From Domestic Demand Fulfilment to Military Export Targets
- Defence Indigenisation a Priority for Angola, Azerbaijan, Peru, Qatar and South Korea, Finds Frost & Sullivan
LONDON, Aug. 20, 2015 /PRNewswire/ -- Even though Angola, Azerbaijan, Peru, Qatar and South Korea have very different perspectives and agendas, they are all expected to sharply increase their defence spending over the next 10 years. Due to the arms race and an increasing threat perception, the effects of the 2008 financial slowdown on these transitioning markets are gradually reducing.
Logo - http://photos.prnewswire.com/prnh/20150819/259563LOGO
New analysis from Frost & Sullivan, Rapidly Evolving Defence Markets, Part 2 (http://www.frost.com/maf1), forecasts the combined defence spending of these five nations to increase from $53.68 billion in 2015 to $70.57 billion in 2025 at a compound annual growth rate of 2.8 percent.
For complimentary access to more information on this research, please visit:
http://owl.li/R58MT
"Unlike leading transitioning economies like India, Turkey and Brazil, the countries selected for this study are still attempting to develop an industrial base to bolster their local footprint and diminish reliance on foreign equipment," said Frost & Sullivan Aerospace & Defence Industry Analyst Alix Leboulanger. "Upon a closer look at these countries' dynamics, it is found that for most of them, their political intent is stronger than their financial and infrastructure capabilities."
Other factors that can prove dampeners include the highly competitive nature of the global defence marketplace. It has left little room for emerging local players unless they can distinguish themselves appropriately; for instance, on pricing in Peru and on technology in South Korea. Moreover, weak market prospects beyond local demand, coupled with the absence of small- and medium-sized enterprises, restrict partnership opportunities and transfer-of-technology ventures with foreign companies.
"Most of the countries under study rely on foreign technology but have plans to create and/or enhance the domestic industrial base, provide employment to locals, and most importantly, reduce the local economy's dependence on energy revenues," noted Leboulanger. "For success with these strategies, efficient and easily-applicable regulations are required to create an attractive and stable environment for foreign investments and industrial partnerships. The lack of skilled personnel and infrastructure, which has impeded ambitious indigenisation plans and delayed modernisation programmes, also needs to be addressed."
While rising regional threats positively impact defence equipment spending and upgrades, military capabilities and fleet size do not necessarily increase. Financial constraints mean that governments will try to reduce armed forces and invest in combat-proven platforms, surplus material, and second-hand equipment. Thus, Angola, Azerbaijan, Peru, Qatar and South Korea are expected to spend no more than 30 percent of their total budget, circa $18.95 billion per year, on new equipment.
Rapidly Evolving Defence Markets, Part 2 is part of the Defence (http://ww2.frost.com/research/industry/aerospace-defense/) Growth Partnership Service programme. Frost & Sullivan's related studies include: Rapidly Evolving Defence Markets, Part 1, Global Military Fixed Wing Market Assessment, Global Military Avionics Market Assessment, 2015 Global Defence Outlook, US DoD 2016 Budget Assessment, DoD Training and Simulation Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
Contact Us: Start the discussion
Subscribe: Newsletter on "the next big thing"
Register: Gain access to visionary innovation
Rapidly Evolving Defence Markets, Part 2
MAF1-16
Contact:
Edyta Grabowska
Corporate Communications – Europe
P: +48 22 481 62 03
E: [email protected]
Share this article