Jang Seob Yoon
Research expert covering South Korea
Defense industry in South Korea - statistics & facts
The landmark arms agreement with Poland in recent years has shined a light on the South Korea's defense manufacturing competencies on the international stage. Much like the country's rapid economic development, its defense industry has also displayed impressive growth. The nation's continuous investment in the industry is understandable, considering the context of its northern neighbor and the history involved. South Korea ranks among the leading countries with the highest military spending worldwide.
How has South Korea's defense industry developed?
In the aftermath of the Korean War, South Korea remained largely reliant on U.S. aid for munitions until a shift in its foreign policy left the East Asian nation facing the challenging prospect of developing a domestic defense industry from almost the ground up. For example, early research consisted of breaking down old rifles used by U.S. forces into their separate components, which were then measured to produce a rudimentary blueprint. Initially established as a special task force for defense research and development (R&D), the Agency for Defense Development is now a major research institution with over three thousand employees. The country continues to allocate trillions of South Korean won to improving defense capabilities as part of its national defense budget, which has only increased over time.Which South Korean companies are defense contractors?
As the industry is a matter closely related to national security, defense contractors are largely influenced by government decisions. Private companies that entered the industry were asked to do so by previous leadership or were designated as part of efforts to develop domestic small and medium-sized enterprises (SMEs). Based on their expertise, such contractors are active in various relevant sectors for the defense industry. Some companies are the result of forced mergers in response to the 1997 Asian financial crisis, such as Hyundai Rotem or Korea Aerospace Industries. These companies used to be separate defense divisions of major South Korean conglomerates. Hanwha Group decided to merge its defense-focused subsidiaries into a single entity amidst efforts to scale its defense business and compete among global leaders. With global military spending on the rise amidst widespread geopolitical uncertainty, it remains to be seen whether the South Korean defense industry can maintain its place in the spotlight.
