The South Korean government is set to support local governments in developing regional growth engine plans to drive economic growth. By 2030, the government aims to establish 500 artificial intelligence (AI) factories and implement a 'full-stack AI factory' where all processes are operated by AI starting next year. Additionally, a resource security fund will be established to reduce dependence on crude oil and gas imports and to respond to supply chain crises.
On October 6, Minister of Trade, Industry and Energy Kim Jeong-kwan presented key policy directions for local-led growth, the transition of manufacturing to AI (M.AX), industrial and resource security, and the goal of becoming a top five exporter during a National Assembly audit by the Industry, Trade, and Energy Committee.
Kim noted that while key indicators such as exports and investments, particularly in semiconductors, have improved, the benefits have not yet been felt by the public and local communities. He also highlighted increasing uncertainties in the external trade environment due to global AI competition and geopolitical supply chain instability.
In response, the Ministry of Trade, Industry and Energy has announced a local investment plan for anchor companies worth 1,600 trillion won, which includes three major mega-projects, and has been promoting M.AX. The ministry is proactively restructuring key industries such as petrochemicals and steel to address the energy crisis stemming from the Middle East.
Starting next year, the government will intensify local-led economic growth. Kim stated, "We will support local governments in preparing regional growth engine plans within the year and push for the enactment of the 'super-wide special zone law' based on inter-agency cooperation to promote bold regulatory reforms. We will also connect seven major support packages, including finance and taxation, to back local investments by companies and meticulously monitor the implementation process of mega-projects to ensure they proceed without delays."
The M.AX initiative will also be accelerated. The government plans to develop technologies and conduct demonstrations to implement full-stack AI factories where all processes are operated by AI by 2030. Starting next year, the government will develop manufacturing AI solutions that digitize tacit knowledge in manufacturing and establish a manufacturing data library to utilize high-quality manufacturing data as a national core asset. The 'Industrial Ecosystem Co-Growth Project' will also be launched to spread the AI innovation achievements of anchor companies to their partners.
In the area of industrial and resource security, the focus will be on reducing dependence on specific regions and countries for crude oil and gas. The ministry aims to increase the share of non-Middle Eastern crude oil to 50% by 2035 and reduce dependence on specific countries for gas to below 30%. To strengthen the supply chain of critical minerals, the ministry is considering restoring the overseas investment function of the Korea Mine Rehabilitation and Mineral Resources Corporation and will establish a resource security fund to secure long-term resource security financing.
To enhance the domestic ecosystem for materials, parts, and equipment, the government plans to support research and development (R&D), infrastructure development, and workforce training centered around specialized zones for materials and parts. It will also respond thoroughly to protect core technologies from technology leaks and proactively prepare for risks across the supply chain.
The government is also pursuing a leap to become a top five exporter by diversifying export items, markets, and exporters. It aims to foster strategic items such as K-consumer goods and nuclear power while targeting emerging markets in the Middle East and Latin America, thereby expanding the export capabilities of small and medium-sized enterprises.
Regarding the joint investment project announced by South Korea and the United States on October 1, the government reaffirmed its commitment to prioritize national interests in subsequent procedures. This initiative aims to expand South Korean companies' entry into the U.S. market and create opportunities for global market expansion.
Kim concluded, "We will fully commit to accelerating industrial innovation through local-led growth and rapid manufacturing AX, while strengthening our industrial and resource security capabilities and making policy efforts to establish ourselves as a top five exporter. We will take the voices from the industrial field as the starting point for our policies, swiftly support where companies need assistance, and seek new solutions for problems that cannot be resolved through existing methods."
* This article has been translated by AI.
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