US-Korea Strategic Collaboration in the Aerospace Industry

Mi Jung Kim () and Won-Joon Jang ()
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Mi Jung Kim: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr
Won-Joon Jang: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 18-5, Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: The administration of U.S. president Donald Trump has emphasized modern military capability as a top priority, and the U.S. Congress has passed a nearly $700 billion defense appropriations bill in form of the National Defense Authorization Act of FY2018. As a result, investment in the development of advanced weapons systems is expected to increase, especially in the aerospace sector, which includes unmanned aerial vehicles and long-range bombers, as the United States pursues its third offset strategy. If the trend continues, the U.S. defense budget is expected to grow gradually over the next five years. The U.S. is also pressuring its allies to boost defense spending for their own security. NATO members agreed in 2006 to commit 2% of their GDP to defense. The global aerospace and defense market expected to reach approximately $841 billion in 2023 due to soaring defense spending in the U.S. and other major countries, along with a surge in private passenger demand in the world’s emerging economies. And pressure to replace aging military aircraft with 6th-generation fighters is building amid rising global tensions. Last year, Korea established a committee on the 4th industrial revolution, chaired by President Moon Jae In. This committee is part of the Moon administration’s pledge to enhance the country’s overall competitiveness. It comprised of some 30 senior government policymakers and businesspeople, and aims to form a collaborative public-private sector partnership that can overhaul the industrial sector by combining various virtual and physical systems, developing cutting-edge technologies and eventually serving as a catalyst for economic development. Under such favorable circumstances, it is time to actively seek ways to strengthen cooperation and increase synergy in the military aircraft industry between the U.S. and Korea.

Keywords: defense sector; defense cooperation; defense technology; defense innovation; US-Korea alliance; US-Korea defense cooperation; aerospace market; defense market; weapons systems integration; military aircraft; military aircraft technology; Korea; US (search for similar items in EconPapers)
JEL-codes: L62 L64 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2018-04-30
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