The Korean government is intensifying its efforts to enhance national industrial competitiveness by expanding support for advanced strategic industry clusters. This initiative was discussed during a joint policy meeting between the Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy on February 6, 2024. The meeting was organized in response to rapid changes in global technology and industrial structures, such as the spread of AI and intensifying international competition. The goal is to strengthen Korea’s position in key sectors like semiconductors, batteries, and biotechnology through targeted fiscal support.
The policy will directly impact companies investing in advanced strategic industry clusters, particularly those located in provinces far from the Seoul metropolitan area. Participating stakeholders include government officials, industry associations from 13 sectors such as semiconductors, batteries, and shipbuilding, and research institutes. The government plans to double the national funding limit for infrastructure costs—such as roads, water, wastewater, and electricity—for companies establishing themselves in these clusters. This move aims to reduce the financial burden on businesses and encourage investment in regional industrial growth.
Implementation of the expanded support will follow a decision by the National Advanced Strategic Industry Committee, chaired by the Prime Minister, in the first half of 2024. The government will finalize company investment scales and apply the increased funding limits accordingly. Additional measures, such as the creation of a special semiconductor fund, are also planned in line with new legislation. The ministries will continue to hold sector-specific meetings to refine and operationalize these support measures, ensuring they are reflected in future budget allocations.
Frequently asked questions include: What types of infrastructure are covered? The support includes roads, water supply, wastewater treatment, and electricity for industry clusters. Who qualifies for the expanded support? Companies investing in advanced strategic industry clusters located outside the Seoul metropolitan area are eligible. When will the new funding limits take effect? The changes are expected to be implemented after committee approval in the first half of 2024.
Metaqsol opinion: The Korean government’s expansion of infrastructure funding for advanced strategic industry clusters in provincial areas is a targeted response to global competition and the need for regional economic balance. By doubling the national funding limit for infrastructure costs, the policy lowers barriers for companies considering investment outside the Seoul metropolitan area. The inclusion of industry feedback and a phased, committee-driven implementation process enhance the policy’s credibility and effectiveness. If executed as outlined, this initiative should help Korea maintain its leadership in high-tech sectors while promoting more equitable regional development.