A new paper by Deloitte reviews global trends in the Aerospace and Defence sectors and looks at the technology development that will shape the evolution and growth of A&D over the next decade.
As global tensions mount and regional conflicts continue, governments around the world continue to invest heavily in maintaining and enhancing their military and defence capabilities. In the US, defence spending is forecast to grow 3% – 4% in 2020 to reach an estimated $1.9 trillion. In Asia, the major regional powers are also investing heavily to modernise their defence technologies, while continued tensions and conflicts in the Middle East add to global demand for military hardware. In Europe, pressure from the US on NATO governments to fulfil their defence spending responsibilities is also contributing to strong growth in the defence sector.
The commercial aerospace sector suffered a turbulent 2019 and has felt the full effects of safety concerns resulting in large-scale order cancellations for Boeing, while new orders have also dropped off. Yet Deloitte expects the market to bounce back strongly as the regional jet market looks set to experience strong growth, driven by increased demand from Latin America, the Middle East and the Asia-Pacific regions. Manufacturers are focussed on designing and building the next generation of highly automated and highly fuel-efficient models, although they are battling temporary headwinds in the form of production bottlenecks at downstream component suppliers.
New investment in space technologies continues to flow, both from national governments and the private sector. Commercial communications satellites are the primary driver of revenue in this sector, while observational satellites are increasingly occupying payload space in launch vehicles. In parallel with commercially proven technologies, investors are continually asked to support a wide range of new concepts which require longer-term R&D funding and support. And in some emerging niches there is significant crossover between commercial and military technologies, which means that funding to enhance and improve the operational resilience of orbiting and ground-based assets seems likely to deliver benefits across the board.
The future of the Aerospace and Defence industries are shaped by ongoing investment in R&D, and the next phase of technological development looks set to include some very exciting advances.
Increased awareness around the dangers presented by the climate emergency has created a tight focus on improving the fuel efficiency of aircraft, but any gains have been offset by ongoing growth in air travel which continues to enlarge its carbon footprint. So the new objective is a viable electric propulsion aircraft, and some of the industry’s major players have already made significant breakthroughs in this area. The second potentially high-growth area is in Urban Air Mobility (UAM), which will potentially see passengers taking local journeys via pilotless transport drones.
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