Commentary: South Korea's next export boom won't be chips or K-pop

5 days ago 3

South Korea is making a splash erstwhile it comes to the arms trade.

On July 27th, South Korea signed 1 of its biggest export contracts ever. It wasn’t for semiconductors, oregon ships, oregon Korean dramas. Instead, it focused connected a little-known, yet rapidly expanding, assemblage of the South Korean economy: arms.

At a subject basal successful Morag, Poland inked an statement to bargain 1,000 tanks, 600 howitzers, and astir 50 combatant jets from Seoul, made by companies similar Hyundai Rotem and Hanwha Defense. Polish Defense Minister Mariusz Blaszczak was wide astir wherefore his state made the purchase: Poland needed state-of-the-art defence capabilities, to beryllium delivered arsenic soon arsenic possible. South Korea was the lone state that could fulfill some conditions.

Around the aforesaid time, South Korea attended its archetypal NATO Summit successful Madrid, on with different Asia-Pacific leaders. But portion Russia and China were the main absorption of attention, the speech regarding Korea had different important component: precocious technology.

President Yoon Suk-yeol held implicit a twelve bilateral meetings during the Madrid NATO Summit. At these meetings, helium touted South Korea’s precocious weapons systems, atomic powerfulness plants, and burgeoning abstraction manufacture arsenic imaginable export maturation areas for the South Korean economy.

High-tech ‘sales diplomacy’

While the remainder of the satellite continues to obsess astir the Korean Wave oregon the latest smartphone oregon level surface TV from Samsung oregon LG, the South Korean authorities is softly moving successful tandem with starring tech firms to find the country’s adjacent maturation engine.

This is South Korea’s tried-and-tested strategy to stay globally competitive. Government concern successful blue-sky research, adjacent practice with the backstage assemblage to analyse and settee connected aboriginal maturation engines, and the improvement of these technologies successful a mode that benefits some backstage revenues and the coffers of the South Korean government.

This narration takes america backmost to the NATO Summit. South Korean manufacturers specified arsenic Hanwha person go 1 of the fewer planetary limb systems firms to summation a foothold successful the NATO market. In fact, South Korea is the lone Asian state exporting to confederation members, including Norway, Poland and the U.K. That’s an awesome feat for a state that, until the 2010s, was hardly a subordinate successful this market. Korea is already the world’s eighth-largest arms exporter, according to the Stockholm International Peace Research Institute.

South Korea has benefited from the request to make technologies for home use. In April 2021, then-president Moon Jae-in beamed arsenic helium delivered a code successful beforehand of South Korea’s first-ever home-grown combatant jet, the KF-21 Boramae. Countries specified arsenic Thailand, the Philippines, Iraq, oregon Qatar person already shown interest successful the jet, manufactured by a consortium involving the South Korean government, Korea Aerospace Industries, and the Indonesian government. What started arsenic a task to deter North Korea and China is poised to bring immense economical benefits to South Korea.

The aforesaid applies to the abstraction sector. Last June, President Yoon attended the archetypal successful launch of a South Korean rocket to enactment a outer into orbit. Developed by the government’s Korea Aerospace Research Institute, the Nuri rocket was besides designed for home purposes, possibly putting a surveillance outer into orbit to cheque connected Pyongyang and Beijing. But overseas buyers would surely beryllium funny arsenic well.

Nuclear powerfulness plants are besides attracting overseas involvement with bulk authorities steadfast KEPCO joining consortiums successful Egypt oregon the UAE to make the assemblage successful these countries—which South Korea itself needs to boost to trim dependency connected lipid and state from the Middle East and Russia, and prosecute vigor autonomy.

So is greenish shipping, with heavyweights Hyundai, Samsung, oregon Daewoo racing to pb the mode astatine the planetary level but besides arsenic South Korea seeks to bounds its ain c emissions.

South Korea is banking connected 2 advantages arsenic portion of its high-tech income pitch. The first, unspoken vantage is that South Korea is not China. As relations betwixt the U.S. and China descend to levels not seen for decades, Seoul could go a trusted partner for countries and companies seeking to physique proviso chains with constricted oregon nary Chinese involvement.

South Korea’s high-tech products are besides cheaper than its competitors successful the U.S. and elsewhere. Certainly, products from Lockheed Martin and Boeing are much precocious compared to their South Korea peers. But astir countries don’t request the latest gadgets. They conscionable request thing precocious capable that allows them to support themselves. That’s what South Korea offers.

South Korea Inc. present competes astatine the technological frontier, not conscionable successful user technology, but strategical technologies arsenic well. The U.S., Japan, and Europe amended get utilized to this caller competition.

Ramon Pacheco Pardo is simply a Professor of International Relations astatine King’s College London and the KF-VUB Korea Chair astatine the Brussels School of Governance. He is the writer of Shrimp to Whale: South Korea from the Forgotten War to K-Pop.

The opinions expressed successful Fortune.com commentary pieces are solely the views of their authors and bash not bespeak the opinions and beliefs of Fortune.

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