Ministry of SMEs and Startups

Reshoring companies that are moving their production facilities back to Korea can get support of up to KRW 900 million (KRW 500 million for robots and KRW 400 million for upgrading into and of smart factories) to build or upgrade “smart factories”and use “cutting-edge manufacturing robots.”
 
The Korean Ministry of SMEs and Startups (MSS, Minister Park Young-sun) announced on July 15 that it will pursue the “Project to supply and spread smart factories (supplementary).” For this, it will accept applications until September 15 from reshoring companies that plan to move back their production facilities to Korea, wish to build “smart factories”, and use “cutting-edge manufacturing robots.”
 
The latest announcement is a measure taken following the securing of the “third supplementary budget for year 2020,” which has been compiled to turn the economic crisis in the post-COVID-19 era into an opportunity to innovate and switch the Korean economy into the digital.
 
The ministry plans to fully pursue the policy of “smart reshoring” by vitalizing the reshoring of Korean companies through their smart upgrading, starting with the current project.
 
In addition, it newly established a track exclusively for reshoring companies in the project to “support manufacturing innovation using robots” and dramatically raised the support funds to KRW 500 million (from the existing KRW 300 million). Furthermore, it expanded its support for companies upgrading and newly building smart factories (for middle 2 or Lv4 and over) to a maximum of KRW 400 million (from the existing KRW 150 million). The announced budget for the project is ^①KRW 2 billion to “support manufacturing innovation using robots” and KRW 8 billion for ^②“the upgrading into and of smart factories” adding up to a total of KRW 10 billion.
 
The ministry will connect its support for cutting-edge manufacturing robots and smart factories of reshoring companies, while putting priority on smart factories, so that they may build upgraded factories that can be remotely controlled.
 

 
* Reshoring companies that have applied for robots will be endowed with preferential additional points and they can simultaneously apply for one of the following three projects: newly building smart factories (KRW 150 million), Advancement of smart factories (KRW 200 million), and advancement of smart factories 2 (supplementary, KRW 400 million for building middle 2 (Lv4)).
 
In addition, the ministry plans to support for the best use of achievements made by the “Processing innovation R&D” project in order to accelerate the reshoring of Korean companies that have left Korea for lower labor cost abroad. The “Processing innovation R&D” project aims to support technological development for the switching of labor-intensive processing into the automated. The ministry expects to announce the project for this year in September. For this, experts from industries, the academe, and research centers plan to gather and discover the technologies that make it difficult to reshore in the three major industrial fields (automobile, electro-mechanics and electronics, and root industries, etc.) that have high technological, economic, and ripple effects.
 
The details of the currently announced “Project to supply and spread smart factories (supplementary)” are as follows.
 
1. Project to support manufacturing innovation using robots
 
The project “to support manufacturing innovation using robots” entails supporting SMEs and middle-grade companies in their use of robots working in collaboration, unmanned transferring robots, and automated robots. Only, companies that can get the project’s support are limited to those with “a certificate confirming their selection for reshoring back to Korea.”
 
In particular, the project has largely expanded its support funds (from KRW 300 million to KRW 500 million) with the latest announcement in view of the high investment it costs to newly and additionally build factories when moving production facilities from outside of Korea into Korea. The ministry will support within four companies during the second half of the year.
 
* Effects of introducing robots (based on a survey of 35 companies conducted in 2019 by the Korea Institute for Robot Industry Advancement): improved productivity by 79.2%, reduced defect rate by 74.4%, and cut in manufacturing cost by 54%
 
In addition, the ministry is allocating sufficient time of about 2 months and over* for the submission of “certificate confirming selection for reshoring back to Korea” so that companies planning to reshore but without the certificate yet may benefit from the project.
 
* Period for the submission of certificate confirming selection for reshoring back to Korea: from July 15 to September 15, 2020 (2 months); however, companies can submit it after this period until the evaluation and announcement are made for the selection of the companies, if and when necessary.
 
2. Advancement of smart factories 2
 
The project of “Advancement of smart factories 2” entails supporting SMEs and middle-grade companies to build cutting-edge smart factories that can be remotely controlled in real time based on artificial intelligence (AI) and data as non-face-to-face economic activities have become part of normal life in the post-COVID-19 world.
 
* Achievements made by building smart factories (based on a survey of 5,003 companies conducted in 2019 by the Korea Smart Manufacturing Office): improved productivity by 30.0%, reduced defect rate by 43.5%, cut in manufacturing cost by 15.9%, improved delivery date compliance rate by 15.5%, and reduced industrial accidents by18.3%
 
Companies that can apply for the project are SMEs and middle-grade companies that aim to build upgraded smart factories (middle 2 or Lv4 and over). In particular, the ministry has expanded the support funds for each company to a maximum of KRW 400 million (from the existing KRW 150 million) to alleviate the cost burden of having to invest in facilities, such as AI, 5G, and IoT, which are necessary for the upgrading into and of smart factories. The ministry will support within 20 companies during the second half of the year.
 
Reshoring companies that apply for the upgrading can get preferential additional points and simultaneously apply for support for automated robots.
 
For details of the projects, check their notification on the ministry’s Website (www.mss.go.kr) or that of the Smart Factory Project Management System (www.smart-factory.kr). Companies wishing to participate in the projects should apply through the system until September 15.
 
* Inquiries on the projects: Korea Smart Manufacturing Office (+82-42-388-0853, 0861) and Korea Institute for Robot Industry Advancement (+82-53-210-9652, 9653)