South Korea - Defense and Security: Modernization to drive expenditure (Strategy, Performance and Risk Analysis)
South Korea was ranked 23rd globally in terms of the economic impact of violence and due to relatively high military expenditure, ranked 10th globally on this parameter. The country is modernizing its armed forces as a means to effectively combat external security threats from the North. To prevent possible terror attacks, the military and law enforcement agencies are working closely with the US Forces Korea (USFK), a US military base in South Korea.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
South Korean revenue and capital expenditure to grow:
South Korean revenue expenditure stood at US$22.9 billion in 2016, and will post a forecast-period CAGR of 4.5% to reach US$28.2 billion in 2021. An increasing focus on joint military exercises, troop training, institutional education, construction, and maintenance will support such growth. Capital expenditure stood at US$10.4 billion in 2016, and will post a forecast-period CAGR of 6.2% to reach US$12.9 billion in 2021 due to an increase in arms procurements. The South Korean Ministry of National Defense (MND) plans to purchase multipurpose commercial satellites and high-altitude spy drones. The country’s defense budget stood at US$33.3 billion in 2016, and will post a forecast-period CAGR of 5.0to reach US$41.2 billion in 2021.
Homeland security segment drove capital expenditure:
South Korea’s homeland security capital expenditure stood at US$1.2 billion in 2016, and will post a forecast-period CAGR of 4.5% to reach US$1.5 billion in 2021. Maritime, border and critical infrastructure protection are the main contributors; maritime and border security will reach US$471.0 million by 2021.
Strong military ties:
South Korea has strong military ties with the US; their relationship being a decisive factor in procurement strategies - being South Korea’s largest arms supplier, the US accounted for 59.5% of the country’s total arms imports during 2012-2016. Other significant arms suppliers include Germany, Israel, the UK, and Sweden. The country has also developed supplier relations with France and the Netherlands as it continues to diversify its defense procurements.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook