S. Korea to lift regulations, expand support for industrial clusters

All News 12:23 June 01, 2023

By Kang Yoon-seung

SEOUL, June 1 (Yonhap) -- South Korea plans to revamp its policy on fostering industrial clusters to establish a self-sustaining ecosystem and expand ties with global partners, the finance ministry said Thursday.

The move is in line with the government's efforts to build global business concentrations that can bring up innovative firms in high-end industries such as chips and biotechnology, according to the Ministry of Economy and Finance.

"Compared to clusters in advanced countries with self-sustaining ecosystems, South Korean clusters lack the same ecosystem that interconnects industries, academic bodies and institutions, as they are operated separately by government bodies," the ministry said.

To this end, the government will lift related regulations to induce cluster projects led by regional governments, and offer legal and accounting consulting services to businesses in such zones.

It will expand shared facilities and equipment within the clusters, and induce more ventures and start-ups to use them.

Vouchers will also be offered to allow companies based outside the clusters to use such facilities.

"By offering step-by-step support for innovative ventures and start-ups with growth potential, we plan to foster anchor companies that can lead the clusters' ecosystem," the ministry said.

To establish a "virtuous cycle" of starting a business, growth, profit and re-investment, the South Korean government will offer tax cuts on merger and acquisition projects by small and medium-sized companies.

For example, the country will offer a tax credit of 10 percent of the value of companies' technologies in such mergers.

At the same time, South Korea will seek partnerships with leading institutions around the globe, such as the Massachusetts Institute of Technology, the ministry added.

In line with such efforts, the country will roll out the Boston-Korea project, which aims to connect South Korean institutions with those based in Boston, including Harvard University.

"(The project) centers on utilizing the advantages of local institutions with those based in Boston to address challenges in the bio sector and fostering key workforces, namely medical scientists in the area," the ministry said.

Under the project, South Korean organizations can provide abundant medical data sourced from local hospitals, particularly focusing on Asian populations, while U.S. institutions possess robust research capabilities, it added.