Aerospace, defense, and government services companies around the world face rapidly changing and challenging environments. Government regulations and procurement systems are becoming increasingly complex, defense budgets are shrinking, private and government disputes are more common than ever and innovative technologies are changing the landscape.
Here are some suggestions for navigating the ever-changing A&D industry:
Industry-Specific Globalization: Develop a high degree of geopolitical expertise and sophisticated skill sets to effectively play in the global arena. The challenge of developing global markets for A&D companies is closely aligned to country-specific governmental, policy, and cultural considerations.
Next-Generation Technology: At the macro level, there has been a gradual shift in defense spending patterns. In response to asymmetric terrorist threats, the emphasis appears to have shifted to high-tech intelligence equipment, replacing demand for conventional big guns and heavy armor. The major industry players have, in response, resorted to bolt-on acquisitions to plug gaps in their product offerings. A focus on R&D is also helping these companies to develop next generation technologies essential in a climate of fewer programs and reduced budgets.
Some key facts to consider:
The National Defense Authorization of 2015 set defense spending in the U.S. at $585 billion dollars for fiscal year 2015, $30 billion less than fiscal year 2013 per a Deloitte report. That drop in defense spending began long before 2013.
Between 2010 and 2015, there was an 18 percent decline in overall federal contract spending, from $540.1 billion to $437.2 billion.
In fiscal 2014, U.S. military sales to its allies stood at $34.2 billion, according to the Defense Security Cooperation Agency. This marked a slight uptick from approximately $30 billion in sales in fiscal 2013.
A number of items have been recently moved from the heavily regulated U.S. Munitions list to a less regulated category, opening up the door for international export.
Our global team specializes in developing international sales channels for companies within the defense and aerospace industry. If you are interested in finding out how we can help you to expand into new markets please call us at 843-640-5184 or email us at email@example.com