The South Korean government is fast-tracking a special law to nurture startups in emerging national-security fields. It aims to pass the bill through the National Assembly within the year, while simultaneously preparing subordinate regulations and a support framework, with the goal of launching full-scale company support as early as late in the first half or early in the second half of next year.
According to reporting by The Seoul Economic Daily, the Ministry of SMEs and Startups is working toward enacting the Special Act on Fostering Future Emerging Security Innovation Companies within the year. The law is expected to include a government-wide support framework for identifying and nurturing innovative companies in emerging security fields, along with the legal basis for investment and research and development (R&D) support. The government has defined five branches of future emerging security: drones and robots; defense artificial intelligence (AI) and semiconductors; sensors and future materials; space and aerospace; and cybersecurity and quantum communications. The focus is on dual-use technologies that can be used by both the private sector and the military.
The government has set U.S. companies that entered the security market with private-sector technology as its model — including the defense software firm Palantir and the unmanned defense firm Anduril. It has set a goal of raising five companies valued at more than 1 trillion won and 50 companies with revenue of more than 100 billion won by 2030.
What the government sees as its core task is moving up the launch date as much as possible. Newly enacted laws require new subordinate regulations such as enforcement decrees and enforcement rules, so it typically takes about a year from promulgation to enforcement. But as global competition over emerging security technologies accelerates, a consensus is forming that the preparation period should be cut to six months. A senior MSS official said that newly enacted laws usually take about a year because of the time needed to create enforcement decrees and rules, but added that the government should consider making it possible to take effect within six months of promulgation, given the market’s demand for quick support.
Accordingly, the government plans to prepare subordinate regulations and detailed project plans in parallel while the bill is being discussed in the National Assembly. If the bill passes the National Assembly within the year and the preparation period is set at six months, support programs based on the special law could begin operating as early as late in the first half or early in the second half of next year. The Presidential Office is also treating the fostering of emerging security innovation companies as a major policy task, so follow-up measures are expected to gain momentum.
The Emerging Security Innovation Company Fostering Committee, the control tower for related policy, is also being prepared so it can launch at the same time the law takes effect. As originally planned, the bill is being drafted so that the prime minister chairs the committee. Some have raised the possibility that a key Presidential Office figure could take the role, but the government is drawing a line against that. One government official said the bill currently being drafted also has the prime minister serving as chair, and added that changes seem unlikely.
Coordination among relevant ministries remains a challenge. The MSS, the Ministry of Finance and Economy, the Ministry of National Defense, the Financial Services Commission, the Ministry of Budget and Planning, the Defense Acquisition Program Administration and the Korea AeroSpace Administration held their first meeting to push follow-up measures on July 29 — more than a month after a Presidential Office strategy meeting on June 26. The government plans to hold a monthly working-level consultative body to address issues among ministries, but the industry points out that coordination must move faster to advance the law’s enforcement.
Preparations are also gaining speed for a “Korean In-Q-Tel,” modeled on In-Q-Tel, the venture investment institution established by the U.S. Central Intelligence Agency (CIA) in 1999 to invest in private-sector technology needed on the security front. The government plans to finalize its establishment and operation plan within this year so that it can begin investing immediately after the law takes effect. The Korea Venture Investment Corp. is understood to be pushing to set up a subsidiary, having appointed a director-level executive to head an internal task force (TF) and begun securing personnel.
One defense company CEO said that trying to include everything in the special law could cause further delays, and that one approach would be to include only the essential provisions first, pass it, and ensure that support and investment happen quickly.
#DefenseTech#Startups#Korea#DualUse#InQTel#NationalSecurity#VentureInvestment
Original reporting by Ryu Seok for Seoul Economic Daily.
AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.
View Korean originalTranslation Policy
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