South Korea unveiled an ambitious $112 billion (KRW 150 trillion) National Growth Fund on September 10, marking the country’s largest strategic investment initiative aimed at revitalizing economic growth through high-tech industry development over the next five years.

The Financial Services Commission, alongside government ministries, industry leaders, and financial institutions, announced the comprehensive funding strategy during a public conference, positioning the initiative as a critical response to intensifying global competition in strategic technologies.

The fund addresses Korea’s mounting economic pressures, including demographic decline, aging population, and near-zero growth projections for this year. The initiative draws parallels to previous transformative investments that shaped Korea’s economic trajectory, from the Gyeongbu Expressway construction to the heavy industry pivot and telecommunications infrastructure development.

“Korea faces a critical juncture where traditional growth drivers are rapidly deteriorating,” officials noted, emphasizing the need for strategic megaprojects to maintain competitiveness in the global high-tech landscape.

The National Growth Fund will target key strategic industries including artificial intelligence, semiconductors, biotechnology, vaccines, robotics, hydrogen technology, secondary batteries, displays, future mobility, and defense technologies. The gaming and content industry will join the investment scope following legislative revisions.

The fund’s $112 billion (KRW 150 trillion) structure comprises $56 billion (KRW 75 trillion) from a government-led high-tech strategic industry fund and $56 billion (KRW 75 trillion) from private sector, individual, and financial company contributions. The Korea Development Bank will manage the strategic fund component, with $750 million (KRW 1 trillion) in fiscal input for 2026 taking subordinated positions to encourage private participation.

The fund will deploy capital through four primary mechanisms: direct equity investments in new ventures and production facilities, indirect equity investments through joint public-private funds, infrastructure development for AI data centers and industrial complexes, and low-interest lending at approximately 2% for large-scale facility investments and R&D projects.

Early-stage technology investment funds will support emerging businesses, while certain fund categories will allow individual investor participation to democratize growth profits.

A vice-ministerial consultation body among related ministries will ensure integrated support across regulatory, tax, fiscal, financial, and personnel policies for the government’s 30 priority projects under the new administration’s economic growth strategy.

The initiative represents a fundamental shift toward “productive finance,” moving beyond traditional collateral-based lending models to foster innovation in banking intermediation, investment banking growth, venture capital development, and KOSDAQ market expansion.

The high-tech strategic industry fund will launch in early December, three months after its September 9 promulgation. The government projects the initiative will generate up to $93.5 billion (KRW 125 trillion) in added economic value while creating substantial employment opportunities and strengthening regional economies.

The FSC and KDB will continue coordinating with relevant ministries to identify and support strategic megaprojects designed to enhance Korea’s global competitiveness in high-tech industries.