Government to form 100 Bil. Won fund to nurture global drug companies

In order to encourage small- and medium-sized pharmaceutical companies to develop new drugs and expand overseas, the government will create an investment fund worth 100 billion won by July this year. To that end, the Ministry of Health and Welfare will chip in 20 billion won while other state-run organizations such as pension funds and public financial institutions will make up the remaining balance.
The ministry said this on February 20 as part of its “new rule on managing funds to nurture global pharmaceutical companies” in an administrative notice. This is the first time for the government to form an investment fund to foster globally competitive drug companies.
The fund will take the form similar to the Korea Venture Fund, with the Korea Health Industry Development Institute taking the responsibility of managing the fund. The fund management firms will be selected by a nine-person selection committee after deliberation.
Advertisements

President-elect has substantial plans for small & medium sized companies

In January, the Presidential Transition Committee announced a governmental restructuring plan. The plan includes the establishment of the Ministry of Future, Creation, and Science. The new ministry is expected to cover national research and development as well as information and communication technology (ICT), establishing itself as one of the key organizations of the Park Geun-hye administration. The ministry is expected to employ roughly one thousand employees.

During her campaign, Park emphasized that she would promote the nation’s science and technology sector as a main growth engine for Corporate Korea. The new ministry is expected to contribute to the realization of Park’s hope to energize the Korean economy through the promotion of science and technology.

Political observers say that Park and her administration will seek ways to address various problems facing the Korean economy by focusing on areas where Korea has an established competitive edge such as information and communications technology. President-elect Park has pledged to renew the focus on ICT by appointing a vice minister to be in charge of information and communications technology. Korea Communication Commission, Ministry of Public Administration and Security, and Ministry of Knowledge Economy were responsible for ICT matters under President Lee Myung-bak.

In terms of government spending, the new ministry is expected to allocate an annual budget of more than 20 trillion won for Korea’s research, development, and ICT projects.

For full article, see Korea IT Times.

‘Peter Pan’ SMEs loath to grow up

2013_01_SME-growthAbout one-third of SMEs are suffering from what has been dubbed the “Peter Pan syndrome,” meaning they refuse to grow into large enterprises as they hope to benefit from numerous forms of state support. Currently, the government offers SMEs up to 160 incentives and support programs.

Among 105 SMEs that are classified as being borderline large companies, 31, or 29.5 percent, said they have deliberately acted to avoid developing into larger enterprises or are planning to do so, such as by artificially adjusting their organizational structure, according to a survey by the Federation of Korean Industries (FKI).

One company with 249 employees added 80 new staff at its headquarters but falsely credited them as belonging to its overseas subsidiaries to keep it under a certain threshold that entitles it to government subsidies. If companies have over 300 domestic-based personnel on their books they are no longer ranked as SMEs.

According to the Minor Enterprises Act, if a company has over 100 billion won ($93.63 million) in equity capital and has posted average annual sales of 150 billion won or more for the past three years, it automatically loses its SME status.

For full article see Joongang Daily.

Presidential candidates converge on science policy

The three major presidential candidates may differ on key policies but all believe that Korea’s future depends on science and technology for growth. Their policies in the field converge in many aspects, including plans to revive the ministry for science and technology, as well as increasing support for research and innovation.

The Saenuri Party’s Park Geun-hye has the most extensive agenda. An engineering graduate, she prioritizes developing the software industry, supporting start-ups and establishing the Creative Science Ministry. “We must lead Korea’s mid- to long-term growth based on knowledge (of science and technology),” she said on Oct. 17 when announcing the camp’s science and technology policy in Yeouido.

The Democratic United Party’s Moon Jae-in, a former human rights lawyer, suggested reviving the late President Roh Moo-hyun’s science policy with the potential science minister also holding the title of deputy prime minister. Roh had set up a science innovation unit under the wing of the science ministry. “Without science and technology development, there would also be no job creation,” Moon told the science community last month. 

For full article see Korea Herald.

Government Policy Trends in Korea’s Software R&D

The project called World Best Software (WBS) that is setting the stage for Korea to become a software power is currently in the final stage. It is not common for domestic software to be greeted in the global market with success. Even in the domestic market, over 80% of our software is controlled by foreign companies. For three years now the government has been working on WBS as a business-centered project, targeting the world market from the planning stage in order to break through the status quo of Korea’s software. Currently, Korea hasn’t created well-known global brands except for Samsung and LG. The large-scale project has been promoted so that domestic software companies can focus on research and development with a long-term prospective by reducing the burden to make short-term profits.

The WBS project was designed in consideration of various factors to improve the industrial competitiveness of our software companies including supporting the development by small- and medium-sized companies. It will be finished by 2013 after investing 160 billion won over the course of three years.

The WBS project is led by companies in order to create practical outcomes from the development. It allowed for the development of software that meets the market demand by letting individual companies participate in the development consortium. The National IT Industry Promotion Agency (Nipa) took charge of the quality control in all of the development stages. This was done to prevent a case where nobody pays attention to the development outcome in the market due to the hit-or-miss development practice, or having no management system in place. These measures are all for the sake of the development of quality software required in the global market. The project also motivated the development urge of software companies by granting the intellectual property rights resulting from the process of technology development to the actual software development companies rather than the agency in charge of the project. Each software company will be able to get the intellectual property for their share of development.

For full report see Korea IT Times.

GSTEP Guides the Pan-gyo Techno Valley as an R&D Mecca of Global Technology

Pan-gyo Global R&D Complex

When you get to Pan-gyo IC after driving about 20 minutes on Gyungbu Highway, you will definitely encounter a huge variety and abundance of state-of-the-art skyscrapers to the east. This is so-called “Pan-gyo Techno Valley” that Gyeonggi Province is trying to build on the scale of 661,925m2 in Pangyo New Town, Seongnam by investing KRW 5,270.5 billion since 2005.

Two hundred ninety four small and medium-sized businesses in the field of cutting-edge technology are scheduled to move into Pan-gyo Techno Valley. It includes 177 businesses in the IT industry dealing with communications, semiconductors and software development. It also involves 38 businesses in the BT industry which deals with drug development and medical equipment. In addition to that 35 software developers in the game industry will be located there as well.

With Ahnlab at the head of the list, 15 promising domestic corporations such as Institut Pasteur Korea, LIG Nex1, Samsung Techwin, and SK Chemicals have already moved in. Furthermore, buildings of 15 enterprises are now under construction including famous online game companies such as NCsoft, NEXON, NHN Corporation and NEOWIZ. OCON, the producer of popular animation Pororo is situated in Pan-gyo Techno Valley too. New Bundang Line, which transports you from Gangnam to Pan-gyo in only 14 minutes, has been in service since last October, which provides a great accessibility by the public transit. Once all the businesses are settled by 2015, the place will be the biggest cutting-edge global R&D complex in Korea where about 80,000 employees will be working.

For full article see Korea IT Times.

Korea’s smaller IT firms join forces to penetrate global markets

South Korea launched an IT consortium for global exports of IT technologies, said the Korea Trade-Investment Promotion Agency (KOTRA), a governmental agency designed to promote international trade. This consortium will consist mostly of outstanding firms and firms recommended by relevant institutions in the field, and KOTRA will be offering various support to aid overseas expansion of the consortium.

The consortium will include companies specializing in: IT convergence related to energy conservation, mining, network equipments, display equipments and parts, trade information system, corporate solutions, rail management system, RFID (radio frequency identification), and medical IT solutions. A total of 86 small and mid-sized businesses (SMBs) based in Korea will be part of the consortium. The targeted export markets include the US, China, Indonesia, Peru, the Czech Republic, and DR Congo.

“The convergence of IT with other industrial sectors is occurring at a swifter pace than ever, while demand for such packaged products are growing faster than for any products with single specialization. By forming this consortium, we are opening new doors for Korea’s IT exports and establishing an ideal model for win-win cooperation,” explained KOTRA President Oh Young-ho.

Source: Maeil Business.

Confluence of IT, autos tipped as growth engine

Your smartphone vibrates. As you pull it out of your pocket, the following message flashes across the screen: Your vehicle is being broken into.
This futuristic scenario may soon become a reality for owners of Korean cars, according to Hyundai Motor, which rolled out a number of test models this week showing off its experiments with government-subsidized IT innovations by small companies.

Of the four models presented to the media on Wednesday, only one, the third and latest edition of Hyundai’s popular midsized crossover Sante Fe, a sport utility vehicle, is now available on the market.

It features two new breakthroughs that enable the owner to lock and unlock their vehicle from afar, such as inside their office. They can also gun the engine from a long-range just by pressing a few buttons on their phone – particularly useful on a cold winter’s day.

For full article see Joongang Daily.

Hyundai to create ‘talking’ vehicles

The Korean government has plans to support the country’s automobile industry with the aim of developing vehicles that can communicate with drivers in the next decade.

The Ministry of Knowledge Economy (MKE) said Wednesday that it will financially support the high-tech research center of Hyundai Motor Group located in Uiwang, about 25 kilometers south of Seoul.

“The line between the automotive and IT businesses continues to blur as seen in telematics. In line with the fast convergence of the two, we expect that the future of the automotive industry will lie in IT,” MKE official Kim Dong-hwan said. “Through research at the Hyundai high-tech center, futuristic cars will be developed. We will strive to create vehicles that can communicate verbally with motorists by 2020.”

The MKE plans to provide 75 percent of the cost of the center’s software tests carried out in an alliance with state-backed agencies and other private firms.

For full article see Korea Times.

SME stock market to launch this year: FSC

South Korea’s financial regulator said Thursday that a new stock market dedicated to small and medium-sized enterprises would open by the end of this year, offering greater direct financing opportunities to promising startups.

The Financial Services Commission said it will accelerate steps to launch the new market, temporarily named “Korea New Exchange,” by working out listing conditions and public disclosure rules.

The domestic stock market is made up of the main bourse, KOSPI, for blue-chip shares and the junior KOSDAQ with its focus placed on tech-oriented companies.

The envisioned new market will help startups to tap into fresh funding sources, mainly institutional investors keen to discover companies with unique market positions and technologies.

For full article, see Korea Herald.