The government and the private sector will invest 24 trillion won (S$29.6 billion) by 2017 to restructure Korea's manufacturing industry and increase its competitiveness, officials said Thursday.
They also said the government will seek a "second Middle East boom" by strengthening economic relations with oil-rich nations in the region.
The ministries of industry and finance reported these and other plans in a meeting to promote trade and investment presided over by President Park Geun-hye at Cheong Wa Dae on Thursday.
Industry Ministry officials said the so-called "smart industrialization" will help the country achieve $1 trillion ( in annual exports by 2024, becoming the fourth-largest exporter of manufactured goods.
"The manufacturing sector's competitiveness, the pillar of our export-oriented industry, should be reinforced significantly to boost our growth potential in overseas markets," President Park said in the meeting.
"In particular, we should push for a 'smart industry revolution' in earnest while accelerating our manufacturing industry's innovative efforts," she added.
Ministry officials said the paradigm of the domestic industry will change if the plan to synergize information and communications technology with the manufacturing industry field is implemented as scheduled.
Under the plan, the production line of 10,000 manufacturing plants ― accounting for one-third of the manufacturing facilities with more than 20 workers ― will be digitized and adapted with Internet of Things technology.
This will start with 120 subcontractors for Samsung Electronics and LG Electronics, 100 subcontractors for Hyundai Motor, 50 combined for Doosan and Hyosung, as well as 25 for Cheil Industries this year.
The government will push legalization of tax benefits and other perks to companies seeking to restructure as ICT-friendly, which is expected to maximise production efficiency.
By 2017, the government and companies will invest 1 trillion won into research and development of "smart manufacturing technologies" including IoT.
Finance Ministry officials said one of the key topics discussed at the meeting was ways to attract the Middle East oil money through multiple channels ― including overseas construction and plant-related deals, the entrance of Korean SMEs in the region and the export of Korea's young intellectual manpower.
"It is a 'heavenly mandate' for business enterprises and the government to be united at heart to jump into the economic revival and bring forth another economic leap," Park said.
South Korea enjoyed a construction boom in the Middle East in the 1970s and 1980s, which helped the country rise from the ruins of the 1950-53 Korean War to an industrial power.
Ministry officials said an emphasis would be placed on increasing financial support for local builders so that they can engage in investment development projects, in which builders become investors.
The government said it will create a government fund of at least 150 billion won ($134.2 million) by the second half of this year to support Korean SMEs in the health care industry ― a promising future-oriented industry in which Korea has a competitive edge ― to expand into the Middle East. A legal support system for international medical enterprises will also be provided in the second half.
The state-backed development financing for the Middle East will also slightly increase, with the Export-Import Bank of Korea planning to increase the funding to 27.5 trillion won from 27.1 trillion won, and the Korea Trade Insurance Corp. to 10.7 trillion won from 7.8 trillion won.
The trade conference marks this year's first state-private joint discussion on economic revival, which addresses the potential trade gains with the Middle Eastern economies, in the wake of the presidential visit to four countries in the region ― Kuwait, Saudi Arabia, UAE and Qatar.
"Since all due measures have been taken in the domestic market, we have to approach the global market and attract investment through international trade and economic diplomacy," Park said.