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ANNUAL REVIEW 2013 — ENHANCING GLOBAL COMPETITIVENESS — MARKETS & PERSPECTIVES
Trends in defence, space and helicopters
DEFENCE BUDGETS UNDER PRESSURE
IN THE US AND EUROPE
The need to consolidate public nances has weighed on
government budgets, particularly in the US and Europe.
According to the Stockholm International Peace Research
Institute (SIPRI) in its April 2014 release, world military
expenditure fell 1.9% in real terms to US$ 1,747 billion in 2013.
According to SIPRI, military spending in the US fell 7.8% in real
terms to $ 640 billion in 2013, while Western and Central
European spending fell 2.4% to $ 312 billion. By contrast, military
spending rose by 4.7% in East Asia ($ 282 billion), by 4% in the
Middle East ($ 150 billion) and by 5.3% in Eastern Europe
($ 98.5billion).
A McKinsey study “The Future of European Defence” points to
the dilemma facing European governments, with a need to
commit more resources to their collective defence and strait-
jacketed nances. Europe’s increasing reliance on the US has
led to strains within the NATO alliance. Currently, US spending
represents 72% of the NATO defence total, up from 63% in 2001.
According to the McKinsey report, the situation in Europe is
further complicated by structural inefciencies: Europe deploys
six times as many different weapon systems as the US while
spending only 40% of the budget. According to the report, the
potential savings that could have been achieved through sharing
and cooperation in 2012 are close to € 13 billion.
In December 2013, European Heads of State met to discuss a
Common Security and Defence Policy. In a statement following
the meeting, the European Defence Agency promised to push
forward with four key programmes: remotely piloted aircraft
systems, air-to-air refuelling, satellite communications and cyber.
Cybersecurity continues to grow in importance. According to the
report “The Global Cybersecurity Market 2013-2023” published in
July 2013 by Security Defence Intelligence, North America is
expected to spend US$ 93.6 billion on cyber security over the
forecast period, making it by far the largest spender in the domain.
OUTLOOK FOR THE SPACE INDUSTRY
According to the Space Foundation’s “Space Report 2013”,
the global space economy grew by nearly 7% in 2012, reaching
a new record of US$ 304.31 billion. The report states that the
commercial sector accounts for most of the growth, constituting
nearly three-quarters of the space economy, with government
spending making up the rest.
Dubai Air Show 2013
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