Cybersecurity market set to boom in AI era; experts urge greater private-sector role in public projects

South Korea should expand opportunities for domestic private companies to participate in large-scale public projects and strengthen policy support for overseas expansion, so that businesses can seize new opportunities in the rapidly growing cybersecurity market driven by the spread of AI, a new report argues.

The Korea Economic Association said Tuesday it had commissioned a report titled "Paradigm Shift in Cybersecurity and Measures to Promote the Industry" from Kim Ki-hyung, a professor at Ajou University, calling for cybersecurity to be developed as a core sector that drives both national competitiveness and industrial growth.

According to the report, South Korea's cybersecurity market is projected to grow at an average annual rate of 17.3%, rising from about 8.2 trillion won ($5.32 billion) in 2025 to 18.2 trillion won in 2030 — nearly double the global market growth rate of 9.1%.

Professor Kim cited the United States as a model, where cybersecurity technology development and service provision are entrusted to the private sector. "The cybersecurity industry can achieve full-scale growth when a virtuous cycle is established in which the government sets the direction and creates initial demand, while the private sector leads technological innovation and market expansion," he said.

A prominent example is the Cybersecurity Framework published by the US National Institute of Standards and Technology to strengthen security at critical national facilities, which has become a shared standard for both the public and private sectors. American companies have focused on technology development, investment and mergers and acquisitions to meet the framework's standards, and now lead the global cybersecurity market.

Israel has similarly advanced its Israel Cyber Defense Methodology, which reflects the country's security environment and industrial characteristics while improving compatibility with international standards. This has allowed Israeli companies that meet those standards to enter overseas markets naturally.

Kim proposed three measures to invigorate South Korea's cybersecurity industry: introducing a performance-based procurement system, building a security data pool, and establishing a dedicated growth-support track.

For public procurement projects, he said the current emphasis on certification compliance should shift to performance evaluations that assess how effectively a solution withstands external attacks, with contractors selected on that basis. This, he argued, would allow high-performance security services to enter the market at an early stage and build a track record.

Kim also proposed that security-related information accumulated by public institutions and critical facilities be anonymized and de-identified, then made available as a training infrastructure for private companies to use in research and development and service enhancement.

Companies currently rely on data they have secured on their own, which limits their ability to advance AI-based security capabilities, the report noted.

In addition, Kim called for expanding opportunities for promising companies to participate in large public projects and strengthening policy financing, tax incentives and export-linked programs to support overseas expansion. The report also raised the need to reform the regulatory regime so that strategic investment in and acquisitions of security startups can serve as a driver of industry advancement.

Kwon Hyeok-min, head of the Korea Economic Association's growth strategy division, said cybersecurity "will become a strategic sector that underpins both the stability and competitiveness of our industries," adding that policy support must be strengthened so that domestic cybersecurity companies can compete not only in the home market but on the global stage as well.