This study aims to analyze national-level defense acquisition and export trends in major defense-exporting and importing countries and to examine the current status of South Korea’s defense exports, with the objective of proposing policy directions ...
This study aims to analyze national-level defense acquisition and export trends in major defense-exporting and importing countries and to examine the current status of South Korea’s defense exports, with the objective of proposing policy directions for defense export support that enable coexistence and mutual growth between large enterprises and small and medium-sized enterprises (SMEs). Although South Korea’s defense exports reached a record high in 2022, they have since shown a downward trend. Various factors have been identified as contributing to this decline, including structural limitations in Korea’s export model, institutional and policy constraints, and changes in the international security environment.
First, this study conducts a comparative analysis of dedicated defense export and import agencies, legal and institutional frameworks governing defense trade, government support policies, and recent defense export and import trends in major defense-exporting and importing countries. Through this analysis, common characteristics shared by exporting and importing countries, as well as the recent distinctive features of exporters and importers, are identified.
Next, the study analyzes South Korea’s defense export–related laws, institutional arrangements, and export trends to derive the competitiveness, limitations, risk factors, and opportunities of the Korean defense industry. Based on these findings, expert consultations in the defense sector are conducted to propose policy directions and concrete implementation strategies for promoting coexistence between large enterprises and SMEs.
The results indicate that the core directions of defense export support policy include strengthening the competitiveness of weapon systems developed by large enterprises, facilitating SMEs’ entry into global supply chains, and achieving a balance between government-led and private-sector-led approaches in defense research and development. To implement these directions, this study proposes strategies such as establishing a defense export control tower, expanding domestic requirements for weapon system development, supporting participation in global value chains (GVCs) through government-led offset programs, promoting government-led international joint technology development and export-linked requirement identification, introducing a Korean Mentor–Protégé Program (K-MPP), strengthening inter-ministerial export and industrial cooperation support, and adopting country-specific differentiated strategies.
This study goes beyond conventional SME-centered discussions of defense export support by expanding the conceptual scope of export support to include elements—such as domestic weapon system development requirements—that have not been clearly defined as export support in previous studies. This perspective suggests that achieving sustainable defense exports requires the systematic and long-term strengthening of factors that are difficult to quantify through short-term export performance indicators. Accordingly, the focus of government support strategies is shifted from SME-only assistance to a coexistence-oriented framework involving both large enterprises and SMEs, while also reassessing the policy utilization of large enterprises that had been relatively excluded from previous government support policies.
Furthermore, this study incorporates extensive input from multiple government ministries and agencies, defense companies, and relevant experts, and proposes a new policy alternative—the Korean-style Mentor–Protégé Program (K-MPP)—which has not been presented in prior studies. This program is expected to serve as a meaningful policy instrument for building a sustainable foundation for cooperation between large enterprises and SMEs within Korea’s defense industrial ecosystem.