Gumi Rising with Defense Industry, Expanding Globally

Final Report Meeting on Research for Establishing Gumi City's Defense Industry Promotion Plan Held on the 15th

Gumi, the Leader of K-Defense Industry, Supports Defense Companies and Attracts Investment... Creating a Defense Industry Ecosystem

The 50-year history of K-Defense Industry began with the establishment of Geumseong Precision Industry (the predecessor of LIG Nex1) in 1976 to lay the foundation for self-reliant national defense.

Last April, Gumi City marked a new turning point in the defense industry by being selected for the Defense Innovation Cluster project.

Gumi City Defense Industry Development Council.

By designating the Opportunity Development Special Zone to activate the attraction of defense companies and continuously attracting research institutions for sustainable growth, the city is preparing a new 50-year history of the defense industry based on the five-year defense industry development plan.

◆ Industry, academia, research, military, and government experts gather to leap forward as the capital of K-New Defense Industry

On the 15th, the city held the ‘Final Report Meeting on the Establishment of Gumi City Defense Industry Development Plan Research Service’ at the city hall auditorium, attended by over 40 experts from industry, academia, research, military, and government in the defense sector.

Through the research service, the following defense industry development tasks for Gumi City were derived: ▲ Attracting defense anchor institutions such as a defense semiconductor manufacturing R&D institute and defense parts research institute ▲ Hosting defense new industry forums such as space/missile forums and defense parts and equipment exhibitions ▲ Establishing Gumi-type defense win-win cooperation support projects ▲ Strengthening defense export network support including inviting military attach? groups in Korea ▲ Establishing Gumi-type rapid acquisition support projects ▲ Strengthening the K-Defense New Industry control tower and establishing a dedicated organization ▲ Training Gumi-type defense industry specialists.

The city plans to utilize these to build an environment for fostering the local defense industry and prepare short-, medium-, and long-term support measures for local defense companies.

◆ Creating a defense industry ecosystem through the Defense Innovation Cluster project

Selected as the third nationwide, the Defense Innovation Cluster project aims to revitalize the local defense industry by establishing a systematic manned-unmanned complex system infrastructure with a budget of 49.9 billion KRW over five years starting in 2023. In June of the same year, the project team office was opened, and through a business agreement among the Defense Acquisition Program Administration, Gyeongbuk Province, and Gumi City, and two regional councils, the selection of executing institutions for detailed projects was completed, putting the project on track this year.

By establishing the Advanced Defense Industry Promotion Center (equipped with environmental, reliability, and EMC equipment) and building an unmanned surface vehicle testbed on the Nakdong River, the city plans to resolve difficulties faced by local companies such as excessive time required for testing and demonstration requests from other regions, high equipment costs, and risks associated with initial maritime tests, enabling timely parts supply and performance outcomes.

The city will also expand the base of the defense industry ecosystem through commercialization promotion and talent development utilizing Gumi’s excellent manufacturing infrastructure and defense technology. This includes full-cycle startup support from discovering entrepreneurs to education, consulting, and network formation; technology transfer and commercialization support for private companies with existing excellent technologies entering the defense industry; support for developing small systems and parts usable jointly by military and civilian sectors; matching companies with university professors by major; and establishing a defense-specialized development research institute linking defense technology R&D and workforce training to employment and entrepreneurship.

◆ Promoting regional economic revitalization through corporate investment attraction

Since the 8th municipal administration, Gumi City has achieved investment attraction results totaling 4.3 trillion KRW. In particular, investment activation in the defense sector by Hanwha Systems, LIG Nex1, Samyang Comtech, etc., has led to plans for four metropolitan area partner companies to expand their factories, and LIG Nex1 is also accelerating additional investments.

Last October and December, the city held investment attraction briefings inviting 60 partner companies of LIG Nex1 and Hanwha Systems, and is preparing to designate an Opportunity Development Special Zone centered on defense and semiconductors for large-scale investment attraction.

If designated as an Opportunity Development Special Zone, the city can provide exceptional incentives such as tax, regulatory, financial, and residential condition benefits. Local governments can lead operations including surveying investment company demands, establishing special zone plans, creating decentralized special zones, and proposing regulatory relaxations, which is expected to promote corporate relocation to the region and large-scale investments. The city plans to secure investment promotion funds and new growth engine funds to support defense small and medium enterprises with interest subsidies up to 500 million KRW.

▲ Establishing and supporting the foundation to strengthen local companies’ capabilities

The city is also committed to attracting essential research institutions for the continuous development of the local defense industry, such as the Defense Industry Parts Research Institute and defense-related testing and evaluation institutions. Upon attracting research institutions, it is expected to create synergy effects with Gumi City’s manufacturing capabilities, which include about 3,400 companies including 180 defense SMEs.

Since 2014, the city has invested 2.8 billion KRW over 10 years in the Gumi Defense Venture Center’s technology support projects, which have supported local companies in defense project planning, technology, and management, resulting in sales of 971.8 billion KRW and the creation of 5,154 jobs. The city also runs production facility advancement projects to improve SME productivity and network support projects that subsidize participation fees, airfare, and interpretation costs for domestic and international defense exhibitions to enhance export competitiveness. These efforts are coordinated with the Defense Innovation Cluster project and other defense industry development plans to establish differentiated defense industry development strategies.

Mayor Kim Jang-ho said, “We will promote regional economic and SME growth through the defense industry and support the development of the defense sector. Through differentiated defense industry development and job creation, we will realize Gumi City as the capital of K-Defense expanding globally.”