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Defense Industry Outlook: Emerging Defense Opportunities in 2024

Authored by Shweta Surender, MarketsandMarkets, 08 Feb 2024


In 2023, global defense spending surged by 18.5%, marking a significant increase that underscores the ongoing expansion in military expenditure amidst rising concerns over new security challenges fueled by persistent conflicts and geopolitical tensions. The defense market is swiftly adapting to the growing demands for advanced capabilities across various domains, including air, land, sea, and space. Key areas such as hypersonic missile defense, artificial intelligence (AI), electric vehicles (EVs), space forces, autonomous systems, digital transformation, and space situational awareness stand at the forefront of these market developments.

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 Defense Industry Outlook

Top defense companies, including Lockheed Martin Corporation, General Dynamics Corporation, Northrop Grumman Corporation, Saab, BAE Systems, and Thales, are at the forefront of this evolution, empowering military forces to upgrade their operational capacities and integrate cutting-edge technologies. A favorable startup ecosystem attracts military contracts and investments, leading to the growth of the defense industry. These startups are pivotal in incorporating AI into defense mechanisms, thus facilitating the advent of novel defense suppliers and the diffusion of next-generation military capabilities. The trend toward manned-unmanned teaming and AI-driven pilot systems exemplifies the ongoing shift in defense technology.

 Defense Industry Outlook

Autonomous counter-drone technologies and quadruped robots represent the next-generation military advancements poised to be integrated into operation in 2024. A range of defense manufacturers are in the process of developing these sophisticated capabilities to empower military clients with enhanced operational effectiveness and improved soldier safety in alignment with evolving mission demands.

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 Defense Industry Outlook

Intense current conflicts globally are prompting targeted increases in defense spending across various regions. Ukraine, notably, is benefiting from defense funds provided by an array of international allies, while defense firms are actively seeking to establish production facilities within the country. The ongoing geopolitical turmoil, sparked by the conflict between Israel and Hamas, has led to a series of armed confrontations in the Middle East, drawing in international allies and insurgent factions. Concurrently, space is emerging as a critical theater of military operations, with numerous nations inaugurating dedicated military space services. This shift is catalyzing an increase in space force budgets and amplify investments in military space technologies, including space situational awareness and low earth orbit (LEO) satellite constellations.

 Defense Industry Outlook


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Frequently Asked Questions

Q: Unmanned Platforms and Portable Systems to Adopt Hydrogen Fuel Cells

With increased field testing of hydrogen fuel cells, their deployment is anticipated across various unmanned and man-portable systems within the defense sector. This development is poised to establish a precedent for the widespread adoption of hydrogen fuel cell technology in compact system formats.

Q: Hypersonic Interceptors to be Developed and Integrated with Missile Defense Systems

As the development of hypersonic missiles progresses, the concurrent advancement of countermeasures, including hypersonic interceptors, signals an impending wave of technological enhancements within the missile defense arena.

Q: AI-enabled Pilot to be Deployed in Combat Aircraft

Anticipated allocations in defense budgets are set to fund the development of AI-enabled unmanned aircraft. AI-pilot technologies are expected to be integrated into existing manned aircraft. This move aims to showcase the next generation of advanced manned combat aircraft, potentially accelerating the ongoing efforts toward effective manned-unmanned teaming in military operations.

The Aerospace & Defense practice at MarketsandMarkets is diligently tracking the global defense industry, evaluating market sizes and trends to aid stakeholders in strategic decision-making. The firm offers in-depth defense industry analysis through the regular publication of comprehensive syndicate reports. One notable publication, the Defense Industry Outlook, delves into current trends and future prospects, offering a valuable resource for entities focused on seizing short-term and long-term revenue opportunities within the defense sector. This report serves as an essential tool for those aiming to grasp the recent historical context and forthcoming defense industry growth, thereby facilitating strategic planning and decision-making.

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