Priorities in global defense budgets shift

world in which militant and non-state groups, operating from failed or collapsing nations like Somalia, would pose the greatest danger, from terrorism to acts of piracy.

When it comes to using military force, he said, “its purpose will be to prevent or preempt instability or to restore stability. Stabilization operations will therefore be our most likely and most demanding task.”

Without specifying programs, Dannatt went on to suggest that some of Britain’s planned defense spending, including on aircraft carriers, nuclear submarines and the costly Eurofighter Typhoon jet, was misplaced.

His view chimes with that of U.S. defense secretary Robert Gates. In his 2010 budget plan, Gates proposed ending production of Lockheed Martin’s F-22 fighter, trimming missile defense spending, canceling other major weapons programs and spending more on material needed to fight insurgencies.

Our conventional modernization goals should be tied to the actual and prospective capabilities of known future … adversaries, not by what might be technologically feasible,” he said, calling for an overhaul of future combat systems.

Gates’s budget would see a further $2 billion allocated to intelligence, surveillance and reconnaissance programs, such as the unmanned Predator drones now operating over Pakistan. Predators are now an essential asset in the Pakistan border region, and are likely to be a major future defense priority, along with similar surveillance-and-attack technology.

In total, defense research firm Teal Group sees $55 billion of spending on unmanned aerial vehicles in the next 10 years.

This is not to say spending on conventional weapons is over, it is just likely to be far more rigorously controlled.

The United States, China, Russia, Britain and France, five of the biggest defense spenders, will continue to pump money into major programs for transport and attack aircraft, warships and armor to support troops on the ground, providing steady business for major state-linked defense corporations.

Most of those nations will also be looking to cut costs around the margins, while investing more carefully and more heavily in the surveillance, anti-terrorism and cyber-defense technologies that will give them an edge in the future.

Baker writes that dome defense firms, such as General Dynamics, are already focusing their attention on those expanding niches and that trend is likely to continue, defense experts say. With budgets tight, however, and security threats changing, nimble and far-sighted corporations with a specialist technology are likely to gain most, while largest companies consolidate. “It’s all going to put pressure on the defense industry for further rationalization and restructuring,” said Nicoll. But ultimately, he said, “it might also produce better value for money for taxpayers when it comes to major defense spending.”