PwC: South Korea Ranks Third Globally in Aerospace Manufacturing Investment Attractiveness

Strengths Include Highly Skilled Workforce and Government Support Policies
"Capabilities of KAI, Hanwha, and Korean Air Recognized"

South Korea has ranked third in an assessment of investment attractiveness in the aerospace and defense manufacturing sectors among major countries. The nation's highly skilled workforce and the government's proactive policies to foster the defense industry were cited as key competitive advantages.

On April 23, Samil PwC announced the publication of its report, "2024 Aerospace Manufacturing Attractiveness Rankings by Major Countries." The global accounting and consulting group PwC releases these rankings every two years, analyzing and evaluating countries with promising prospects for aerospace industry development to provide information to investors and manufacturers in the defense sector. The comprehensive analysis is based on seven objective indicators: cost competitiveness, economic strength, geopolitical risk, infrastructure, labor, industrial competitiveness, and tax policy.

According to the report, South Korea ranked third this year, following the United States and Singapore. This marks a five-place rise from eighth in 2023. The report stated, "South Korea's highly skilled workforce and the government's active policies to foster the defense industry are the main factors." It also noted that leading domestic companies such as Korea Aerospace Industries (KAI), Hanwha Group, and Korean Air have been recognized for overcoming supply chain challenges and demonstrating rapid and highly reliable delivery capabilities, which contributed positively to the country's ranking.

Additionally, the United States, which ranked first, received high marks for its infrastructure and industrial sectors, while Singapore, in second place, was recognized for consistently securing growth momentum in its aerospace industry through strategic government investment in infrastructure.

The report also highlighted new opportunities in the defense and aerospace industries. It pointed out that the geopolitical crisis stemming from Russia, formerly the largest supplier of titanium, has brought attention to the titanium scrap recycling market as a new opportunity. Furthermore, the production of eco-friendly cargo aircraft and the maintenance, repair, and overhaul (MRO) sector are emerging as attractive investment destinations. The report also mentioned that major countries such as the United States, Singapore, and Canada are nurturing the aerospace industry as a future growth engine through government-level policy support and investment.

Kim Taesung, leader (partner) of the Defense Industry Center at Samil PwC, stated, "Both domestic and international defense companies are focusing not only on the MRO market, which extends the 'duration' of business, but also on expanding the 'scope' of the industry through ventures into space." He emphasized, "Securing technological capabilities through cooperation and investment with startups is essential in the space industry." He further predicted, "Strategic selection and concentration in future core sectors such as the space industry and unmanned aerial systems will be key factors in maintaining South Korea's current ranking."