South Korea’s North Jeolla provincial government has launched a smart project aimed at facilitating manufacturing innovation and digital transformation among local enterprises.

The provincial government recently signed a memorandum of understanding (MoU) for the project with 14 cities and counties, Samsung Electronics Co., Jeonbuk-Samsung Smart CEO Forum, and Jeonbuk Technopark.

The MoU marks the first time among local governments that local governments and private companies have joined forces to expand the public-private partnership for smart factory implementation.

The project is designed to strengthen the competitiveness of SMEs with central and local governments and Samsung Electronics supporting the construction of smart factories for small and mid-sized enterprises.

Traditionally, such smart factory projects were carried out through national-scale competitions, but the project in North Jeolla Province has expanded the support targets by organizing a separate budget for companies in the province.

With a vision to establish 300 smart factories by 2027, North Jeolla provincial government expanded its budget significantly in March for public-private cooperation business projects from 58 million won ($44,000) last year to 796 million won this year.

Additionally, the corporate burden for participating companies was reduced from 35 percent to 20 percent. The annual targeted projects expanded from 15 to 30.

Plans are underway to independently establish 70 smart factories annually from next year, separate from government projects.

Under the MoU, North Jeolla Province and the 14 municipalities are providing administrative and financial support for the project and are engaged in the exploration of exemplary cases in different regions.

Samsung Electronics will extend its innovative technology and business expertise to support manufacturing innovation for SMEs. Once the province finalizes the recruitment of mentors, Samsung Electronics will transfer its smart factory construction expertise to these mentors.

The Jeonbuk-Samsung Smart CEO Forum, a private consortium aimed at expanding smart factories, shares expertise in project promotion and preparation for participating companies.

The active involvement in smart factory projects stems from the proven effectiveness of such initiatives.

According to the Korea Federation of SMEs’ survey of participating companies in the smart factory projects from 2018 to 2021, productivity increased by 44 percent, on-time delivery rates improved by 14 percent, and defect rates fell by 53 percent among the companies involved in the projects nationwide.

By Choi Seung-jin and Minu Kim

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