New defense R&D projects led by private firms and startups on the decline
Civil-military technology cooperation sees sharpest drop in new projects
Rapid acquisition institute's use of civilian technology also falling
As AI, drones, cyber capabilities, space systems and software — technologies driven largely by the private sector — emerge as defining elements of modern warfare, pressure is growing on South Korea's defense acquisition system to convert civilian innovations into military capabilities quickly. The government has pursued that goal through various defense technology research and development programs, but the number of new projects led by private companies and startups has actually been falling since 2022.
Data submitted by the Defense Acquisition Program Administration (DAPA) to the National Assembly Research Service show that new defense technology R&D projects led by private companies and startups — spanning core technology, civil-military technology cooperation, rapid demonstration, future challenge and future bridge programs — dropped from 135 in 2022 to 39 in 2025. Observers say the trend runs counter to the government's stated policy of expanding the use of civilian innovative technology.
New private-sector and startup projects fall from 135 in 2022 to 39 in 2025
The nature of warfare has been shifting away from a small number of high-cost platforms toward low-cost, high-volume intelligent weapons systems combined with manned-unmanned teaming. AI and software in particular evolve rapidly and require constant updates, making it difficult to field them on time under the traditional acquisition model, which locks in detailed operational requirements upfront and then runs lengthy development cycles. The government has sought to work around this through core technology research, civil-military technology cooperation, rapid demonstration, future challenge and future bridge programs.
The steepest decline came in civil-military technology cooperation. New projects in that category led by industry, universities and research institutions combined rose from 52 in 2021 to 73 in 2022, then fell to 40 in 2023, 10 in 2024 and 12 in 2025. Among those, projects led specifically by private companies and startups climbed from 37 in 2021 to 55 in 2022 before dropping to 10 last year.
The Defense Rapid Acquisition Technology Research Institute — a DAPA affiliate established in 2022 to handle rapid acquisition — has also recorded a steady decline in its use of civilian technology every year since its founding: seven cases in 2022, four in 2023, three in 2024 and two last year.
'Current acquisition system ill-suited to fast adoption of civilian tech'
The National Assembly Research Service said the current acquisition system has structural limitations in rapidly incorporating civilian innovations and translating them into actual military capability. Existing demand-generation and contracting procedures do not adequately reflect the characteristics and pace of development of cutting-edge civilian technology, it said. The scope and selection criteria for advanced and innovative technologies also lack clarity, and the military's practice of fixing equipment types and detailed performance specifications in advance can constrain private companies from proposing new alternatives.
The research service also found that applying bidding, cost accounting and intellectual property requirements similar to those for conventional defense procurement can raise barriers to entry for startups with little experience in the defense sector. It added that the "Agile Development Introduction and Operation Guidelines" remain largely confined to administrative directives and pilot projects, limiting their ability to drive broader improvements across demand generation, budgeting and contracting.
"There is a need to examine whether the systems and performance management frameworks that are supposed to link rapid demonstration project results to follow-on procurement and mass production are actually functioning effectively," the research service said. "In particular, the intent behind rapid acquisition risks being undermined because even after a pilot operation, projects must still go through demand determination, feasibility review, budget allocation and contracting procedures."
keg@heraldcorp.com
