment, he suggested that the opposite effect is actually greater. He stated, "If the government takes on risk as a subordinated investor, not only does the actual risk decrease, but the signal that 'this is a government-backed project' attracts private investment, creating a larger market."

Regarding concerns that the recent concentration of investment in specific advanced industries such as AI is overheating corporate valuations, he explained that this is a global trend. In 2025, global venture investment expanded to USD 512.1 billion, up 31% from the previous year, reaching the third-highest level on record. In particular, in just the fourth quarter of last year, eight AI companies raised more than KRW 50 trillion. The concentration of investment in AI companies is not unique to Korea, but rather a worldwide phenomenon.

The importance of long-term patient capital was also emphasized. Park Sunghyun, CEO of Rebellions, the first company to receive direct investment from the National Growth Fund in the AI semiconductor sector, said, "I believe success in the semiconductor field is only possible when long-term capital is added to technological prowess and when the industrial ecosystem of an entire nation comes together and operates, not just the capabilities of individual companies. We fully appreciate the significance of the National Growth Fund providing support as patient capital."

The Financial Services Commission plans to launch the "National Participation Growth Fund" on May 22, in which the general public can participate. The product will offer income tax deductions and separate taxation on dividend income, and the government will take on losses first. The commission plans to allocate at least 20% of total sales to products exclusively for low-income citizens, aiming to promote both asset formation for the public and participation in advanced industry investment.

Kang Seongho, Director General of the National Growth Fund at the Financial Services Commission, encouraged participation, saying, "The reason the National Participation Growth Fund offers income tax deductions is to compensate citizens who provide long-term patient capital (with a five-year maturity), and it is necessary to further incentivize the general public to participate."

Meanwhile, prior to the seminar, the Korea Development Bank and regional financial institutions began strengthening cooperation to spread the National Growth Fund to the regions and to discover local growth projects. On this day, the Korea Development Bank signed financial business agreements (MOUs) with BNK Financial Group, iM Financial Group, JB Financial Group, and Suhyup Bank to expand information exchange and joint investments.

Park Sangjin, Chairman of the Korea Development Bank, said, "The National Growth Fund also plans to support over 40% of its total funding to the regions to foster advanced strategic industries in each region. Through cooperation among financial institutions, we will actively identify regional growth projects and ensure smooth financial support."

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