Partnership with allies is key to Seoul’s space plans

‘Korea has opportunities for satellite design, components in global space ecosystem’

This is the first in a two-part interview series with experts regarding the validity of South Korea’s aim to become a real player in the burgeoning space sector after the successful placement of small satellites into geosynchronous orbit on May 25 during the third launch of the locally-developed rocket Nuri, also known as KSLV-II. — ED.

Washington has persistently shown concerns about Beijing’s technological rise.

The impact of the COVID-19 pandemic was huge both for the U.S. and China, from a supply chain perspective. China’s lockdown hugely affected key industries in the U.S. as China is largely responsible for producing materials and parts vital to the operation of U.S. factories.

Such factors have led top policymakers in Washington to raise the necessity of reexamining the degree of connectivity that exists between U.S. companies and Chinese suppliers, pushing them to thoroughly consider the balance between cost and the risk of single-sourcing.

With growing geopolitical concerns regarding Taiwan Strait issues and North Korea’s evolving nuclear threat, the Joe Biden administration is taking detailed steps to protect against supply chain disruptions with full assistance from its key like-minded allies in East Asia: South Korea, Japan and Taiwan.

Washington previously identified semiconductor and battery industries as strategically important areas. During the period when the semiconductor supply chain recovered from the effects of the pandemic, the U.S. designated China’s rise as a threat to its national security.

Top Washington officials say the Biden administration wants to stymie Beijing’s attempts to attain foundational technologies such as artificial intelligence and quantum computing by cutting off access to the advanced data-processing power required.

In this regard, the recent diplomatic developments between Seoul and Tokyo are welcomed by the Biden administration, which believes the improved relationship will help respond to China’s challenge to the rules-based order, improve security cooperation on the Korean Peninsula and keep the tech supply chain strong, according to intelligence officials and think tanks in Washington.

Like semiconductors and batteries, the space ecosystem plays an important role in advancing global security priorities. The space industry sector is at an inflection point, and given the country’s advantages in manufacturing, South Korea is positioned to become a player in the space sector but only when based on the close collaboration with its allies.

Speaking to The Korea Times, Stephane Lagut, a senior executive at Ernst & Young (EY), a global consultancy firm, advised South Korea to seek an expanded partnership with the U.S., Japan and its allies in the EU if it wants to become a player in the burgeoning space sector.

“By its very nature, the space exploration industry is outward looking, if South Korea is serious about becoming a player in the space sector, then it needs to think beyond its borders. Collaboration is key; think of the semiconductor industry as a model to copy,” Lagut, EY’s global aerospace and defense sector leader, said in a recent interview.

“I would encourage the sector in South Korea to think beyond the longest-established players. The U.S., Russia and China are the major powers in the sector. However, South Korea should also consider private partners, as well as space sectors in Japan and Europe,” said Lagut.

South Korea ambitiously set its plans to land a spacecraft on the moon by 2032 and Mars by 2045. It recently launched multiple commercial satellites aboard a made-in-Korea rocket, Nuri, for the first time. A few days after the launch, North Korea launched what it calls a satellite, too.

While weapons analysts say the successful launch of the KSLV-II Nuri rocket has helped the country get a technological advantage, and North Korea has been quick to develop and launch long-range rockets that could carry satellites, the two Koreas are still far from having a complex network of spy satellites.

“Leveraging alliances is certainly an easier path there. In terms of playing to its strengths, South Korea would have a wider range of opportunities for satellite design, components and integration,” the senior executive answered.

“South Korea has the established and much-envied expertise in high precision manufacturing, electronics, semiconductors and research and development (R&D) that would be required and could be built upon. It has powerful integrated industrial groups and the ability to attract and mobilize capital, which are also strong factors,” he assessed.

Public-private partnership

Unlike North Korea’s case, where intelligence officials view spacebased satellite technology as crucial to strengthening its nuclear strategy, South Korea is in the process of developing and advancing its space programs quite openly and transparently.

Lagut advised the government to create general conditions such as technology education and intellectual property (IP) legislation, so as to secure the freedom to invest and innovate.

“A provision of seed money where needed and the conditions for international cooperation are also necessary because the general trend in the sector is actually an increase in private investments and public-private partnerships. Direct government spending on space programs is declining and more often they will contract with the private sector,” he explained.

The space sector supply chain includes satellite manufacturers, specialists, rocket companies and others. What’s driving the growth of the space sector is that satellite technology is becoming less expensive and even satellites themselves have become smaller over the years, making them cheaper and cheaper to launch. Private companies or government-assisted private firms will be able to build the necessary budget, according to experts.

“Countries and companies entering the space industry now are standing on the shoulders of giants. They can benefit enormously from experience acquired by their predecessors and also from the existing technological and geopolitical ecosystem to select the markets they wish to address such as manufacturing, components, services, integration, launch etc.,” the senior executive said.

Regarding the role of the South Korean government in the global space competition, Lagut asked top policymakers to leave freedom for the private sector to innovate.

“It is vital that countries have the legal and regulatory framework supportive of freedom of investment and innovation such as R&D credits and workforce upskilling in order to create the conditions to attract and retain talents throughout the deep supply and value chain,” he responded, adding that the South Korean government can support links between higher education, manufacturing 4.0 and smart materials developers, while also providing a clear, stable and secure framework for international cooperation.

“An aging workforce is a hurdle. Governments and the private sector are finding this to be the case across many developed economies. They’ll need to work together to create the conditions to attract and retain talent in South Korean businesses.”