A recent Frost & Sullivan report on defense markets projects military spending across 10 selected countries to reach $3.41 trillion by 2022 due to military reorganization, increased threat perceptions, penetrable borders and territorial disputes.
The study covers defense budgets in Algeria, Brazil, Chile, India, Indonesia, Japan, Oman, Poland, Russia and the United Arab Emirates, the firm said Wednesday.
Alix Leboulanger, an aerospace and defense research analyst at Frost & Sullivan, identified technology procurement and programs for fleet renewal and modernization as among the factors that drive military expenditures.
Procurement activities are indicated as driven by local employment opportunities, military modernization and a streamlined domestic industrial base.
“These acquisitions explain the close link between procurements and transfers of technology (ToT) in defence, in line with offset policies, as demonstrated in Brazil, India and Poland,” Leboulanger said.
“While most offset policies encourage ToTs across the defence segments, governments are also looking to use these policies to reinforce the local civil industry, as in the case of the UAE.”
The report noted, however, that the pace and volume of growth could be hindered by the financial slowdown, setbacks in modernization and indigenization programs and transitioning markets.