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Emerging Markets Focus on Platform Sustainment to Thrive in the Global Defense Industry

By Brad Curran – Industry Principal, Aerospace & Defense, Frost & Sullivan

The global defense market is a stable $650 billion, and will have a slight growth rate of 1% through 2026. 

Asia-Pacific (APAC), Middle East and North Africa (MENA), and Europe will gain market share as forces and systems are modernized.

The command and control, communications, computers, intelligence, surveillance, and reconnaissance/electronic warfare/information operations (C4ISR/EW/IO) technology segment will retain the largest share of global procurement spending.

By 2026, current defense market leaders in the US and Europe will focus on systems, while nations such as South Korea, Japan, India, Poland, and Turkey will supply the majority of platforms. Countries with advanced defense technology will emphasize speed, range, accuracy, and networking of weapons, leaving more aircraft, ship, and ground vehicle manufacturing to mid-tier nations.

Electric rail and laser weapons and hypersonic missiles will begin to replace current weapons. Defense majors are focusing on missile defense, counter rocket artillery and mortar, counter space, battle management, frequency spectrum dominance, and unmanned air, ground, and sea applications.   

Commercial Off The Shelf (COTS)-based IT networks will be in high demand in the Middle East and Asia. In 2026, the C4ISR/EW/IO segment will continue to be the largest defense segment in the defense procurement market. 

Small ISR aircraft, wheeled armored vehicles, targeting pods, cybersecurity, logistics, maintenance, training, missiles and missile defense, radios, radars, aircraft parts, helicopters, and explosives detection will also be high priority products and services.

By employing COTS standards-based products, mature platforms and good-enough technology designs nations hope to ease integration, enable technology refresh, and lower training requirements. This will help to reduce overall systems costs and speed acquisition.

The top five global defense firms are: Lockheed Martin, Boeing, BAE Systems, Raytheon, and Northrop Grumman.  The defense industry will witness considerable consolidation, and partnering due to manufacturing overcapacity, but this will enable local nation firms to benefit from joint ventures and technology transfers.  The renewed emphasis on national borders and more independent foreign policy will also open up the market for additional border security and collaboration tools in 2017 and beyond.

Mature and proven systems that are moderately priced will gain market share.  Maintenance, spares, logistics, and training services will become essential components of new sales.

Global defense industry participants will continue to face overcapacity and saturated markets. Expect mergers and local partnerships with firms producing dual-use technologies.

Some of the top defense technology trends for 2026 for both established and emerging markets include:

Robotic, miniaturized, embedded piezoelectric (PZT)-based sensors, and wireless technologies will enable autonomous, small form factor, distributed, low power, and networked sensors that will feed targeting data to weapons platforms hundreds of miles away. These difficult-to-detect radars and acoustic, magnetic, and optical sensors will enable long-range, high-speed, accurate, and scalable fires.

Frequency spectrum and cyber-attack tools inherent in combat systems will defend against adversary disruption and exploitation, while simultaneously determining target vulnerabilities and exploiting them.

Hypersonic aircraft and missiles, rail (electric), and laser weapons will begin to replace gunpowder-based guns and missile warheads for distant, high-speed, precise, and line-of-sight targets. High speeds will make defensive coordination and active countermeasures more difficult, while reducing adversary reaction and decision times. These types of weapons will be able to respond quicker to calls for fire support and also lesson the amount of collateral damage in target areas. Missile defense, counter rocket artillery and mortar, counter space, and counter unmanned aerial vehicle (UAV) applications will be developed first.

As stated, current defense market leaders will focus on systems, while nations such as South Korea, Japan, India, Poland, Turkey, and Brazil will supply the majority of platforms. Countries with advanced defense technology will emphasize speed, range, accuracy, and networking of weapons, leaving more aircraft, ship, and ground vehicle manufacturing, and sustainment services to emerging mid-tier nations.

New operational concepts such as laser weapons, dispersed forces-concentrated fires, unmanned vehicle swarms, anti-satellite systems, active defense systems for ships, ground vehicles, and some aircraft, counter rocket-artillery-mortar systems, and electromagnetic spectrum operations that include cyber-attack will force new tactical thinking and technology innovation.