Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung-il said the government will remove on-site regulations that stand in the way of corporate investment and support large-scale spending to secure future growth drivers. Growth is picking up on the back of the global semiconductor boom, but structural problems such as a shrinking working-age population and stagnant productivity remain, and the government aims to lift the potential growth rate by spurring corporate investment.
Lee made the remarks on the 7th at a meeting with the heads of six business groups at the Korea Chamber of Commerce and Industry in Seoul, including Chamber Chairman Chey Tae-won and Federation of Korean Industries Chairman Ryu Jin. The gathering doubled as the sixth meeting of a public-private consultative body on corporate innovation support.
"Real change that companies can feel starts with voices from the field," Lee said. "Policy can lead to tangible results when the government and the private sector think through problems together on the ground and find solutions." He said the government will strengthen communication with the private sector, having already reflected in policy the difficulties it heard during joint visits to business sites with the six groups.
The government has been clearing obstacles to corporate investment through two rounds of field-focused measures announced earlier. Among them, it will allow electrical and telecommunications work to be contracted together when semiconductor fabrication plants, or fabs, are expanded. The change reflects industry complaints that the previous requirement to award the two types of work separately made process and safety management difficult.
The government is also pushing to shorten the permit period for a 4 trillion won ($2.8 billion) investment project converting an internal combustion engine plant in Ulsan to electric vehicles, to within one year from the current three. Other field-level regulatory changes under way include allowing permit procedures for factory expansions within large industrial complexes to proceed separately from existing building permits, and setting specific safety standards to allow collaborative and new types of robots to operate without fences.
Assessing recent economic conditions, Lee said growth is expanding on the back of the global semiconductor boom despite difficult conditions. Still, he said, structural problems remain, including a declining potential growth rate caused by a shrinking working-age population and stagnant productivity, as well as polarization across sectors, at a time when burdens on households from prices and other costs persist.
The government plans to pursue both a rebound in the potential growth rate and a narrowing of polarization in a push to make Korea an irreplaceable economy. It will carry out pre-emptive large-scale investment in the future through three mega-projects and improve the business environment by resolving investment bottlenecks. It will mobilize all available funds and policy tools for three social policy areas — housing, jobs and low-income financial support — with particular emphasis on support for young adults.
The business group leaders called for permits, infrastructure development and government support to be delivered quickly in line with corporate investment schedules. They also said artificial intelligence support tailored to smaller companies is needed to narrow the gap between large firms and small and medium-sized enterprises.
On extending the retirement age, they proposed flexible approaches, such as rehiring retirees, that would make use of the accumulated experience of older workers while preserving job opportunities for young people.
