In the national defense industries, problems reside in the shrinking of domestic demands and slumps in exports, accumulated deterioration of management, disparity of national defense technology compared to the advanced countries, and lack of consistency in institutional arrangements. Due to such matters, opinions have been raised for the promotion of national competitiveness overcoming through the institutional coevolution of revolution in military affairs and national defense technology. This inquiry, for the policy alternatives, suggests such institutional and policy arrangements as the establishment of powerful control tower leveled equivalent with advanced countries, organization of “Defense Export Promotion Agency,” institution of “Defense Information Technology Cooperation Center” for the co-prosperity and cooperation of big and small enterprises, local innovation cluster for the export of defense products connected with localities, Techno-Park and defense venture centers, promotion units for the swift acquisition and institutional innovation, fostering policies for small and medium-range businesses, activation of civil-military cooperation project, epochal transformation and simplification of defense R&D procedures, formulation of Global Value/Supply Chain enterance strategy, maintenance of Regional Strategic Post Exporting Defense Industrial Products for the exports in the region, and revitalization of free and competitive institutions for the advancement of high-tech national defense technology. In conclusion, this paper stresses policy alternatives of realizing smart defense and resolving structural problems to furnish consistent paradigmatic changes on the How to Fight in the case of national crisis, How to Win with effective military strategies, and How to Catch-up such advanced countries in the field of defense industries.