Strategic Intelligence - Drones in Aerospace and Defense

"Drones in Aerospace and Defense" is part of the analyst's Strategic Intelligence series of reports on unmanned technologies and its impacts across different industries. UAVs are making a mark in modern warfare, and their use can have severe strategic and financial consequences. To overcome developmental hurdles, companies, nations, and militaries are increasingly adopting a collaborative approach. This approach involves public and private investment in the sector and constant experimentation in Ukraine.

This report explores emergent trends within the UAV market, examining use cases and the implementation of emerging technologies such as artificial intelligence and remote sensors, and what challenges must be considered in pursuing effective strategies for brand building in this market.

Unmanned aerial vehicles (UAVs)-colloquially known as ‘drones’-have been a much-used part of advanced militaries’ arsenals for many decades. From the RQ-2 Pioneer used in 1991 during Operation Desert Storm to the MQ-9 Reaper used against Venezuela, the US, in particular, has led the way in the development and utilization of unmanned capabilities. This has been due in part to the high financial threshold for R&D and subsequent export controls on US platforms. However, following Russia’s full-scale invasion of Ukraine, other producers are beginning to develop viable, affordable platforms, subsequently increasing the horizontal proliferation of unmanned capabilities. The growth of drone technology in the wider consumer and commercial markets has further altered the cost calculus of drone operations, facilitating the development of novel concepts and programs focusing on the potential benefits provided by relatively low-cost, ‘attritable’ UAV platforms. Drone proliferation predates the current conflict, but Russia’s war in Ukraine has driven an unprecedented demand for unmanned systems. In 2023, an estimated 10,000 drones were launched per month in the war; by 2025, that number had surged to roughly 10,000 launches per day. The analyst estimates that the global military UAV market will expand from a value of $15.1 billion in 2025 to $27.9 billion in 2035, growing with a CAGR of 6.3%. This dramatic increase in both the unit numbers and value of drones has not changed the fundamental strategic logic of war, which still hinges on territorial control, manpower, morale, and logistics. However, drones are having a major tactical impact on the battlefield: unmanned systems now account for more than 75% of all combat deaths.

Key Highlights

• Studies of emerging technological trends and their broader impact on the defense market.
• Analysis of the various unmanned aerial vehicle programs and projects currently under development, as well as the impact of emerging technologies such as artificial intelligence on the future outlook of the unmanned aerial vehicles theme.

Report Scope

• The key defense challenges that forces and defense sector suppliers face are covered.
• The investment opportunities for armed forces, suppliers, and institutional investors, across the whole unmanned aerial vehicles value chain are covered.
• Highlights from the range different unmanned aerial vehicles related research and development programs currently being undertaken by various military organizations and defense companies.

Reasons to Buy

• Determine potential investment companies based on trend analysis and market projections.
• Gaining an understanding of the market challenges and opportunities surrounding the unmanned aerial vehicles theme.
• Understanding how spending on unmanned aerial vehicles and related segments will fit into the overall market and which spending areas are being prioritized.