Government to Foster 100 Defense Startups by 2030

As weapons incorporating advanced technologies such as artificial intelligence (AI) have recently emerged as the core of the defense industry, the government has rolled up its sleeves to foster innovative defense startups. Its goal is to nurture 100 innovative defense startups and 30 defense venture companies with annual sales of 100 billion won by 2030. To this end, the government plans to strengthen support for data and infrastructure, which are cited as key entry barriers for startups seeking to enter the defense sector, and to focus on supporting research and development (R&D).

Han Seongsuk, Minister of SMEs and Startups, is speaking about win-win growth strategies for large corporations and small and medium-sized enterprises while attending the Economic Ministers' Meeting held at the Government Complex Seoul in Jongno-gu, Seoul on the 21st of last month. Photo by Jo Yongjun

원본보기 아이콘

On the 23rd, the Ministry of SMEs and Startups announced the "Defense Startup Fostering Plan," which is built around these measures, and stated that it has signed a memorandum of understanding (MOU) with six related organizations, including the Ministry of SMEs and Startups and the Defense Acquisition Program Administration. This plan was prepared in response to the growing need to foster innovative defense startups, as weapons incorporating innovative technologies have recently been reshaping modern warfare.

First, the Ministry of SMEs and Startups and other relevant ministries will hold a "Defense Startup Challenge" to promote the entry of startups into the defense sector. Participating companies will receive preferential treatment in the Win-Win Growth Evaluation, and products developed through the challenge will be connected to military demonstration tests so that feedback from the armed forces can be reflected.

In addition, through "Defense AX Bases," the government will provide military requirements and data to support AI transformation (AX) projects, and major projects will be linked to commercialization support. Through "K-Startup Startup Support Portal," the largest startup gateway in Korea, it will integrate and provide information on the use of defense infrastructure and defense technology planning documents, thereby strengthening support for security infrastructure, which is a major entry barrier in the defense industry.

The government will also establish "startup-centered universities" to promote entrepreneurship in the defense sector. Through collaboration between Youth Startup Academies and defense-specialized schools, it plans to provide linked education programs on defense and entrepreneurship.

The government will also focus on supporting R&D for defense startups. From the initial development stage, it will support technology verification, R&D, and mass production as a package through collaboration with the armed forces and system integrators. In addition, one Creative Economy Innovation Center will be designated as the "K-Defense Startup Hub" (tentative name) to serve as an offline base for defense and startup support.

The government will strengthen the "Next Unicorn Project Fund" to attract investment into defense startups, targeting unlisted startups with a corporate value of 1 trillion won or more, and will also operate the "GVC30 Project," which supports companies matched with the demand of global defense companies. It plans to newly designate clusters linked to regional specialized industries and the shipbuilding industry to expand "Defense Innovation Clusters" nationwide, and this year it will promote a cluster in the maintenance, repair, and overhaul (MRO) sector for naval vessels to strengthen cooperation in shipbuilding between Korea and the United States, as well as in advanced fields such as semiconductors and AI.

원본보기 아이콘

The government will also seek to establish a culture of win-win cooperation between large defense companies and small and medium-sized enterprises. It will conduct Win-Win Level Evaluations and surveys on subcontracting practices in the defense sector. In the case of the subcontracting survey, it plans this year to examine the defense-related performance of 15 defense system integrators, and will provide incentives related to cost calculation and offset trade for outstanding companies.

In addition, the government will improve defense acquisition-related systems so that SMEs and startups participating in the defense sector can take part in defense projects on an equal footing with large corporations, and will build an integrated database (DB) of domestically produced components and revise the system so that these components can be applied to weapon systems on a preferential basis.

Minister of SMEs and Startups Han Seongsuk said, "Now is a critical time to lay the foundation for the growth of defense unicorns that can lead military requirements and compete on the global stage," adding, "We will actively push for a leap toward a strong defense ecosystem in which new industries and startups can thrive, moving beyond a defense ecosystem centered on manufacturing and large corporations."

Defense Acquisition Program Administration Commissioner Lee Yongcheol said, "We will make active efforts to ensure that our K-Defense can achieve even greater results by adding the government's policy priming water to the innovative ideas of defense startups."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.