Gov't to double R&D spending on service sector by 2012

(ATTN: ADDS details in last 4 paras)
SEOUL, Jan. 14 (Yonhap) -- The government will more than double research and
development (R&D) investment in the nation's service sector over the next four
years in a bid to enhance its overall competitiveness, the finance ministry said
Wednesday.

The Ministry of Strategy and Finance said that it aims to double R&D investment
in the service sector by the end of 2012. Service-sector investment currently
accounts for about 1 percent of the nation's total spending in research
activities.
"Despite the service sector making up an increasing portion of gross domestic
product, the ratio of R&D investment in the sector has remained stagnant compared
with other competitive countries," the ministry said in a statement. "We will
streamline related laws and regulations to draw investment not just from the
government but from the private sector as well."
As of 2007, private-sector investment in the area stood at 7.2 percent of the
sector's total R&D spending, the ministry said. The figure is significantly lower
than the average 23.7 percent for member countries of the Organization for
Economic Cooperation & Development.
The move is part of sweeping measures announced by the ministry to enhance the
competitiveness of the local service sector. It is in addition to the two
previous policy packages for the sector unveiled in April and September of last
year.
Since the inauguration of President Lee Myung-bak in February last year, South
Korea has been striving to boost its service sector, which has been long
sidelined as manufacturers have driven the nation's economic growth in recent
decades.
The two previous "Service Progress" policy measures focused mostly on boosting
the tourism industry and easing regulations on the ownership structure of
broadcasting companies. The efforts are also in line with the government's drive
to create more jobs amid dwindling employment figures.
Under the third package of measures, more emphasis was placed on expanding R&D
investment and training workers to meet the needs of the service sector, the
ministry said.
"The mismatch problem between demand and supply is getting worse in the labor
market, making it tougher for companies to secure needed workers for their
business," the ministry said. "More education and training efforts are required
to produce 'tailored' workers for the private sector."
In a related move, the ministry said that it will make it easier for companies to
open a college for their own employees. Currently, the "in-company" colleges have
been allowed only for large companies with more than 200 employees. Regulations
will be eased to lower the requirement by the end of first half, according to the
ministry.
The private sector will also be given a more leeway to open departments in
universities so as to help train students which can effectively work for
companies after graduation, the ministry said.
kokobj@yna.co.kr
(END)