Force modernization will be one of the primary factors underpinning growth in global defense spending, driven by unprecedented developments in autonomous systems, missile, space and cyber-electronic warfare, and other technologies. Strategy Analytics: The Strategy Analytics Advanced Defense Systems (ADS) service report, “Global Defense Spending Outlook 2016-2026,” forecasts the global defense budget will grow to $2.41 trillion in 2026, with the opportunities available to industry growing at a CAGR of 3.5% to reach $771 billion.

·       https://www.strategyanalytics.com/access-services/components/defense/market-data/report-detail/global-defense-spending-outlook-2016-2026

          Our analysis reveals a number of common drivers that recur within and across the different regions that will provide the impetus for industry growth. These include combating the increasing menace of cyber threats- with both defensive and offensive capabilities; maritime surveillance and border protection in the face of evolving threats especially from unmanned systems; increasing mission envelopes with advanced radar, long range missile, unmanned systems and space-based capabilities.

Strategy Analytics’ 2017 global defense analysis is based on an assessment of 95 countries that spent a minimum of $500 million on their annual defense in 2016. Strategy Analytics’ outlook for global defense spending is based on baseline information from SIPRI (Stockholm International Peace Research Institute); information on the SIPRI data can be found at http://www.sipri.org/research/armaments/milex/milex_database/milex_database.

This is followed by an individual assessment of each of the countries, looking at a range of factors including GDP growth, threat perception and political intent on force modernization and indigenization of the local defense industry covering a ten-year timeframe. Strategy Analytics defense spending outlook forecast is based on a range of factors used to assess global, regional and country-by-country analysis of overall military spending covering procurement (including R&D), services, personnel, infrastructure etc. This in turn provides the basis for forecasting platform, system, subsystem and enabling technology spend that underpins subsequent forecasts.

Global defense spending stabilized in 2016 following a dip in 2015, and this growth is forecast to continue in 2017 to reach $1.75 trillion. A renewed emphasis on growing defense spending in the USA, bar the limitations of a continuing resolution, coupled with a changing economic environment in China will mean that defense spending in the Asia-Pacific (APAC) region is unlikely to surpass North American spend levels through 2026. However, APAC defense spending will maintain the strongest growth trajectory, with a 5.4% CAGR (compound annual growth rate), almost double the defense spending growth rate projected for North America.

Meet Strategy Analytics for one-to-one defense discussions at the Defence, Security and Space (DSS) Forum during European Microwave Week, and at MILCOM 2017