Page 141 - 2018 Defense White Paper

and grow within the defense industry because of the price-based competition and high entry

barriers. To provide a new opportunity for the defense industry to advance, the Defense Industry
Promotion Conference was held and presided by the president of the Republic of Korea in
September 2018. The conference was attended by nearly 150 off icials including the ministers

and heads of relevant government agencies—the Ministry of Trade, Industry and Energy; the
MSIT; and the Financial Services Commission—as well as defense industry representatives and
experts. The government agencies made a joint presentation on the defense industry development

plans that call for a paradigm shift toward an enterprising, open, and export-oriented defense
industry. They also agreed to actively implement the plans. First, the technology and quality
criteria will be given more weight in weapons system R&D proposal evaluations to ensure that

companies with outstanding technologies are chosen. To encourage more small and medium
enterprises (SMEs) and ventures to join the defense industry, a defense ventures and innovative
technology support program 16) will be newly launched, with an expansion of tailored support,
which will provide SMEs and ventures with the growth ladder that would help them develop Chapter 4

into competitive defense companies.
To help accelerate the technological

innovation by SMEs and ventures, the
government plans to establish a virtuous
cycle, 17) in which each service of the
Armed Forces and system suppliers

create requirements for the localization of
weapons systems, and where SMEs and
Defense Industry Promotion Conference
ventures develop them. Meanwhile, the (September 2018)

MND will pursue the enactment of the
“Defense Industry Promotion Act” and establish the “Defense Industry Promotion Agency”
(provisional name) to correct the practice of unfair trade between large companies and SMEs,

16) It is a program for discovering and supporting developments of highly advanced technologies that the military
and system suppliers need. The program awards up to KRW 500 million to a project over a period of up to three
years.
17) Establishing comprehensive part management policies (MND) ª Finding requirements for localizations of
parts (Armed Forces and system suppliers) ª Executing part localization projects (DAPA) ª Developing and
supplying parts (Defense SMEs and ventures)

Section 4 Improving the Transparency of the Defense Acquisition Program and the Competitiveness of the Defense Industry 139