Software projects to receive 100 tril. in loans

By Yoon Sung-won

The government will provide loans of 100 trillion won ($92.3 billion) for the development of the Internet of Things (IoT) and other software projects to foster new growth engines.

In a joint briefing Wednesday, the Ministry of Science, ICT and Future Planning and four other ministries said the state financing scheme will benefit fifth-generation mobile networks, bio medicine, solar and fuel cells, bio energy and nano semiconductor and sensor technologies.

“We will help finance hydrogen cars, zero-energy towns and the Internet of Things (IoT) in 17 regional Creative Economy Innovation Centers,” said Science, ICT and Future Planning Minister Choi Yang-hee.

These centers will also involve Hyundai Motor, Hyundai Heavy Industries, LG, Doosan, Lotte, Hanwha, CJ, GS, Hanjin, KT, Naver and Daum Kakao.

The innovation centers are a pet project of President Park Geun-hye — Daegu, Daejeon, Gumi in North Gyeongsang Province and Jeonju in North Jeolla Province are currently home to such centers.

“We will promote Pangyo in Gyeonggi Province as a gaming industry cluster and install Finance Zones at the centers to support startups for technology finance and crowd funding.”

KDB and the Industrial Bank of Korea will also contribute 63 trillion won and 56 trillion won, respectively, to the scheme, while Korea Credit Guarantee Fund and Korea Technology Finance Corp. will pay 41 trillion won and 19 trillion won.

“We will provide 100 trillion won to facilitate the development of promising businesses,” Choi said.

An additional 80 trillion won will be spent on conventional industries.

The government said it will also train 5,000 human resource employees such as high-tech researchers to support startups with technology development, and help their entry into the market. Many firms still undergo difficulties up to four years after their foundation.

The government will also push ahead with the integration of finance and technology.

“We will abolish the ActiveX system from banking and financial businesses,” the minister said. “We will also build support centers to nurture the fintech industry.”

Fintech is a newly-coined term joining “finance” with “technology” and refers to new technologies that facilitate online and mobile commerce and financial transactions.

The government also plans to establish 10,000 “smart factories,” which use information and communication technologies to maximize work efficiency in the manufacturing process, by 2020.

It aims to provide suitable smart models for basic industries such as molding and welding factories, while encouraging large conglomerates in the automobile and pharmaceutical sectors to voluntarily introduce the smart models themselves.

Tapping into the Korea-China Free Trade Agreement, the government will set up a “China Desk” to support businesses in entering its market and break non-tariff barriers.

The main goals for diversifying manufacturing-oriented overseas trade items will include cultural content, healthcare services and information and communications technology.