The South Korean defense industry's job creation remains much lower than that in the United States and Israel despite Seoul's large defense spending, a report said Sunday.

South Korea's defense spending accounts for approximately 10 percent of its overall budget, but the industry takes up a mere 0.9 percent of total manufacturing jobs, according to the report by the Korea Institute for Industrial Economics and Trade.
 

In comparison, Israel's defense sector accounted for 14 percent of all manufacturing jobs in the Middle Eastern country in 2014, with its defense expenditures amounting to 17 percent of its total budget.

In particular, Israel's unemployment rate has fallen to 5.9 percent from 10.7 percent in 2003 on the back of its efforts to create jobs in the defense industry by boosting arms exports.

The report also said the United States has been actively taking advantage of its defense budget to create more jobs. America's defense spending took up 15 percent of its federal budget in 2015, with the industry's employment accounting for more than 10 percent of all manufacturing payrolls.

The Trump administration plans to jack up its defense spending by more than 10 percent next year in an effort to boost domestic demand and lower the jobless rate.

Noting South Korea lacks a strategy to link its security environment with industrial development, the report called on the government to put more emphasis on the economic feasibility and efficiency of its massive weapons procurement projects so that they could contribute to employment.

The report expected South Korea to spend more on defense down the road due to growing tension on the Korean Peninsula, with its defense spending likely to rise from the current level of 40.3 trillion won ($35.5 billion) to up to 59.3 trillion won in 2022. (Yonhap)