Defense as a Key Industry for the Next 50 Years
Focusing on the Drone Industry Alongside Nuclear Power and Hydrogen
Plans to Establish a Specialized Drone Manufacturing Complex
Changwon Special City in South Gyeongsang Province is taking the lead in becoming a hub for the localization of drone (ultralight aerial vehicle) manufacturing in Korea.
Currently, drones manufactured in Korea are highly dependent on foreign core components such as flight control systems, batteries, and motors. The localization rate of these parts is known to be less than 10%. Most of the global drone market is dominated by Chinese companies, and over 90% of drones sold domestically are made in China.
Changwon Special City Mayor Hong Nampyo is attending the '2024 Korea Drone Expo' on May 9 and receiving explanations from officials.
The city has selected the drone industry, along with defense, nuclear power, and hydrogen, as a key growth engine for the next 50 years and is focusing its efforts accordingly. It has also worked hard to attract drone-related businesses. Changwon was selected for the government’s drone demonstration city project for two consecutive years, following last year’s selection. Recently, Mayor Hong Nam-pyo visited the National Assembly to request national funding for the creation of a specialized drone manufacturing complex, accelerating the realization of localization.
◆ Continued Expansion Expected for the Drone Industry
According to the government’s 2nd Basic Plan for Drone Industry Development announced last year, the global drone industry is projected to grow from about 32 trillion KRW in 2021 (8 trillion in manufacturing, 24 trillion in applications) to 146 trillion KRW in 2032 (37 trillion in manufacturing, 109 trillion in applications). The domestic market is also expected to grow from 840.6 billion KRW in 2021 (352 billion in manufacturing, 488.7 billion in applications) to 3.9 trillion KRW in 2032 (2.3 trillion in manufacturing, 1.6 trillion in applications).
However, although the usefulness of drones was proven during the Russia-Ukraine war, Korea’s drone industry is still in its infancy. Most domestic drone companies are small businesses that find it difficult to invest in technology, resulting in lower market share compared to Chinese companies with superior price and technological competitiveness. As of 2021, more than 10 Chinese companies ranked in the top 40 global drone manufacturers, while no Korean companies made the list.
Fortunately, as the range of drone applications continues to expand, discussions on fostering the domestic drone industry have become more active. Drones are now being used not only for military and hobby purposes but also for patrol, unmanned drone delivery, aerial pesticide spraying, urban air mobility (UAM), and wildfire monitoring, among other fields. This expansion is having a significant ripple effect on related industries.
Demonstration event of the drone verification city construction project held at the end of last year.
◆ Selected for Drone Demonstration City Project for Two Consecutive Years
The government annually selects “drone demonstration cities” where drone services and technologies are implemented in real-world scenarios. Selected local governments develop drone utilization models tailored to their regional characteristics, apply them to public services, and operate them to assess the potential of drones.
In particular, Changwon Special City was the only city in South Gyeongsang Province to be selected for the Ministry of Land, Infrastructure and Transport’s drone demonstration city project for two consecutive years in 2023 and 2024. The city secured 700 million KRW for the project last year and 500 million KRW this year.
This year, Changwon will carry out the project from March to November under the goal of “Higher and Wider with Drones: Building a Drone-Centric Everyday City.” Starting in August, three park delivery bases (Daewon Leisure Park, Bukmyeon Riverside Ecological Park, Mannal Neighborhood Park) and 10 drop-off points will be designated, with drone flight routes established to deliver convenience items such as beverages and snacks.
◆ Establishment of a Specialized Complex for Drone Manufacturing Localization
Changwon Special City is planning to establish a specialized drone manufacturing complex as a national project next year. To this end, Mayor Hong Nam-pyo visited the National Assembly on the 9th of last month to request the inclusion of a 1 billion KRW budget for the planning of the specialized complex. National Assembly member Choi Hyungdu and Aerospace Administration Director Yoon Youngbin were also present.
The proposed specialized drone manufacturing complex is a one-stop facility for drone manufacturing, including the construction of a smart drone testing and evaluation support center, the establishment of core component testing, inspection, and demonstration equipment, and support for technology development. The city plans to secure government support and planning budgets in the second half of this year and begin feasibility studies and basic planning early next year.
Once established, the specialized complex is expected to become the starting point for the localization of drone manufacturing. The city also expects to attract related companies and investments through the promotion of the drone manufacturing and component industries.
This project is a proactive proposal to the government, and if national funding is secured, Changwon is expected to have an advantage in future government project selections. Changwon is home to the Korea Institute of Materials Science and the Korea Electrotechnology Research Institute, which research key materials and electrical/electronic components for the drone industry, as well as companies that have been researching and producing machinery and aircraft parts for decades. The city believes its business potential is greater than anywhere else.
Mayor Hong Nam-pyo of Changwon Special City stated, “Currently, drone manufacturing relies mostly on foreign technology. Going forward, Changwon Special City will take the lead in the localization of drone manufacturing and contribute to the revitalization of the domestic drone industry.”
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