Future of the Swiss Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

  • ID: 4522231
  • Report
  • Region: Switzerland
  • 65 Pages
  • Strategic Defence Intelligence
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With a neutral stance during times of war and a reputation for being a peace loving nation, Switzerland has traditionally made only modest budget allocations to defense. In 2018, the Swiss Government increased its defense budget expenditure by 6.7% compared to the previous year. The growth was triggered by the country’s need to invest in military equipment and devices based on new age cutting-edge technologies, replacing outdated equipment. Consequently, Swiss military expenditure is forecast to increase steadily, to reach US$6.5 billion in 2023, at a CAGR of 4.67%, over the forecast period.

During 2019-2023, Switzerland is expected to assign an average of 24.7% of its defense budget to capital expenditure, higher than recorded during 2014-2018. The remainder of the budget will be used to meet revenue expenditures. The country is expected to invest in the procurement of C4ISR, cyber security, UAV’s, critical infrastructure protection (CIP), and military radar, over the forecast period. In addition, the defense board aims to upgrade its existing communications network, as well as incorporating improved levels of internet security.

Swiss expenditure on homeland security was US$1.40 billion in 2018. In the next five years, expenditure is projected to increase marginally, growing at a CAGR of 0.91%. The nation’s homeland security expenditure will be primarily directed towards countering illicit activities such as burglaries, the drug trade, and cyber fraud. Equipment suppliers are likely to experience an increase in demand for equipment related to surveillance activities.

The country’s budget for homeland security is projected to increase over the forecast period, driven by the need to fight against organized crime, money laundering, financing of terrorist activities, and human trafficking. Additionally, the country is expected to invest in border security equipment. Demand for equipment is mainly expected to revolve around C4ISR, military IT, data and computing, critical infrastructure protection (CIP), military UAV, military radar, EO/IR and cyber security.

The report "Future of the Swiss Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the Swiss defense industry with market size forecasts covering the next five years.

In particular, it provides an in-depth analysis of the following:

  • The Swiss defense industry market size and drivers: detailed analysis of the Swiss defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: list of the top ten defense investment opportunities over the next 5 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Swiss defense industry.

Companies mentioned in this report: Elbit Systems, Thales Group, Revision Military, Inc., Pilatus Group, RUAG Defense, General Dynamics European Land Systems (GDELS).

Scope:

  • The Swiss defense budget, which is projected to be US$5.1 billion in 2018, is expected to increase at a CAGR of 4.67% over the forecast period and reach US$6.5 billion by 2023.
  • Defense expenditure amounted to 0.7% of overall GDP in 2018, and is expected to increase over next five years, to an average of 0.8%.
  • The country’s defense expenditure will be driven by its neutral stance; as it obliges them to be independent and be capable of providing for their own security.

Reasons to buy:

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Swiss defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Swiss defense industry covering sections including demand drivers, Key Trends , and latest industry contracts
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1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Military Fleet Size
3.1.2. Procurement Programs
3.1.3. Key Drivers and Challenges
3.1.3.1. Switzerland’s defense neutrality challenging for defense foreign companies
3.1.3.2. Foreign enterprises can enter the Swiss market by acquiring or partnering with a national defense corporation
3.1.3.3. The country’s small defense budget is a challenges in terms of market entry
3.2. Defense Market Size Historical and Forecast
3.2.1. Swiss defense budget is expected to register a CAGR of 4.67% over the forecast period
3.2.2. Procurement of better defense systems and peace-support programs to drive defense expenditure
3.2.3. Defense expenditure as a percentage of GDP is expected to average 0.8% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure share expected to increase over the forecast period
3.3.2. Capital expenditure expected to grow at a CAGR of 7.86% over the forecast period
3.3.3. Per capita defense expenditure expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Swiss homeland security expenditure expected to increase at a CAGR of 0.91% over the forecast period
3.4.2. Organized crime and terrorist financing are the major threats to homeland security
3.4.3. Switzerland is at some risk from external and internal threats
3.4.4. Switzerland faces some level of threat from foreign terrorist organizations
3.4.5. Switzerland has a terrorism index score of 0.3
3.5. Benchmarking with Key Global Markets
3.5.1. Switzerland’s defense budget to increase at a CAGR of 4.67% over the forecast period
3.5.2. Switzerland military expenditure is low when compared to the largest defense spenders
3.5.3. The country allocates a lower percentage of GDP towards defense as compared to other top defense spenders globally
3.6. Market Opportunities: Key Trends
3.6.1. Top 10 Defense market sectors by value (US$ Million) - Projections over period 2018-2023

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports to be driven by modernization initiatives over the forecast period
4.1.2. Swiss defense sourced the majority of its arms from the US
4.1.3. Missiles accounted for the majority of defense imports during 2013-2017
4.2. Export Market Dynamics
4.2.1. Swiss defense exports peaked in 2014 and registered their highest since 2008
4.2.2. Switzerland supplies defense equipment to a diverse consumer base
4.2.3. Aircraft accounted for the majority of the country’s defense exports during 2013-2017

5. Industry Dynamics
5.1. Market Regulation
5.1.1. Offset policy requires suppliers to invest 100% of the contract value into the Swiss economy
5.1.2. Swiss defense industry open to foreign direct investment
5.2. Market Entry Route
5.2.1. Foreign defense companies enter the market via acquisitions or alliances
5.2.2. Establishment of subsidiary or operating unit in Switzerland
5.2.3. Entering into joint ventures

6. Competitive Landscape and Strategic Insights
6.1. Competitive Landscape Overview

7. Business Environment and Country Risk
7.1. Economic Performance
7.1.1. GDP Per Capita
7.1.2. GDP, Current Prices
7.1.3. Exports of Goods and Services (current LCU Billion)
7.1.4. Imports of Goods and Services (current LCU Billion)
7.1.5. Local Currency Unit per US Dollar
7.1.6. Market Capitalization of Listed Companies (US$ Billion)
7.1.7. Market Capitalization of Listed Companies (% of GDP)
7.1.8. Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
7.1.9. Goods Exports as a Percentage of GDP
7.1.10. Goods Imports as a Percentage of GDP
7.1.11. Services Imports as a Percentage of GDP
7.1.12. Service Exports as a Percentage of GDP
7.1.13. Foreign Direct Investment, net (BoP, current US$ Billion)
7.1.14. Net Foreign Direct Investment as a Percentage of GDP
7.1.15. Mining, Manufacturing, Utilities Output LCU Billion

8. Appendix

List of Tables:
Table 1: Swiss Army Strength
Table 2: Swiss Air Force Strength
Table 3: Swiss Ongoing Procurement Programs
Table 4: Swiss Future Procurement Programs
Table 5: Swiss Defense Expenditure (CHF Billion & US$ Billion), 2014-2023
Table 6: Swiss GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023
Table 7: Swiss Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 8: Swiss Defense Capital Expenditure (CHF Billion & US$ Billion), 2014-2023
Table 9: Swiss Per Capita Defense Expenditure (US$), 2014-2023
Table 10: Swiss Homeland Security Expenditure (CHF Billion & US$ Billion), 2014-2023
Table 11: Terrorism Index, 2018
Table 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 13: Top 10 Swiss Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 14: Offset Regulations in Switzerland
Table 15: Competitive Landscape of the Swiss Defense Industry

List of Figures:
Figure 1: Swiss Defense Expenditure (CHF Billion), 2014-2023
Figure 2: Swiss Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Swiss GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2014-2023
Figure 4: Swiss Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Swiss Capital Budget Allocation (CHF Billion), 2014-2023
Figure 6: Swiss Capital Budget Allocation (US$ Billion), 2014-2023
Figure 7: Swiss Per Capita Defense Expenditure (US$), 2014-2023
Figure 8: Swiss Homeland Security Expenditure (CHF Billion), 2014-2023
Figure 9: Swiss Homeland Security Budget (US$ Billion), 2014-2023
Figure 10: Terrorism Heat Map, 2018
Figure 11: Terrorism Index, 2018
Figure 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018
Figure 15: Swiss Defense Import Trend (US$ million), 2013-2017 (TIV values)
Figure 16: Swiss Defense Imports by Country (%), 2013-2017
Figure 17: Swiss Defense Imports by Category (%), 2013-2017
Figure 18: Swiss Defense Exports Trend (US$ Million), 2013-2017
Figure 19: Swiss Defense Exports by Country (%), 2013-2017
Figure 20: Swiss Defense Exports by Category (%), 2013-2017
Figure 21: Swiss GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 22: Swiss GDP, Current Prices (US$ Billion), 2015-2025
Figure 23: Swiss Exports of Goods and Services (current LCU Billion), 2005-2014
Figure 24: Swiss Imports of Goods and Services (current LCU Billion), 2005-2014
Figure 25: Local Currency per USD, 2015-2024
Figure 26: Swiss Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 27: Swiss Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 28: Swiss Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2011
Figure 29: Swiss Goods Exports as a % of GDP, 2005-2014
Figure 30: Swiss Goods imports as a % of GDP, 2005-2014
Figure 31: Swiss Services Imports as a % of GDP, 2005-2014
Figure 32: Swiss Service Exports as a % of GDP, 2005-2014
Figure 33: Swiss Foreign Direct Investment, net (BoP, current US$ Billion), 2005-2014
Figure 34: Swiss Net Foreign Direct Investment as a % of GDP, 2005-2014
Figure 35: Swiss Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014

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  • Elbit Systems
  • Thales Group
  • Revision Military, Inc.
  • Pilatus Group
  • RUAG Defense
  • General Dynamics European Land Systems (GDELS)
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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