Commentary: South Korea’s next export boom isn’t chips or K-pop

South Korea makes a splash when it comes to arms trade.

On July 27thSouth Korea signed one of the biggest export contracts ever. It’s not for semiconductors, or ships, or Korean dramas. Instead, it focuses on a little-known, but rapidly expanding, sector of the South Korean economy: weapons.

At a military base in Morag, Poland signed an agreement to purchase 1,000 tanks, 600 howitzers, and nearly 50 fighter jets from Seoul, made by companies such as. Hyundai Rotem and Hanwha Defense. Polish Defense Minister Mariusz Blaszczak is clear why his country is buying: Poland needs the latest defense capabilities, to be delivered as soon as possible. South Korea is the only country that can fulfill both conditions.

At the same time, South Korea ATTENDANCE the first NATO Summit in Madrid, together with other Asia-Pacific leaders. But while Russia and China are the main focus of attention, the conversation about Korea has another important ingredient: advanced technology.

President Yoon Suk-yeol held more than a dozen bilateral meetings during the Madrid NATO Summit. In these meetings, he touted South Korea’s advanced weapons systems, nuclear power plants, and developing space industry as potential export growth areas for the South Korean economy.

High-tech ‘sales diplomacy’

While the rest of the world continues to think about the Korean Wave or the latest smartphone or flat screen TV from Samsung or LG, the South Korean government is quietly working with leading technology companies to find- the next engine of growth in the country.

This is South Korea’s tried-and-tested strategy to remain globally competitive. The government’s investment in blue sky research, close cooperation with the private sector in the analysis and settlement of future growth engines, and the development of these technologies in a way that benefits private income and the government treasury in South Korea.

This relationship brings us back to the NATO Summit. South Korean manufacturers such as Hanwha became one of the few international weapons systems companies to gain a foothold in the NATO market. In fact, South Korea is the only Asian country that exports to members of the alliance, including Norway, Poland and the UK. Korea belongs to the world eighth largest arms exporteraccording to the Stockholm International Peace Research Institute.

South Korea benefits from the need to develop technologies for domestic use. In April 2021, former president Moon Jae-in shines as he delivered a speech in front of South Korea’s first homegrown fighter jet, the KF-21 Boramae. Countries like Thailand, the Philippines, Iraq, or Qatar already have expressed interest of the jet, which was developed by a consortium involving the South Korean government, Korea Aerospace Industries, and the Indonesian government. What began as a project to contain North Korea and China is poised to bring major benefits to South Korea’s economy.

The same applies to the space sector. Last June, President Yoon attended the first one successful launch on a South Korean rocket to put a satellite into orbit. Developed by the government’s Korea Aerospace Research Institute, the Nuri rocket is also designed for domestic purposes, perhaps putting a surveillance satellite into orbit to monitor Pyongyang and Beijing. But foreign buyers are definitely interested too.

Nuclear power plants have also attracted interest abroad with the majority state company KEPCO joining consortiums in Egypt or the UAE to develop the sector in these countries-which needs to be improved itself in South Korea to reduce dependence on oil and gas from the Middle East and Russia, and maintain energy autonomy.

So is green shipping, with heavyweights Hyundai, Samsung, or Daewoo racing to lead the world level but also as South Korea seeks to limit its own carbon emissions.

South Korea is banking on both advantages as part of its high-tech sales pitch. The first, unspoken advantage is that South Korea is not China. As relations between the US and China fall to levels not seen in decades, Seoul will be a trusted partner for countries and companies seeking to establish supply chains with limited or no involvement in China.

South Korean high-tech products are also cheaper than their competitors in the US and elsewhere. Of course, the products from Lockheed Martin and Boeing more advanced compared to their peers in South Korea. But most countries don’t need the latest gadgets. They just need something advanced enough that allows them to protect themselves. That’s what South Korea has to offer.

South Korea Inc. now competing on the technological frontier, not just in consumer technology, but in strategic technologies as well. The US, Japan, and Europe had better get used to this new competition.

Ramon Pacheco Pardo is Professor of International Relations at King’s College London and the KF-VUB Korea Chair at the Brussels School of Governance. He is the author of Shrimp to Whale: South Korea from the Forgotten War to K-Pop.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not reflect the opinions and beliefs of luck.

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