A Case Study of Industrial Policy and Costing System in Defence Industry

Abstract

Defense industry policies and cost calculation systems have a great impact on defense companies. This study suggests implications for Korea’s defense industry policy and cost system through United States’ and Japan’s case analysis. First, in order to quickly respond to the rapidly changing defense market environment and promote export strategy, it is recommended to unify the defense export support organization. And it is necessary to make a policy for the defense industry as a long－term plan. In terms of cost system, it is required to conduct a joint periodic diagnosis of cost system to ensure transparency and reduce information asymmetry between the government and defense industry. In addition, for the stable introduction of the revision in 2020, education at the government level and the establishment of a dedicated department are necessary. Recognizing the problems with the defense cost system in Korea from this analysis and supplementing the policy with suggestions, promote the export competitiveness of the defense industry and proceed with the government’s policies efficiently, which contributes to the development of the Korean defense industry.