Seoul city will invest 172.3 billion won ($126 million) over the next five years to support the design industry in the city with an aim to nurture "Korean versions" of overseas design and home furnishing giants Ikea and Muji.

The Seoul Metropolitan Government on Wednesday unveiled a five-year plan prioritizing a stable foundation for Seoul's design industry, strengthening the self-reliance of design companies and fostering connections between companies, as well as promoting Seoul’s design industry globally, according to the city government's Design Policy Bureau.

“The design industry spans both the manufacturing and service sectors and therefore adds a great amount of value, resulting in a great amount of economic impact compared to what’s invested,” said Choi In-kyu, director general of Seoul's Design Policy Bureau in the briefing at Seoul City Hall.

Under the plan, the city government will launch a "Seoul-style design school," where high-profile designers and professors from South Korea and around the world will offer design classes. While classes will operate through an online platform this year, offline lectures will begin to be offered at Seoul Design Incubating Center, near Hongik University Station in Mapo-gu, western Seoul and Dongdaemun Design Plaza in Jung-gu, central Seoul.

Choi also added during Wednesday’s briefing that the city government will also introduce a special insurance program for small design firms, 30 percent of the premium for which will be supported by Seoul city, that will cover 60 percent of manufacturing costs if they fail to develop a prototype.

“The insurance program will be launched in the first half of next year and will benefit up to 1,500 firms for five years,” Choi mentioned.

Choi also stated that the city government will support up to 20 startup companies that produce annual sales of more than 1 billion won to help such firms find appropriate supply and sales channels.

The Seoul Design Incubating Center as well as other exhibition spaces in Seongsu-dong, eastern Seoul, will be used across the capital to help design companies display and sell their products.

Up to 150 design companies that design products and services for what Seoul considers disadvantaged or vulnerable groups will also be selected by the city government to receive subsidies which can be used during the companies’ production and sales process.

Choi added that the Seoul city government will work to connect manufacturing and technology companies with design firms.

For the next five years, 45 startups will be matched with manufacturers while 290 small and medium-sized enterprises with high growth potential will be selected and matched with other design companies for a chance to work together. Each of the matched companies will then receive a subsidy ranging between 30 to 50 million won from the city government.

Through its five-year investment, the Seoul Metropolitan Government expects to generate up to 489 billion won in production costs and create up to 2,346 new jobs. It also anticipates creating design clusters around the city that will serve as “the foundation for nurturing Korean versions of Ikea and Muji.”

“Design competitiveness determines the overall competitiveness of a city and is important to consider for Seoul’s future growth,” said Kim. “Through active investment and support for designers and design companies in Seoul, the city government will lay a foundation for Seoul’s design industry to leap forward internationally and gain Seoul’s reputation as the city of design.”