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[세종=이데일리 한광범 기자] Since Corona 19, advanced defense companies have continued to target Korea’s major defense exporting countries, and there was an opinion that a government-wide integrated export strategy was needed.
On the 7th, the Korea Institute of Industry (KIET) announced the potential of the defense industry market in Asia, such as India and Philippines, and Australia, Poland, Colombia, etc., over the next five years (2020-2024) through the report ‘2020 KIET Top 10 Promising Countries for Defense Exports’. He highly praised this and emphasized the desperate need for strategic support at the government level.
According to the report, the government enacted the Defense Industry Development and Support Act last year to systematically foster and support the defense industry, and then newly established the office of defense officer in the Office of the Defense Reform Secretary at the Blue House to strengthen policy control functions.
In addition, it systematized the system to enable institutional support for industrial cooperation and export financing between countries by strengthening the function of the Defense Products Trade Support Center (KODITS), and set a goal of achieving $10 billion in orders as a concrete action plan for promoting exports.
However, the proportion of exports to the domestic defense industry’s output is still only 15%, and defense export orders, which recorded more than $3.5 billion in 2013-15 years, have remained stagnant at the level of $3 billion in the last five years (2016-20). .
In recent years, it seems that the defense companies are having more difficulty in expanding exports as the activities of receiving export orders by defense companies have been restricted due to Corona 19. Moreover, competition with global defense companies is expected to intensify further due to the decrease in defense budgets of countries around the world due to Corona 19.
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In particular, in the case of middle and late-coming countries, which are major defense export markets in Korea, it is expected to increase the share of the government budget allocation centering on welfare and revitalization of the domestic economy to respond to Corona 19. It is expected that competition in the defense export supply market will intensify due to the reduction in the defense budget and the decrease in the arms acquisition budget.
The report predicted that major global advanced defense companies are highly likely to focus on targeting the middle and late-developed markets, which are Korea’s main markets, to respond to their reduced defense budget and maintain and expand sales.
At the same time, it analyzed that Korean defense companies need a strategy of’selection and concentration’ based on clear target market selection in order to gain an edge in the competition with major global advanced defense companies that have comprehensive competitiveness in price, performance, and government support.
In addition, he emphasized that in addition to price competitiveness, the requirements of these countries, such as industrial cooperation and financial support, must be satisfied more than advanced countries.
The report cited Australia, Poland, and Colombia as promising countries for defense export over the next five years, and emphasized that “the characteristics of each country are very prominent, and it is necessary to establish a differentiated export strategy for each country.”
At the same time, he suggested that it is necessary to find an integrated export strategy through the uniting of capabilities at the level of the government in order to actively respond to the market attack of advanced defense companies in the United States and Europe.
Through this, he urged that the defense export negotiation method should shift the paradigm from the BtoG form in which existing companies deal with other countries to GtoG-centered through big deal between governments.