Strategy Analytics said technology will be driving defense spending to $2.41 trillion in 2026, with the opportunities available to industry growing at a CAGR of 3.5 percent to reach $771 billion.
Modernization of defense will be one of the primary factors for growth in global defense spending, driven by developments in autonomous systems, missile, space and cyber-electronic warfare, and other technologies.
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 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 percent CAGR (compound annual growth rate), almost double the defense spending growth rate projected for North America,” said Anwar, director of the ADS service notes.
Combating the cyber threats – with defensive and offensive capabilities; maritime surveillance and border protection due to threats especially from unmanned systems; increasing mission envelopes with advanced radar, long range missile, unmanned systems and space-based capabilities are forcing nations to increase spending on defense.
Strategy Analytics’ 2017 defense analysis is based on an assessment of 95 countries that spent a minimum of $500 million on their annual defense in 2016.
