[Defense Contribution] Time to Establish Governance for the Defense Industry

This year, various initiatives are being pursued to establish a government-wide defense export support system included in the new administration's 110 national tasks (launch of the Intergovernmental Defense Industry Development Council), promote smart defense export packages such as finished products, joint development, and technology transfer tailored to purchasing countries, and create a Defense Innovation Fund and Defense Innovation Cluster to achieve these goals, aiming to foster new growth engines in the defense industry.

As already reported, South Korea's defense industry exports exceeded $4.6 billion (approximately 5 trillion KRW) in 2021, ranking ninth globally among defense exporters. This achievement reflects the fruitful support efforts by the government, centered on the Defense Acquisition Program Administration (DAPA), and the main players in the defense industry, including system integrators and partner companies, aiming to become one of the world's top five defense exporters. In terms of weapon systems, exports of the K-9 self-propelled howitzer and Cheongung missile to Australia and the United Arab Emirates (UAE), as well as patrol vessels and combat systems to the Philippines, have been made. Additional export news regarding light attack aircraft and Black Panther tanks to Poland is also anticipated this year.

Although the global supply chain for energy, natural resources, and agricultural products is facing crises due to the recent Ukraine war, the defense industry sector is experiencing an environment where defense exports to countries facing increased security threats can grow. Furthermore, as a strategy to establish the defense industry as a future growth engine, efforts are underway to secure AI technologies to enhance unmanned combat capabilities, expected to be central in future warfare, by integrating rapidly advancing science and technology with weapon system operations. Collaborative efforts between system integrators and partner companies to foster mutual growth are also being promoted.

To fully achieve the planned establishment of this defense industry ecosystem within the designated period, discussions on governance, a current hot topic, must be prioritized. The Presidential Commission on Defense Innovation 4.0, a public-private joint committee expected to be realized within this year, is anticipated to take on this role.

The core of defense industry governance lies in how effectively the collective intelligence of experts who can create environmental preservation and social value is utilized. In an environment emphasizing ESG (Environment, Social, Governance), to overcome the reluctance to support the manufacturing of lethal weapons, which fall under so-called vice industries such as alcohol, tobacco, and drugs, efforts to reduce carbon emissions by system integrators must be pursued together with companies in the supply chain. Principles regarding labor, human rights, and diversity for defense industry workers must also be continuously considered.

Above all, the stable operation of DAPA, the vanguard of the defense industry positioned at the top of the value chain, must be prioritized to achieve these goals. A clear roadmap for relocating DAPA to Daejeon, one of the new administration's pledges, should be presented to help the psychological stability of its approximately 1,500 employees. The designation of a defense cluster, which will be the center of defense innovation execution, and the strategic expansion of the Defense Industry Education Institute, essential for nurturing core personnel across the defense industry, must be promptly realized.

As heads of government organizations who will work together for the successful governance of the new administration are being appointed one by one, it is desirable that the status stability of the DAPA Administrator is decided as soon as possible. The DAPA Administrator, who will play a key role in building the defense ecosystem, must possess a thorough understanding of existing projects, the capability to integrate scientific technologies such as space and AI that will become pillars of future power, and the ability to continuously sustain defense export capabilities. Defense acquisition is a challenging field that must achieve national defense security as its foundation, create jobs through exports, maximize existing forces, and build future forces. Considering the innovation of the defense industry, it is hoped that institutional support will be provided so that a leader who can guide the defense industry from a manager to a pioneer can be guaranteed a stable term and evaluated based on performance.

Professor Youngcheon Jeong, Hanyang University

This content was produced with the assistance of AI translation services.