The government will offer extended tax credits to private companies in efforts to increase research and development investment. The plan was unveiled during President Lee Myung-bak's meeting with business leaders at the Korea Chamber of Commerce and Industry on Thursday.

According to the plan, tax credit will rise from 3 percent to 20 percent if a private company makes an R&D investment in at least one of 17 new “growth engines” designated by the government.

The government also plans to set up a fund worth W20 trillion (US$1=W1,270) to promote investment in facilities. The government for its part has pledged to expand spending in R&D by 11 percent over the next five years.