Big defence to keep more than 80% of weapons market through 2033 despite drone surge
Defence giants to maintain grip on weapons market despite drone boom, BCG report finds Complex systems still dominate spending Europe's rearmament drive Defence giants are
Defence giants to maintain grip on weapons market despite drone boom, BCG report finds Complex systems still dominate spending Europe's rearmament drive Defence giants are expected to retain their dominance of the global weapons market over the next decade, according to a new report by BCG and Vertical Research Partners.The report found that established players who produce complex weapons will still account for more than 80 per cent of the market in 2033, even as markets for cheaper mass-produced systems like drones grow at a faster pace.Diana Dimitrova, leader of BCG's UK aerospace and defence practice, said: "Both defence tech companies and established contractors will grow, but the majority of spending will remain with traditional players delivering major platforms and complex systems."Researchers assessed how many complex military capability programmes could realistically be replaced by "affordable mass" alternatives by 2033. Expensive systems comprised about $65 billion of spending in the US, the EU and the UK last year, compared with about $5 billion for affordable mass systems and just $55 million for single-use systems."Affordable mass" refers to large numbers of relatively inexpensive, expendable weapons such as one-way attack drones, loitering munitions and autonomous systems that can overwhelm traditional defences at a fraction of the cost of traditional platforms.
The growing use of these systems in the wars in Ukraine and the Middle East has prompted militaries to rethink procurement, increasing investment in autonomous systems alongside conventional weapons.While the market for larger systems is forecast to grow to an annual spend of $79 billion by 2033, that for smaller defence systems will still only reach $17.5 billion as the newer categories are growing from smaller bases.In Europe, where governments have embarked on a rearmament drive in the face of Russian aggression, BCG separately forecasts that the market for defence equipment will more than double from about €150 billion in 2024 to €380 billion by 2035. Defence technology companies are expected to capture between €50 billion and €80 billion of that market.The forecast assumes Europe achieves its target of spending 3.5 per cent of GDP on defence.Start-ups such as Helsing, Quantum Systems and Anduril Industries have attracted billions in investment, but established primes remain protected by their long-term government relationships and the high barriers to entry in complex weapons production.Some industry leaders have warned that the advance of more nimble tech-focused companies focused on autonomous systems will disrupt the established hierarchy.
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