Busy with Industrial Restructuring... Hong Nam-ki Says "Big 3 Regulatory Reforms and Private Investment Activation Insufficient"

by Moon Chaeseok

Published 25 Sep.2021 12:00(KST)

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki presides over and speaks at the 'Innovation Growth BIG3 Promotion Meeting with Related Ministers' held on the 23rd at the Government Seoul Office in Gwanghwamun, Seoul. (Photo by Ministry of Economy and Finance)

[Sejong=Asia Economy Reporter Moon Chaeseok] Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki pointed out that efforts for regulatory reform to foster the Big 3 industries (system semiconductors, future cars, and bio-health) are insufficient. As the pace of low-carbon and digital industrial transformation accelerates, global competition for hegemony in the Global Value Chain (GVC) restructuring is intensifying, and Korea’s policies must also lead to the activation of private investment.

On the 23rd, Deputy Prime Minister Hong held a meeting with related ministers of the Big 3 Promotion Committee at the Government Seoul Office and said, “Among the 463 support tasks discussed since the launch of the Big 3 Promotion Committee in December last year, only 12.5% are related to regulatory reform,” adding, “This is still insufficient to induce private investment activation.”

He emphasized, “On the ground, difficulties such as manpower shortages, power transmission line installation issues, and unreasonable regulations are still being raised.” Attendees at the meeting included Minister of Trade, Industry and Energy Moon Seung-wook, Minister of Environment Han Jeong-ae, Minister of SMEs and Startups Kwon Chil-seung, and Financial Services Commission Chairman Ko Seung-beom.

Deputy Prime Minister Hong’s message is interpreted as stemming from the judgment that policy support through fiscal spending alone will make it difficult to gain competitiveness in the ‘GVC hegemony competition.’ According to the Ministry of Economy and Finance, the government increased the Big 3 industry support budget from 4.4 trillion won last year to 6.3 trillion won next year, a 43% increase over two years. Hong explained, “Among the Big 3 support tasks, those related to ‘fostering support (financial support)’ account for 50.1%.” This is an excessively large proportion compared to the 12.5% of support tasks related to regulatory reform. Going forward, the government plans to focus on four directions: ▲ regulatory reform and ecosystem creation ▲ firm implementation and acceleration of existing measures ▲ public-private cooperation and collaboration between large and small enterprises ▲ strengthening communication with the field.

The government announced that regarding the ‘Innovative Enterprise National Representative Project,’ it plans to select an additional 400 innovative enterprises in the fourth round by the end of the year, increasing the number of supported companies to 1,000 by next year. Since last year, three rounds of companies have been selected and supported with 3.8 trillion won. In addition, to prepare for domestic and international conditions such as ▲ strengthening protectionism ▲ supply chain internalization ▲ submission of the national greenhouse gas reduction target (NDC), the government will supplement tasks and reduce field difficulties in the Big 3 industries.