Missile market to grow to $100 billion by 2015; missiles for air defense to account for large share
Iran’s crash program to develop ballistic missiles, to say nothing of its relentless drive to build nuclear weapons, has rekindled an anxious interest in missile defenses; other aerial threats such as cruise missiles and UAVs only add to the drive for better and more sophisticated aerial defenses, offering opportunities for companies and investors
As the Iranian missile threat to Europe increases, Secretary of Defense Donald Rumsfeld has offered to share with NATO members the technology on which the U.S. ballistic missile defense is based. Whether or not the European countries take him up on his offer, one thing is clear: There is a growing interest in missile defense — but not only in ballistic missile defense. The proliferation of cruise missile technology and UAVs has led to growing interest in defense against other aerial threats at the same time that armies around he world are looking to upgrade their air defense system more generally. All this bodes well for missile defense developers and for smart investors. The total missile market is expected to be worth more than $100 billion by 2015 according to a new report by London-based consultancy visiongain. Missiles for land-based AD systems will make up the largest share of this market, accounting for approximately 25 percent of its total value. The study argues that the land-based air defense market is being given new attention as a result of concerns over ballistic missile proliferation and the emergence of new aerial threats such as UAVs and cruise missiles. At the same time there is much activity in the field as land-based air defense is embracing the doctrine of network-centric warfare and continuing to develop new technologies, including lasers and hypersonic missiles, offering significant opportunities for investment.
The surface-to-air missile will retain its dominant position in the missile market, but trends in global defense spending mean the main priorities in the next decade will be the upgrade and service-life extension of existing systems and the refurbishment of surplus equipment. These trends augur well for smaller companies with specific specialties which are likely to benefit from tailor-made contracts, notably in the field of electro optical sensors, fire control systems, and datalinks.
Thomas Newdick, the report’s author, says that “While land-based air defense developments will be typified by upgrades and the acquisition of off-the-shelf equipment, we will nevertheless see major sales of new systems in the Asia-Pacific Rim, driven by air defense restructuring in China and India.” In NATO the situation is less clear-cut, but there are signs that the organization is on the verge of implementing an integrated anti-tactical ballistic missile system, which will generate lucrative new contracts, especially in terms of ensuring interoperability.
A shift in land-based air defense priorities will see increasing emphasis placed on flexible anti-tactical ballistic missile systems capable of both forward deployment and homeland defense. Anti-tactical ballistic missile systems will increasingly become available to new operators, while established short-range air defense systems will become the focus of new interception technologies and will continue to stress mobility and survivability.
