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Commentary: South Korea’s subsequent export growth will not be chips or Okay-pop

South Korea is making a splash in relation to the arms commerce.

On July 27th, South Korea signed considered one of its greatest export contracts ever. It wasn’t for semiconductors, or ships, or Korean dramas. As a substitute, it centered on a little-known, but quickly increasing, sector of the South Korean economic system: arms.

At a army base in Morag, Poland inked an settlement to purchase 1,000 tanks, 600 howitzers, and almost 50 fighter jets from Seoul, made by corporations like Hyundai Rotem and Hanwha Protection. Polish Protection Minister Mariusz Blaszczak was clear about why his nation made the acquisition: Poland wanted state-of-the-art protection capabilities, to be delivered as quickly as potential. South Korea was the one nation that might fulfill each situations.

Across the similar time, South Korea attended its first NATO Summit in Madrid, together with different Asia-Pacific leaders. However whereas Russia and China had been the primary focus of consideration, the dialog concerning Korea had one other essential element: superior know-how.

President Yoon Suk-yeol held over a dozen bilateral conferences throughout the Madrid NATO Summit. At these conferences, he touted South Korea’s superior weapons methods, nuclear energy vegetation, and burgeoning area trade as potential export progress areas for the South Korean economic system.

Excessive-tech ‘gross sales diplomacy’

Whereas the remainder of the world continues to obsess concerning the Korean Wave or the newest smartphone or flat display screen TV from Samsung or LG, the South Korean authorities is quietly working in tandem with main tech corporations to seek out the nation’s subsequent progress engine.

That is South Korea’s tried-and-tested technique to stay globally aggressive. Authorities funding in blue-sky analysis, shut cooperation with the non-public sector to investigate and decide on future progress engines, and the event of those applied sciences in a method that advantages each non-public revenues and the coffers of the South Korean authorities.

This relationship takes us again to the NATO Summit. South Korean producers equivalent to Hanwha have turn out to be one of many few worldwide weapon methods corporations to achieve a foothold within the NATO market. In reality, South Korea is the one Asian nation exporting to alliance members, together with Norway, Poland and the U.Okay. That’s a formidable feat for a rustic that, till the 2010s, was barely a participant on this market. Korea is already the world’s eighth-largest arms exporter, in response to the Stockholm Worldwide Peace Analysis Institute.

South Korea has benefited from the necessity to develop applied sciences for home use. In April 2021, then-president Moon Jae-in beamed as he delivered a speech in entrance of South Korea’s first-ever home-grown fighter jet, the KF-21 Boramae. International locations equivalent to Thailand, the Philippines, Iraq, or Qatar have already proven curiosity within the jet, manufactured by a consortium involving the South Korean authorities, Korea Aerospace Industries, and the Indonesian authorities. What began as a venture to discourage North Korea and China is poised to carry enormous financial advantages to South Korea.

The identical applies to the area sector. Final June, President Yoon attended the primary profitable launch of a South Korean rocket to place a satellite tv for pc into orbit. Developed by the federal government’s Korea Aerospace Analysis Institute, the Nuri rocket was additionally designed for home functions, maybe placing a surveillance satellite tv for pc into orbit to verify on Pyongyang and Beijing. However overseas patrons would definitely have an interest as properly.

Nuclear energy vegetation are additionally attracting abroad curiosity with majority state agency KEPCO becoming a member of consortiums in Egypt or the UAE to develop the sector in these nations—which South Korea itself wants to spice up to cut back dependency on oil and gasoline from the Center East and Russia, and pursue vitality autonomy.

So is inexperienced transport, with heavyweights Hyundai, Samsung, or Daewoo racing to prepared the ground on the world stage but additionally as South Korea seeks to restrict its personal carbon emissions.

South Korea is banking on two benefits as a part of its high-tech gross sales pitch. The primary, unstated benefit is that South Korea isn’t China. As relations between the U.S. and China sink to ranges not seen for many years, Seoul may turn out to be a trusted associate for nations and corporations in search of to construct provide chains with restricted or no Chinese language involvement.

South Korea’s high-tech merchandise are additionally cheaper than its opponents within the U.S. and elsewhere. Actually, merchandise from Lockheed Martin and Boeing are extra superior in comparison with their South Korea friends. However most nations don’t want the newest devices. They simply want one thing superior sufficient that permits them to guard themselves. That’s what South Korea gives.

South Korea Inc. now competes on the technological frontier, not simply in client know-how, however strategic applied sciences as properly. The U.S., Japan, and Europe higher get used to this new competitors.

Ramon Pacheco Pardo is a Professor of Worldwide Relations at King’s Faculty London and the KF-VUB Korea Chair on the Brussels College of Governance. He’s the writer of Shrimp to Whale: South Korea from the Forgotten Warfare to Okay-Pop.

The opinions expressed in Fortune.com commentary items are solely the views of their authors and don’t replicate the opinions and beliefs of Fortune.

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