Defense industry

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The defence industry comprises of research, development, production, and service of military materiel, equipment and facilities which are used in the protection of a nation, an area or of a people from attack. The defence industry primarily focuses on the resistance and prevention of attacks from enemies. However, military equipment that is used for offensive purposes can also be used for defensive purposes as well.

The defence industry is separated into Government and commercial suppliers. It can include:

  • Defense contractors: business organizations or individuals that provide products or services to a military department of a government
  • The Arms industry, which produces guns, ammunition, missiles, military aircraft, and their associated consumables and systems.

It can also include:


The defence industry has been alive since mass production was introduced to the world in the industrial revolution. However, even before this, when bows and arrows were used they were also mass produced so each soldier can be equipped with his bow and arrow. The force that could be innovative and produce this innovation on an industrial scale was deemed a stronger force.

The first example of this began in the American Civil War in 1861 where the north had a distinct advantage over the south as it relied on using the breech-loading rifle against the muskets of the south. This began the transition to industrially produced mechanised weapons such as the Gatling gun.[1]

This industrial innovation in the defence industry was adopted by Prussia in 1866 & 1870-71 in its defeat of Austria and France respectively. By this time the machine gun had begun entering into the militaries. The first example of its effectiveness was in 1899 during the Boer War and in 1905 during the Russo-Japanese War. Despite the Japanese use of machine guns they eventually lost the war. However, Germany were leaders in innovation of weapons and used this innovation nearly defeating the allies in World War I.

It became very clear that to become a forcible army a nation must have defence industry capabilities to allow the large amounts of mechanised weapons to be produced to be used on the battlefield. By the time of World War II, the USA used large scale production of weaponry to help the allies beat Germany as well as the use of atomic weaponry to defeat Japan. This help emphasise the need for such innovation to be able to compete with large forces on many sides.

Military Defence Budget[edit]

Each nation will place a certain percentage of the annual budget of their country to be spent on military defence. This can be large sums of money focused on military defence and can be spent on a variety of equipment.

List of highest military defence budgets:[2]

Country Military Budget ($USD)
USA 577,100,000,000
China 145,000,000,000
Russia 60,400,000,000
Saudi Arabia 56,725,000,000
United Kingdom 51,500,000,000
Japan 41,600,000,000
Germany 40,200,000,000
France 40,000,000,000
India 38,000,000,000
Brazil 34,700,000,000

However, despite the fact that the USA has the highest overall Military Budget, there are other nations who's military budget is much higher when given as a percentage of GDP.

List of highest Military Budget as a percentage of GDP:[3]

Country Defence Budget % GDP
Saudi Arabia 10.4
Israel 5.2
Russia 4.5
United States 3.5
India 2.4
France 2.2
Turkey 2.2
United Kingdom 2.2
China 2.1
Australia 1.8
Germany 1.2
Canada 1.0

National Defence Companies[edit]

Although countries may rely on allied nations' defence industries to supply their military equipment, many countries have national defence companies to self supply the country with military equipment.

List of national defence companies:

Private Military Contractors[edit]

Private Military Contractors are private companies that specialise in the production of military equipment. They can also be classed as aerospace and defence companies. These companies produce military equipment that is majorly specialised in defensive duties.

List of top aerospace and defence military contractors:[4]

Private Military Contractors are not confined to military hardware. They are also private companies dedicated to military defence software. Equipment used for intelligence, surveillance and reconnaisence such as radar and tracking equipment is also contracted to private companies for military use. Companies such as Symantec, McAfee and Trend Micro are used in the production of military defence software and cyber protection.

Defence Industrial Base (DIB)[edit]

The DIB relates to the idea of creating a complete network of research & development, production, manufacturing and delivery of military equipment. Moreover, it is the supervision of weaponry and equipment used for defensive purposes. This can include:[5]

  • combat units
  • non-combat forces (e.g. intelligence,communications,transport)
  • reserve forces
  • provision of military equipment, structures, supplies etc
  • activities for soldiers in the field

The DIB also include military aid to foreign countries, domestic emergencies, education and military hospitals.

The Defence Industrial Base is an initiative mainly taken on by the US but also other countries to ensure an holistic provision of military resources for all the military needs of a country.

Cyber Security Industry[edit]

The cyber security industry is becoming the most important defence industry as cyber attacks are being deemed as one of the greatest risk to defence in the next ten years as cited by the NATO review in 2013.[6] Therefore, high levels of investment has been placed in the cyber security industry to produce new software to protect the ever growing transition to digitally run hardware. For the military industry it is vital that protections are used for systems used for reconnaissance, surveillance and intelligence gathering. However, to protect the cyber world from attacks there are advanced cyber protection strategies used such as content, cloud and wireless security. These can be intertwined to form several secure layers.

Nevertheless, cyber attacks and cyber attackers have become more advanced in their field using techniques such as Dynamic Trojan Horse Network (DTHN) Internet Worm, Zero-Day Attack, and Stealth Bot. As a result, the cyber security industry has had to improved the defence technologies to remove any vulnerability to cyber attacks using systems such as the Security of Information (SIM), Next-Generation Firewalls (NGFWs) and DDoS techniques.

As the threat to Cyber Security grows the demand for cyber protection will rise resulting in the growth of the cyber defence industry. It is expected that the Cyber Security Industry will be dominated by the defence and homeland security agencies that will make up 40% of the industry.[7]

Cyber Security Investment[edit]

As the threat to Cyber Security Industry increases governments have begun to invest and allocate funds to the cyber industry. The US government has allocated $14 billion for cyber security in 2016.[8] Moreover, the UK Government has allocated £860 million for their National Cyber Security Program.[9]

Cyber Industry Players[edit]

As the investment increases the demand from organisations to improve their cyber security systems for these markets increases as well. The major organisations involved in cyber defence are:[10]

The Future of the Defence Industry[edit]

The defence industry is constantly producing innovative technology to improve the power of militaries. However, this innovation is not localised to one particular nation. In fact, many nations are involved in producing new defence technologies to use for their own defence and to trade with other militaries. As this happens, new weaponry is constantly being unveiled and therefore there is a certain amount of excitement and eagerness to see what these new technologies are. Here are some of the new equipment that is being produced by the defence industry around the world:[11]

  • Ground-Launched Small Diameter Bomb (GLSDB) from Sweden
  • M-84AB1 Main Battle Tank (MBT) from Serbia
  • Watchkeeper X Unmanned Aircraft System (UAS) from France
  • F90 Assault Rifle from Australia
  • Skylark I-LEX Mini Unmanned Aircraft System (UAS) from Israel

This list represents the growing market of defence industries rather than being isolated to the USA and Western Europe. Innovation in this field can come from many different areas and as long as a relationship exists between these foreign nations the industries can help each other to lead to advancing technology.

According to McKinsey & Company most people believe there will be a 1-5% increase in defence spending by 2017. A lower majority believe that there will be no change where as a slightly smaller majority believe there may be a 1-5% decrease in spending.[12] This type of information is important to the defence industry as it can determine the amount of investment that will be placed in Research & Development. Lower spending by governments will mean a lower demand for the equipment the defence industry produces.


  1. ^ "Defense Industries - Military History - Oxford Bibliographies - obo". Retrieved 2015-11-03. 
  2. ^ "2015 Defense Budget by Country". Retrieved 2015-10-27. 
  3. ^ "The Biggest Military Budgets As A Percentage Of GDP [Infographic]". Forbes. Retrieved 2015-11-02. 
  4. ^ "Defense Industry - Statistics & Market Data | Statista". Statista. Retrieved 2015-10-27. 
  5. ^ "Sector Futures: Defence industry | Eurofound". Retrieved 2015-11-03. 
  6. ^ "NATO review". 
  7. ^ "CYBER SECURITY FOR THE DEFENCE INDUSTRY | Cyber Security Review". Retrieved 2015-11-02. 
  8. ^ "CYBER SECURITY FOR THE DEFENCE INDUSTRY | Cyber Security Review". Retrieved 2015-11-02. 
  9. ^ "CYBER SECURITY FOR THE DEFENCE INDUSTRY | Cyber Security Review". Retrieved 2015-11-02. 
  10. ^ "Top 20 Cyber Security Companies 2014". MarketWatch. Retrieved 2015-11-03. 
  11. ^ "Defence Industry Projects - Army Technology". Retrieved 2015-11-03. 
  12. ^ "Defense outlook 2017: A global survey of defense-industry executives". Retrieved 2015-11-03.