The outcome of the $60 billion Canadian submarine bid is disappointing. Given the all-out efforts from both the government and companies, there is a sense of frustration. Hanwha Ocean and HD Hyundai Heavy Industries challenged the Canadian Patrol Submarine Project (CPSP) with their world-class submarine technology, but the preferred bidder was ultimately decided to be Germany's TKMS. The fierce competition that lasted for several months did not yield the desired results.
However, this result should not be viewed solely as a failure. Just over 30 years ago, South Korea was a country that could not properly construct submarines. With the commissioning of the Changbogo-class submarine in 1993, it became the 43rd nation to operate submarines, and now it is recognized for its competitiveness, having competed closely with Germany, a global submarine powerhouse. The transformation demonstrated through this process is more significant than the outcome itself.
President Yoon Suk Yeol also commented on Facebook on July 7, stating, "Challenges come with both successes and disappointments," adding that "today's experience will serve as a valuable foundation for further enhancing our technology and competitiveness." His message emphasized the essence of accumulating industrial competitiveness over emotional disappointment.
President Yoon stressed that South Korea will continue to boldly take on challenges. However, the lessons from this bidding process are worth reflecting on. Notably, the formula for defense exports has changed. In the past, weapon performance and price were the decisive factors. Recently, defense exports have shifted from business-to-business (B2B) transactions to strategic competition between governments (B2G). Factors such as diplomatic relations, security cooperation, supply chains, industrial investment, financial support, maintenance and repair systems, and technology transfer are all evaluated as part of a single package.
In the Canadian submarine bid, the government dispatched Strategic Economic Cooperation Special Envoy Kang Hoon-sik multiple times, and companies also provided comprehensive support. Even Hyundai Motor Group, which is not directly related to defense, proposed collaboration plans with Canada, demonstrating that defense exports reflect the totality of national capabilities.
What comes next is crucial. The global defense market is likely to undergo significant restructuring over the next several decades. Europe is rearming, security demands are increasing in the Indo-Pacific region, and military enhancements are occurring in the Middle East simultaneously. New markets are opening not only for submarines but also for surface ships, unmanned systems, and AI-based command systems.
Our strategy must evolve as well. Simply excelling in weapon manufacturing is not enough. There is a need to meticulously establish a national-level export model that combines diplomacy, finance, industrial cooperation, energy, and supply chains. We should be able to propose long-term partnerships that encompass maintenance and repair (MRO), crew training, and local production collaboration after exports. This will be the new competitive edge for K-defense.
At the same time, we must be wary of excessive 'export omnipotence.' Demanding excessive burdens or sacrifices from companies unrelated to the project under the guise of national strategic projects is not sustainable. Public-private cooperation is most effective when based on voluntary participation and mutual benefits.
The Canadian submarine bid confirmed that K-defense can compete at the highest levels in the global market. The key takeaway is not a single result but the accumulated experiences. Using failures as a stepping stone to promote changes in technology and strategy, and having the courage to challenge again in the next opportunity, is the true strength.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.