According to Yonhap News,
(SEOUL=Yonhap News) South Korea is planning to sharply raise state-funded R&D spending next year to nurture and develop key industrial materials and equipment largely imported from overseas, as well as redouble efforts to localize them.
According to government sources, the government is planning to propose its R&D spending at some 22 trillion won (US$18 billion) for next year, sharply up from this year's 20.5 trillion won.
The figure also marks a rise from 19.5 trillion won in 2017 and 19.7 trillion won in 2018.
The planned hike in the state R&D spending comes as Japan last month implemented export curbs of key industrial materials to South Korea, which are crucial for the production of semiconductors and display panels.
Early this month, Japan also officially stripped Seoul of its preferential trading list, a move seen as a retaliation against a Seoul court ruling that ordered Japanese firms to compensate victims of forced labor during World War II.
"We are finalizing details (for next year's budget), and what's clear and important is that R&D spending may increase sharply," an official at the finance ministry said.
The country's trade ministry, meanwhile, said earlier will spend 7.8 trillion won over the next five years to nurture its materials, parts and equipment sectors and trim its dependence on Japanese imports in the latest move to cope with the neighbor's economic retaliation.
The massive spending is also aimed at promoting R&D activities for 100 key strategic items, according to the industry ministry.
Of the 100 key strategic items, the industry ministry said it plans to secure supplies of 20 items within a year by reaching out to suppliers in other countries, including the United States and China.
The government will also ease various regulations, including labor rules, to help local industries to speed up the development of key technologies as well.
South Korea will also help local firms seek acquisitions of foreign rivals that hold high-level technologies by providing them with financial and tax incentives estimated at around 2.5 trillion won.
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Source: Yonhap News (August 11, 2019)