economy
Defence giants to maintain grip on weapons market despite drone boom
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TL;DR
- Complex weapons from established contractors will account for over 80% of the defence market by 2033.
- Faster growth in cheaper mass-produced systems like drones is not expected to displace traditional players' dominance.
- Expensive systems currently make up the vast majority of defence spending compared to affordable mass or single-use systems.
- The European defence equipment market is forecast to more than double by 2035, with defence tech players expected to secure a portion of this growth.
- Profits from complex systems are more sustainable due to ongoing needs for maintenance, spare parts, and upgrades.
- Established contractors benefit from long-term government relationships, offering protection during peacetime.
- Prime contractors need to adapt and decide whether to invest in existing profitable programs or seek exposure to higher-growth segments, potentially through acquisitions.