Current forecasts indicate an average projected CAGR of approximately 3 percent between 2020 and 23, and overall global investment will be approximately $2.1 trillion by the end of that period.
Fremont, CA: Few sectors are as potentially lucrative-or potentially uncertain-as the aerospace and defense industries. For investors, these are often high-risk/high-reward proposals, particularly in times of global unrest and political upheaval.
2020 is looking to be an incredibly exciting year for the defense sector, with several new challenges already shaking up the status quo.
4 Major Challenges and Trends for the Defense Industry this year
More Focus in the Asia-Pacific Region
One of the biggest game changers this year in the defense industry is that there will be more attention in the Asia-Pacific region. Many nations in the region are reassessing their defense capabilities, and governments are expanding industrial solutions to meet increasing economic and security concerns. For this cause, there has been an increase in design, research, commercial development and other support networks for defense manufacturers.
Military Spending is Up Across the Globe
Governments around the world are investing more on security, both buying new weapons and upgrading their infrastructure. Current forecasts indicate an average projected CAGR of approximately 3 percent between 2020 and 23, and overall global investment will be approximately $2.1 trillion by the end of that period. The US, China, Russia, India, and many others will all contribute to this.
Mergers & Acquisitions to Continue
M&A has been a big defense driver for many years, and there is little reason to expect improvement. Consolidation can help to simplify increasingly complicated supply chains and scale-up problems while potentially providing opportunities to address regulatory barriers or gain access to emerging technology.
Implementation of More-Electric Aircraft (MEA)
There is a rising demand for more fuel-efficient aircraft in the aerospace and defense sectors. This is primarily due to the effort to minimize acquisition and ownership costs. While obstacles remain to a complete step towards All-Electrical Aircraft (AEA) technology, such as safety and efficiency problems, many in the defense industry will undoubtedly see a major push to introduce MEA solutions.