Defense Global Market Opportunities and Strategies to 2033

This report describes and explains the defense market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global defense market reached a value of nearly $573.5 billion in 2023, having grown at a compound annual growth rate (CAGR) of 62% since 2018. The market is expected to grow from $573.5 billion in 2023 to $780.8 billion in 2028 at a rate of 6.4%. The market is then expected to grow at a CAGR of 4.6% from 2028 and reach $975.4 billion in 2033.

Growth in the historic period resulted from increasing the use of military drones, demand for attack and transport helicopters, low-interest rates, increasing spending on military equipment and increasing military expenditure. Factors that negatively affected growth in the historic period was defense budget reductions in developed nations and geopolitical tensions.

Going forward, government initiatives, technological advancements, increasing internal and external security threats and increasing military modernization programs will drive the growth. Factor that could hinder the growth of the defense market in the future include increased cyber-attacks and global recession.

The defense market is segmented by type into air-based defense equipment, sea-based defense equipment, land-based defense equipment, defense equipment maintenance, repair and overhauling services and defense support and auxiliary equipment. The air-based defense equipment market was the largest segment of the defense market segmented by type, accounting for 38.1% or $218.7 billion of the total in 2023. Going forward, the sea-based defense equipment segment is expected to be the fastest growing segment in the defense market segmented by type, at a CAGR of 8% during 2023-2028.

The defense market is segmented by operation into autonomous defense equipment and manual. The manual market was the largest segment of the defense market segmented by operation, accounting for 80.7% or $462.59 billion of the total in 2023. Going forward, the autonomous defense equipment segment is expected to be the fastest growing segment in the defense market segmented by operation, at a CAGR of 7.5% during 2023-2028.

The defense market is segmented by platform into airborne, land and naval. The airborne market was the largest segment of the defense market segmented by platform, accounting for 51.5% or $295.3 billion of the total in 2023. Going forward, the naval segment is expected to be the fastest growing segment in the defense market segmented by platform, at a CAGR of 6.8% during 2023-2028.

Asia Pacific was the largest region in the defense market, accounting for 31% or $177.5 billion of the total in 2023. It was followed by North America, Middle East and then the other regions. Going forward, the fastest-growing regions in the defense market will be Middle East and South America where growth will be at CAGRs of 11% and 10% respectively. These will be followed by Africa and Western Europe where the markets are expected to grow at CAGRs of 8.5% and 6.7% respectively.

The global defense market is concentrated, with large players operating in the market. The top ten competitors in the market made up to 43.71% of the total market in 2023. Lockheed Martin Corporation was the largest competitor with a 10.02% share of the market, followed by Raytheon Technologies Corporation with 7.29%, Northrop Grumman Corp with 5.46%, General Dynamics with 5.16%, The Boeing Company with 3.91%, BAE Systems plc with 3.25%, L3Harris Technologies with 2.88%, Leonardo SpA with 1.97%, Huntington Ingalls Industries Inc. with 1.90% and Thales Group with 1.87%.

The top opportunities in the defense market segmented by type will arise in the air-based defense equipment segment, which will gain $87.4 billion of global annual sales by 2028. The top opportunities in the defense market segmented by operation will arise in the manual segment, which will gain $158.88 billion of global annual sales by 2028. The top opportunities in the defense market segmented by platform will arise in the airborne segment, which will gain $104 billion of global annual sales by 2028. The defense market size will gain the most in the USA at $26.2 billion.

Market-trend-based strategies for the defense market include investing in facilities and staying ahead of competitors, collaborations and sales partnerships to strengthen their market position, launch of innovative technologies, such as AI (artificial intelligence)-enabled systems, investments in next-gen technology and focus on the launch of innovative platforms, such as edge computing on the battlefield.

Player-adopted strategies in the defense market include focus on strengthening business operations through securing new contracts, strategic investments in aligned businesses for future growth, expanding its product portfolio by developing new products and investing in modern warfare and missile technologies, expand maritime operations and developing a robust defense infrastructure through investing in modern and advanced defense systems and companies.

To take advantage of the opportunities, the analyst recommends the defense companies to focus on facility expansion, focus on innovative platforms, focus on launching ai-enabled systems, focus on investing in next-generation technologies, focus on sea-based defense equipment segment, focus on autonomous defense equipment segment, focus on strategic partnerships, expand in emerging markets, continue to focus on developed markets, provide competitively priced offerings, focus on strategic pricing strategies, participate in trade shows and events, continue to use B2B promotions, focus on naval segment and focus on governments.

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