The government on Thursday announced a set of measures aimed at bolstering corporate investment in order to create jobs and support an economic recovery. The announcement came at a meeting with officials from the government and private sector chaired by President Lee Myung-bak. As part of the measures, the government plans to expand tax breaks for corporate investment into research and development and create a W10 trillion (US$1=W1,270) facilities investment fund.

These investment-boosting measures come at a time when jobs are sorely needed, but it remains uncertain whether they will be enough to spur corporate investment or lead to a venture business boom.

Meanwhile, the country's top 30 business conglomerates announced on Thursday that they plan to reduce facilities investment this year to W72.7 trillion, down10.7 percent from 2008, and cut new hires by 29.4 percent to 59,286 people. The reduced targets may be blamed on a lack of confidence in the speed of economic recovery, but the measures show businesses are desperately in need of bolder incentives for investment.

In the process of overcoming the global economic crisis, the policy chosen by many countries around the world is a sharing of investment risks by the government and private businesses. The U.S. government not only made efforts to help GM and other ailing companies but also provided US$5.9 billion to Ford so it could unveil a new electric vehicle next year. Ford's financial situation is stable, but the U.S. government has shouldered a considerable amount of potential losses from the development of new technology so that the American carmaker can gain a leading position in the market.

There is a precedent in Korea of this kind of risk sharing between the government and private sector: It happened during the development of code division multiple access (CDMA) mobile phone technology. The government should not simply tell businesses to go and invest after giving them some petty cash, but should undertake bold policies in which it shoulders the risks of potential losses involving major industries and core technologies.

The government's dual attitude toward promoting corporate investment is also a problem. For example, the Chinese government has been spearheading a project to construct a manufacturing center in Muan, South Jeolla Province. So far 300 Chinese businesses have voiced their intent to set up production bases there. But the Korean side has not even chosen a business partner and is causing the entire project to be delayed. If an American company had been the one to voice its intention to invest, several government ministers would probably have journeyed to the U.S. by now. In contrast, Taiwan on Wednesday began allowing its companies to invest directly into 100 business sectors in China. The stronger the reservations regarding the nationalities of investors, the smaller the chances for creating new jobs.