The Yoon Suk Yeol administration has announced its economic policy for the second half of this year, raising expectations about its role as pump-priming water for the bio industry’s recovery.
On Tuesday, the government held the 18th Emergency Economic and Public Livelihood Council chaired by President Yoon and finalized policy direction for the second half-year. Critical policy programs included many measures to support the bio-industry, including expanding tax support, fostering human resources, making bold investments into R&D, and innovating regulations.
The government will expand tax credits for national strategic technologies and facilities, including biopharmaceuticals, and improve investment tax credits. It will meet with regional tax officials and consult them on corporate tax deductions and reductions.
The proposal also includes strengthening efforts to efficiently utilize existing financial resources while appropriately maintaining the total investment size of parent funds. The plan is to expand the creation of secondary funds -- funds that repurchase shares of companies held by private equity or venture capital firms -- and consider extending the existence of funds in industries that require long-term investment, including bio.
In R&D support and innovation, the government will focus on investing in future source technologies, such as space and aerospace, quantum, bio, artificial intelligence, and robotics, and make bold investments not tied to short-term results. For instance, it will launch a limit-testing R&D pilot project in October to support bold challenges to new ideas regardless of the likelihood of success by granting authority and independence to the product managers (PMs) in charge.
To strengthen human resource development and vocational training, the government will continue to promote the development of workers in high-tech industries, including semiconductors and biohealth, and attract overseas talents.
The government will also expand training programs in these new technologies. It also intends to quickly finalize regulatory innovation to promote medical data and improve core regulations related to small- and medium-sized venture companies, especially bio startups.
KoreaBIO, an industry association, expressed its welcome.
“The support direction well reflects the characteristics of the bio industry, namely money, brain, and regulation,” it said. “If the scope of the tax credit is expanded to include various biopharmaceuticals in the national strategic technology and commercialization facilities, which had been limited to vaccines, it will greatly contribute to attracting investment and sharpening manufacturing competitiveness of Korean bio companies that have remained discouraged in recent years.”
In addition, the government’s plan to invest heavily in bio-R&D will provide sustainability to the bio-industry ecosystem, which requires long-term investment, the group said.
The government will support R&D projects highly likely to succeed. Pilot projects where failure is acceptable, such as ARPA-H in the U.S., meaning that the industry can create innovative biotechnologies even if they might fail initially, it added.
“Although not included in this project, the Financial Services Commission announced last month that it is considering easing the special listing requirements for blue-chip companies with advanced technologies, including as bio,” it said. “We hope that the scope of advanced technologies to be applied in detail and the evaluation and procedure simplification measures reflecting the characteristics of the bio-industry will be prepared as soon as possible so that listing can be activated.”