The government plans to expand its financial support model to share corporate growth outcomes, starting with an equity investment-based research and development (R&D) pilot program next year. This initiative aims to shift away from traditional grant and subsidy-based support, establishing a structure where public entities can reinvest in companies based on their performance.
On November 13, the Ministry of Economy and Finance announced that Deputy Minister Jo Yong-beom held a policy meeting with Kwon Nam-hoon, head of the Korea Institute for Industrial Economics and Trade, at the Korea Financial Information Service in Seoul. They discussed the direction of financial support for industrial policy and the changes in the job market due to the spread of artificial intelligence (AI).
Deputy Minister Jo stated, "Support centered on grants and subsidies has lacked mechanisms for the public to share in the outcomes of corporate growth. We will expand equity investment-based support starting with the pilot program in 2027 and strengthen our management system."
Equity investment-based financial support allows the government to acquire stakes in companies instead of providing grants, enabling shared benefits from corporate growth. The Korea Institute for Industrial Economics and Trade suggested that expanding this type of support is necessary to promote technology development and commercialization in strategic technology sectors.
As an example, the article referenced the U.S. government's conversion of approximately $8.9 billion in grants to Intel into a 10% equity stake. It also mentioned the European Union's system that combines R&D grants with equity investments.
The institute emphasized that equity investment-based support should create a virtuous cycle where government assistance leads to corporate growth, and the shared outcomes are reinvested into the economy.
Analysis indicated that financial support for domestic industrial policy is dispersed across small-scale projects. Jo Jae-han, head of the Industrial Future Policy Center at the institute, noted that a comparison using the OECD's industrial policy statistics (QuIS) revealed that South Korea has the highest number of industrial policy projects among the G20 countries, but the scale of individual projects is small.
To enhance the effectiveness of industrial policy, Jo suggested consolidating small-scale projects and focusing financial support on core areas.
The impact of AI on the job market was also discussed. Min Soon-hong, head of the Innovation Talent Policy Team at the institute, explained that an analysis combining 22.38 million online job postings with AI usage data showed a significant decrease in job postings for positions where AI can perform tasks, such as software developers.
In fields with many standardized tasks, such as management support and accounting, a preference for experienced candidates has also been observed. The institute analyzed that changes in the labor market due to AI are appearing earlier in the hiring stages than in actual employment statistics.
Deputy Minister Jo emphasized, "As the impact of AI on employment becomes more visible, we will expedite the government's response to changes in industry and jobs."
Kwon Nam-hoon remarked, "Major countries, including the U.S. and China, are enhancing the effectiveness of their industrial policies by using various means for concentrated support. This approach must be backed by evidence and thorough analysis to present policy alternatives."
The Ministry of Economy and Finance plans to incorporate the research findings and policy proposals discussed into future financial operations and improvements in financial systems.
* This article has been translated by AI.
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