The global defense market is projected to grow robustly over the forecast period (2016 to 2024). This attributes to high military budgets being set aside by most governments worldwide. A number of countries are investing greatly in research & development of newer technologies for military applications. Rising defense budgets is a direct reflection of increasing economic development. It is because of favorable economic growth that countries can invest in defense and thus protect themselves from external aggression.
However, demilitarization is a major hindrance to the growth of the worldwide defense market. Several countries are striving towards reducing the use of arms and weapons in order to move towards greater global peace. There is an air of dilemma among most economies whether or not to import defense technologies. Some countries are typically advanced in the area of defense technologies, while many others aren’t. Most Asian economies rely majorly on imports of defense equipment. However, ongoing trends suggest that this pattern might undergo a noteworthy change over the forecast period. These countries may begin directing their resources towards greater R&D of defense equipment.
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The worldwide defense market is segmented on the basis of type of equipment and regions. Defense equipment encompass naval systems, sensors & radars, ground vehicles, unmanned systems, and missile systems. Demand for ground vehicles is by far the highest. Growing significance of radars & missiles attributes to innovations that have led to the development of modern and highly sophisticated radar systems. These systems are an amalgam of digital signal processors, complex A-D convertors, solid state modules, and advanced materials.
Modern radar systems are often equipped with excellent imaging capabilities. As against earlier radar systems that needed separate systems for performing the same tasks, these sophisticated radars are quite versatile. They perform varied functions, like weather monitoring, target tracking, wide area searches, and fire control. Since they call for minimal human intervention, unmanned vehicles may gain much importance in the near future. The incorporation of intelligent systems in unmanned vehicles may further increase the latter’s significance in defense.
On the basis of regions, the worldwide defense market is segmented into North America, the Middle East & Africa, Europe, and Asia Pacific. Europe and North America have taken to ‘demilitarization’ in a strong manner, which is why military expenditure from these regions may plunge rapidly in the near future. Most global manufacturers are gradually shifting their focus towards the Asia Pacific market because this region is witnessing a surge in military budgets by various governments. This regional market is fuelled by robust investments in defense equipment by China, India, and Japan. Low income economies of Africa and the Middle East invest in defense equipment mainly to protect their economic development.
Prominent companies in the global defense market are Lockheed Martin, Northrop Grumman, United Technologies (UTX), BAE Systems, and General Dynamics. Northrop Grumman is a leading manufacturer of space equipment, missile electronics, aircraft, and ships. BAE Systems, a non U.S. based company is the largest manufacturer of space equipment, electronics, missiles, and aircraft. And Lockheed Martin manufactures the F-35 weapon system.