The impact of pandemics on the global economy over the past 50 years provides limited guidance on expectations from the recovery period - mainly due to the globalization of world trade and the most severe restrictions on democratic freedoms in modern memory.
While the medical community can look at previous pandemics to help model their countermeasures, economists are examining the 2008-2009 global financial crisis for comparison. At the time of writing this research service, the International Monetary Fund (IMF) had predicted a 3% contraction in the global economy for 2020 (based on the assumption that the pandemic would continue to fade in the economic powerhouses). The IMF anticipates a return to growth of 5.8% in 2021, presuming “economic activity normalizes, helped by [government] policy support”. At present, a V-type recovery is predicted for 2021.
As defence spending is driven by annual budgets, it is will remain resilient to drastic short-term falls in the GDP. In addition, defence budgets are driven by threats to national sovereignty more than financial affordability within the GDP (however, the two are linked, more often than not). Therefore, the publisher predicts that defence spending will be flat, initially, and rebound later, if the geopolitical instability driven by China, Russia, Iran, North Korea, and non-state terror organisations continues (the trend is highly likely to continue). While some nations, such as South Korea, plan to divert defence spending to crisis management, the boundaries between both are blurred and, in this case, completely tied to the threats and actions of its Northern neighbour.
However, within the predicted flat budget, nations will re-appraise their defence spending plans (typically, over the 10 years of their delivery). Thus, opportunities to modernize and transform must be leveraged. Some legacy programs will be replaced by technologically advanced systems, especially those proven to have dual use in aiding the Civil Authorities, such as military field hospitals. In addition, the impact of the pandemic in terms of greatly reducing global military operations and live training means that viable deterrents will be sought; a logical component of this will be the increased importance of simulation in training.
The publisher recommends that industry leaders focus on strategic imperatives and build growth mechanisms now as innovation and agility will determine the new industry paradigm.
1. Strategic Imperatives
- Why is it Increasingly Difficult to Grow?
- The Strategic Imperative 8™
- The Impact of the Top Three Strategic Imperatives on Simulation in Defence Training
- Growth Opportunities Fuel the Growth Pipeline Engine™
2. Growth Opportunity Analysis - Simulation in Defence Training
- Impact of the COVID-19 Pandemic on the Global Defence Industry
- Impact of the COVID-19 Pandemic on Global GDP Growth
- Impact of the COVID-19 Pandemic on Key Countries and Regions’ GDP Growth
- Historical Defence Spending Against GDP Growth
- Simulation in Defence Training During the New Normal
- Current and Future Impact of the COVID-19 Pandemic on Defence Training
- Post-COVID-19 Simulation in Defence Training Opportunities
3. Growth Opportunity Universe - Simulation in Defence Training
- Growth Opportunity - Training Simulation Technologies to Watch
- Growth Opportunity - Ground Forces will Become a Major Market for Simulation in Training After the COVID-19 Pandemic
- Growth Opportunity - Computer Gaming Industry
- Computer Gaming Industry - Changing Supply Chains
- Training in Simulation - Growth Imperatives
- List of Exhibits
- Legal Disclaimer
4. Appendix - COVID-19 Growth Pipeline Diagnostic™
- Take the COVID-19 Growth Pipeline Diagnostic™