The South Korean government will invest 4.7 trillion won ($3.9 billion) next year into six rising industries to develop new so-called growth engines as the economy faces increasing global challenges. 

Under the plan, the government will focus support on six sectors - data, artificial intelligence (AI), 5G technology, non-memory semiconductors, biotechnology and future mobility. The nearly five trillion won in support to the industries is a 45 percent rise from a similar budget allocated this year. 

The government plans to spend 650 billion won on 5G next year, a rise of 86 percent from this year, while committing 230 billion won to non-memory semiconductors, an increase of 229 percent. Most of the investment will be used to support research and development, incorporate new technology into public services and establish infrastructure such as charging stations for electric and hydrogen-powered vehicles. 

The announcement comes under the Moon Jae-in administration’s policy drive for “innovative growth” from the start of this year that focuses on fostering new sectors beyond established industries that are facing growing uncertainties. The Bank of Korea recently downgraded this year’s economic growth forecast to 2.2 percent from 2.5 percent. Korea recorded 2.7 percent growth last year, which was the slowest in six years. The emphasis on “innovative growth” is an attempt to avoid the headwinds through new industries. It is also a shift in policy direction from “income-led growth” that attempted to spur economic growth through direct increases in wages. 

Plans are highlighted to improve competitiveness by fostering 200,000 new experts in the budding industries by 2023. The government announced that it will increase the number of graduate schools that specialize in AI to eight from the current three and establish 30 education centers. The support to the six industries will be included in next year’s budget proposal to the National Assembly in September. The government added that it will also announce long-term plans to develop future mobility vehicles, AI and 5G.