The development of environmental technology is essential to improve environmental quality and is emerging as a promising growth engine that can lead to the fostering of environmental industry and make inroads into overseas markets. In this regard, the government is endeavoring to facilitate the development of environmental technology.
So far, the Ministry of Environment has offered support for the development of the environmental technologies of domestic businesses and researchers through key R&D projects such as the G-7 Environmental Engineering Technology Development Project (1992-2000), Next-Generation Core Environmental Technology Development Project (2001-2010), and Eco-Innovation Technology Development Project (2011-2020).
The G-7 project, for which the Ministry invested a total of 180.9 billion won in R&D, is considered to have significantly enhanced the level of domestic environmental technologies and laid the foundation for R&D to develop environmental technologies. For the Next-Generation Project, the government invested a total of 879.1 billion won over the past 10 years, along with 357.6 billion won from the private sector, to focus on the development of technologies to cope with newly emerged environmental issues such as environment conservation & restoration, pollution prevention, and fine dust and endocrine disruptors, which are relatively falling behind the end-of-pipe field. Also, the government established a 10-year comprehensive plan for Next-Generation Project, and prepared the Technology Road Map (TRM) to systematic promote technology development.
For the Eco-Innovation Project, the government plans to inject a total of 1.553 trillion won of national funds, coupled with 600 billion won of investment from the private sector, for the decade, which will be concentrated in relevant technology commercialization and growth engines. Examples of technology fields to be fostered through this project include water industry technology, eco-friendly automobile technology, and technology to recover useful resouces from waste. Despite its initial stage, this project is showing remarkable results in the application and registration of intellectual property rights (894 cases) and commercialization performances.
Also, as there is a growing demand for R&D projects for issues associated with environmental policy, the Ministry is promoting various projects, including a soil-groundwater pollution prevention technology development project, an environmentally converged new technology development project converged with nanotechnology and biotechnology, a project to facilitate the industrialization of promising environmental technology that supports verification research after the completion of technology development, an environment health technology development project, a project to develop strategic technology responding to climate change, and a waste-to-energy technology development project.
The Ministry of Environment plans to proceed with strategic and systematic R&D investment according to the Eco-TRM (technology road map) 2022 and promote various measures to use and commercialize superior technologies developed through the R&D projects, including technology exhibitions, consulting, technology transfer and public relations via media outlets.
According to a survey of environmental industrial statistics, the number of businesses related to the environment in Korea is 49,913 as of 2012: manufacturing has 14,913 (29.8%); wholesale & retail 15,801 (31.6%); construction 3,808 (7.6%); waterworks 287(0.5%); services 3,513 (7.0%); and sewage & waste disposal, material recycling and environment restoration 11,591(23.2%). The domestic environmental market has been steadily increasing, with a market size of KRW 44. 6 trillion in 2009, KRW 55.5 trillion in 2010, KRW 59.3 trillion in 2011 and KRW 82.2 trillion in 2012.
However, the domestic environmental industry is meager, as its average sales accounts for KRW 1.64 billion, and the average number of employees is just 5.8 as of 2012. Moreover, as investment in the environmental infrastructure of domestic businesses has reached the saturation point, the growth rate of the domestic environment market is decreasing. Thus, now is the time to advance into overseas markets.
The Ministry of Environment is making a multifaceted support policy to help relatively small environment-related businesses grow quantitatively as well as qualitatively through various programs, including establishing the infrastructure to foster the domestic environmental industry, training of experts and offering policy fund.
- Environmental Industry Application Research Complex
The Ministry is establishing environmental industry application research complexes for small and medium-sized businesses to provide comprehensive support for the entire process of business operation from R&D and commercialization to entering overseas markets. The metropolitan environmental industry application research complex will be located within the Environment Research Complex in Incheon and is under construction on about 180,000 m2 of land with funding by the national treasury of KRW 156 billion. The building is scheduled for completion by 2017. The environmental industry application research complex will consist of research support facilities and offices, a pilot test facility, application research facility and prototype development support facility, and measures to support companies within the complex for new technology certification and technology verification, commercialization and overseas market advance are currently under review. An environmental industry application research complex in the Honam region was completed in 2013 at a cost of KRW 29 billion for the project. It houses a pilot test facility, an ecological environment test facility and a production test laboratory, and serves as a hub of environmental technology and industry.
- Commercialization Support for Small Environmental Businesses
Small and medium-sized enterprises (SMEs) with environment-related business often experience hardships in commercialization even after they succeed in developing excellent environmental technology due to a lack of commercialization strategies and difficulties in securing investment funds. To resolve these problems, the Ministry is offering various kinds of support for SMEs, including management consulting, commercialization fund support and investment fund attraction support, according to the commercialization stages consisting of a commercialization groundwork stage, commercialization development facilitation stage and commercialization investment attraction stage.
The SMEs with environment-related businesses that received support for commercialization groundwork in 2013 showed positive results, as they reported an average sales growth of 1.9%, number of contracts won at 455 cases worth KRW 25.9 billion, increase in the number of new employees by 33 and increase in the number of new clients by 51, while SMEs with commercialization development facilitation support reported an average revenue growth of 11.8% and increase in the number of new employees by 26. Through the commercialization investment attraction support, companies succeeded in attracting a total of KRW 9 billion. The government plans to expand the financial scale of the commercialization support programs.
- Designation and Support for Outstanding Environmental Companies
The Ministry offers support in the areas of finance, export, manpower and marketing by designating promising domestic environmental companies with outstanding performances and technology and strong growth potential as “Outstanding Environmental Companies.” Designated companies are provided with various kinds of support, including the promotion of their brand via detailed analysis of their business, creating an overseas buyer’s network, strengthening export competitiveness and recruiting specialized human resources, etc.
Nine environmental companies were designated as Outstanding Environmental Companies for the first time in 2009, and 15 companies were additionally designated as such businesses in 2013 and 2014, respectively. The government plans to designate and foster 100 outstanding environmental businesses by 2017.
- Environmental Industry Policy Fund
To facilitate management support and investment in the environmental equipment of environmental companies and to systematically foster the environmental industry, the Ministry has been operating the Environmental Industry Fostering Fund, Recycling Industry Fostering Fund and Environment Improvement Fund with long-term, low-interest rates.
The scale of these environmental industry policy funds has been consistently expanded each year, and the combined amount of the three funds stood at KRW 135 billion in 2013, including KRW 14 billion for the Environmental Industry Fostering Fund, KRW 73 billion for the Recycling Industry Fostering Fund and KRW 48 billion for the Environment Improvement Fund. However, the increased demand for such loans from businesses far exceeds the budget limits, resulting in the early depletion of the funds each year.
Against this background, the government expanded the scope of loan support to KRW 182.5 billion in 2014, and the Environmental Industry Fostering Fund, as well as the Environment Improvement Fund, are being operated by shifting to an interest subsidy program in which the government subsidizes the interest rate differences between banks and the government-set fixed rate by using private funds.
The exports of Korea’s environmental industry have increased markedly, from KRW 1.27 trillion in 2006 to KRW 7.3 trillion in 2012. To promote the overseas expansion of the domestic environmental industry, the government offers diverse support policy programs.
- Developing new environmental projects and expanding overseas application research project
A project to support developing countries in establishing master plans for environmental improvement has been implemented to help them establish a comprehensive environmental improvement scheme and build a cooperative network at the government level to establish friendly conditions for Korean environmental companies to move into overseas markets. Starting with Vietnam in 2007, the project was conducted in a total of 16 countries in Asia, Africa and Latin America, etc. as of 2013.
The support of feasibility studies for overseas environmental projects is promoting the development of new projects, by supporting the cost of feasibility studies, which are necessary in the initial stage of international environmental projects. This project, which started in 2008, assisted a total of 116 environmental projects from 46 countries by the end of 2013, leading to obtaining overseas contracts worth KRW 102 billion.
To reduce the business risks associated with the various environmental regulations and systems of each country, it is necessary to promote joint projects with target countries. The Joint International Environmental Technology Localization Program was designed to promote joint research with target countries’ research institutes to apply the superior environmental technologies developed in Korea to the overseas countries in consideration of their conditions and regulations and support local application researches for the projects. Through this project, environmental technologies worth KRW 218.5 billion were exported from 2006 to 2012. In 2013, Korea succeeded in winning contracts amounting to KRW 69.4 billion by applying for 28 relevant overseas projects.
Furthermore, Korea is seeking to expand exchanges between itself and African countries, create new markets and help Korean environmental companies make inroads into the African market by establishing the Aid Program for Piped Water Supply Installation in African Villages, which is intended to install drinking water facilities for African people suffering from water shortages. This project started with Ghana in 2011 and is now spreading the environmental technology of Korea by offering easy access to 100 to 150 tons of clean and safe drinking water per day to people in Nigeria and Kenya.
- Strengthening Competitiveness through Public-Private Partnership
Since environmental projects are often implemented under the government’s lead, it is important to establish a network with the target governments. The Korean government has been dispatching public and private joint market development groups to resolve difficulties for the entrance of private entities into the international market and to provide political support through consultations with the government officials of target countries for major international environmental projects. In 2013, the government dispatched these groups to five regions: North Africa, Asia, Latin America, the Middle East and Middle and Eastern Europe.
Moreover, the government is making efforts to support domestic environmental companies in building an overseas network by selecting promising foreign countries for environmental exports and inviting key figures and major buyers of the countries to offer Business-to-Business consulting. Since 2010, the Global Green Hub Korea Program has been implemented by inviting the key figures of regions with promising export markets such as China, Southeast Asia, the Middle East, Latin America and North Africa to offer various environmental industry-related programs such as environmental cooperation forums, project consulting and briefing sessions and field trips to excellent domestic environmental facilities. A Global Green Hub Korea event held in the Songdo District of Incheon, Korea, in May 2014 was participated in by 107 key figures from 36 countries around the world and 229 domestic companies. Through the event, numerous projects worth KRW 38 trillion were created, and consulting and advisory services for 587 cases of such projects equivalent to about KRW 2 trillion were provided.
- Establishing Strategies for Overseas Expansion
Since 2001, the government has established international environmental industry cooperation centers in main target countries, including China, Vietnam and Indonesia, to utilize as a foothold for cooperation with foreign countries. These centers offer business lounges free of charge, create cooperative projects with relevant local organizations and hold various forums and consulting sessions to provide domestic companies with information about local projects.
The government also publishes the “Guide for Advancing into Promising Environmental Markets,” which provides a detailed analysis of the environmental markets and market trends of target countries by selecting countries with promising environmental markets by continent, and offers insights for entering the environmental markets of the target countries. From 2009 to 2013, such guide books have been published based on research and surveys of 14 countries.
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Last modified : 2017-12-12 08:38
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