Friday 28 June 2013, Amsterdam
Despite the widespread cuts to global defense budgets in the continued aftermath of the global economic crisis, this new report – The Global Missiles and Missile Defense Systems Market 2013-2023 – reveals that the global missiles and missile defense systems market is expected to grow at a CAGR of 4.6% between 2013 and 2023, ultimately reaching a value of US$29.6 billion. This growth is expected to be driven by internal and external security threats, territorial disputes, and modernization initiatives undertaken by armed forces worldwide.
Demand Drivers & Growth Stimulators
North Korean missile tests and Iran’s nuclear program
The latest nuclear missile tests undertaken by North Korea in 2013 have raised serious concerns among various countries globally, including the US, South Korea, Japan and Australia. The relations between the US and Korea have been tense for a considerable period, and with North Korean missiles now possessing the capabilities to hit Japan, South Korea, and other nearby countries, spending on the missiles sector in the region is expected to rise significantly over the next decade. China’s growing support for North Korea is also being viewed as a cause for concern by many countries.
Another nation considered as posing a significant threat to global peace is Iran, which has been conducting uranium enrichment for its nuclear power program, with some nations concerned that this could be co-opted into nuclear weapons. The country possesses various short, medium and intermediate-range ballistic missiles, and is in the process of developing an intercontinental missile system – the Shabab-6 – the range of which is expected to reach the UK. Further tension has been brought by Russia’s assisting Iran, in an attempt to weaken the US’ global military stronghold.
In addition to its development program, Iran is also engaged in the mass distribution of ballistic missile technology to countries such as North Korea, Sudan, and Congo – all of which have been deemed to be rogue states by the US, and are therefore considered to pose a threat to global security.
These factors have resulted in countries in America, Europe and Asia-Pacific taking measures to ensure their safety from attack. One of these major measures has been the initiation of missile defense systems such as the US’ Aegis BMD System, Ground-Based Mid-Course Defense System, and European PAA.
Modernization Initiatives
One of the main drivers of the market over the next decade is expected to be the increasingly obsolete nature of many missiles. Countries such as the US, Russia, China, the UK, Germany, and countries in South Asia are seeking to replace or upgrade their existing missile technology. Modernization projects include:
- The UK is spending US$5 billion on its Future Local Area Air Defence System (FLAADS-Maritime) program in order to augment its Navy’s Type 23 frigates and future Global Combat Ship’s air defense capabilities.
- China is modernizing its ballistic and cruise missiles, and Taiwan is producing theater ballistic missiles over the next 10 years. China has recently deployed its advanced anti-ship ballistic missiles, namely DF-21 D, which have the capability to attack aircraft carriers from long distances.
Threat Deterrence
A number of countries are planning to increase their nuclear capabilities and missile strike ranges. Countries such as the US, India, Russia, Israel, China, Italy, German, France, Spain, Sweden, and the UK are procuring long-range ICBMs that are capable of hitting targets at distances of up to 6,000 kilometers. South Korea - which was until recently prohibited by an accord with the US to possess missiles with a range exceeding 300 kilometers – is expected to acquire ICBMs with ranges of up to 800 kilometers.
Advanced Technology
In order to increase the capabilities of modern missiles and missile defense systems, the global defense industry is investing significantly in research and development, seeking to enhance the speed, accuracy, and destructive power of missiles. Current innovations include:
- Kinetic kill and Electromagnetic rail gun technology, designed to increase speed with hypersonic missiles
- Technology to facilitate the shooting down of missiles in mid-air with interceptors
- The enhancement of anti-aircraft carrier capabilities
- Increased payload capacity
- Stealth capabilities
Joint Research
The global economic slowdown has precipitated significant defense expenditure cuts worldwide. Consequently, a significant number of countries are establishing joint projects in order to share R&D costs, such as India and Russia’s joint development of a hypersonic missile that can reach speeds of up to Mach 5.26
Key Challenges
Global Defense Budget Cuts
Traditionally, North America and Europe accounted for around 80% of global defense spending. Following the global economic downturn, the US economic crisis, and the European debt crisis however, defense spending as suffered; consequently, the allocation for missiles and missile defense systems is not expected to grow significantly over the next decade.
Technical Flaws & Cost Overruns
In 2009, the US government scrapped the European missile defense system due to technical flaws and significant cost overruns, and replaced it with an entirely new missile defense architecture. This was not an isolated case, with various missile defense programs suffering similar problems, primarily due to the sheer magnitude of resources required for their successful implementation.
Laser-guided Bombs
The recent development of laser-guided bombs (LGBs) is posing a threat to the worldwide missile market. Operating on the same principle as that of a missile, LGBs consist of a computer-control group guidance canards attached to the front of the warhead to provide steering commands, and a wing assembly attached to the aft to provide life. They also have an internal semi-active guidance system that detects laser energy and guides the weapon to a target illuminated by an external laser source.
Countries such as India, Pakistan, the US, Israel, the UK, and some countries in Europe, are increasingly procuring, developing, or upgrading their laser-guided bombs as backup weapons for missiles. Therefore, whilst LGBs are not likely to completely replace missiles, they are expected to reduce missiles’ market share in the coming years.
This report is the result of extensive research covering the global missiles and missile defense systems market. It offers in-depth analysis of:
- Market size and drivers : detailed analysis of the missiles and missile defense systems market during 2013-2023, including highlights of the demand drivers and growth stimulators for missiles and missile defense systems. It also provides a snapshot of the spending patterns and modernization patterns of different global regions.
- Recent developments and industry challenges: insights into technological developments in the missiles and missile defense systems market and a detailed analysis of the changing preferences of naval forces around the world. It also provides trends of the changing industry structure and the challenges faced by industry participants.
- SWOT analysis of the missiles and missile defense systems market : analysis of the industry characteristics by determining the strengths, weaknesses, opportunities, and threats faced by the missiles and missile defense systems industry.
- Global missiles and missile defense systems country analysis : analysis of the key markets in each region, providing an analysis of the top three segments of demand for both missiles and missile defense systems.
- Major programs : details of the top three programs in each segment expected to be executed during the forecast period.
- Competitive landscape and strategic insights : analysis of the competitive landscape of the global missiles and missile defense systems industry. It provides an overview of key missiles and missile defense systems providers, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
