South Korea's Defense Industry Breaks the Mold in Global Arms Trade
South Korea's rapid rise in the global defense market challenges the existing narrative.
Joint Commission Ceremony takes place at the Army headquarters in Daejeon, South Korea. Photo by Anadolu Images.
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outh Korea has rapidly ascended as a formidable player in the global arms trade, a development that has caught many security analysts off guard. The country’s defense exports surged from an annual average of 3 billion USD in 2012-2021 to an impressive 17.3 billion USD in 2022, a report by Center for Asian Studies & Security Studies Center has revealed.
Recent high-profile deals, such as the contract with Australia for 129 Redback infantry fighting vehicles valued at 2.4 billion USD, underscore South Korea’s newfound prominence in the international defense market.
Traditionally, the defense industry has been dominated by a handful of countries forming an oligopoly, with the United States, Russia, France, China, Germany, Italy, and the United Kingdom comprising over 80% of the global arms market. South Korea’s rapid ascent to the eighth position in recent years challenges this established order.
The defense industry, characterized by its complexity, high technological requirements, large-scale contracts, and political sensitivity, imposes significant barriers to entry. South Korea’s emergence provides an unexpected opportunity for a newcomer to break into this exclusive club.
South Korea’s strategic opportunity
Defense industrial enterprises play a critical role as strategic partners for governments, providing military capabilities across ground, naval, and aerospace domains. Unlike conventional industries, defense enterprises require national-level capacity and commitment due to their capital intensity, long research and development cycles, and the inherent link to national security.
Subsidies, protectionist policies, and exclusive procurement procedures distinguish the defense industry from liberal market-oriented sectors.
South Korea’s rapid rise in the global defense market challenges the existing narrative. Major contracts with Central and Eastern European countries, especially Poland, in 2022 and 2023 have positioned South Korea as a significant player, particularly in ground and aerospace domains.
The country leverages competitive technologies, mass-production capabilities, competitive pricing, quick delivery times, coordination with its key ally (the U.S.), and strong diplomatic support to make inroads into the European security theater.
Key features
Key features and background of South Korea’s unexpected surge in the global defense market are important to highlight. It scrutinizes the defense industry’s portfolio, capacity, development over the last five decades, and assesses strengths and weaknesses.
Additionally, the report outlines main security implications of South Korea’s ascendancy in the defense industry and provides a short-term prediction for its future trajectory.
South Korea’s emergence as a defense industrial powerhouse represents a notable shift in the global arms trade dynamics. The country’s ability to navigate the intricacies of the defense industry, coupled with its competitive advantages, opens new possibilities for diversification and competition in a traditionally exclusive market.
The report aims to unravel the factors contributing to South Korea’s success and shed light on its potential impact on the global security landscape.
Source: Center for Asian Studies & Security Studies Center
