The defence industry is experiencing a surge in growth as global military expenditure continues to rise. With conflicts such as Russia’s war in Ukraine and ongoing tensions in Gaza, defence budgets are increasing to address the growing threats. Over the past five years, global military expenditure has seen a 34% increase, leading to significant new orders for the five prime defence contractors in the US.
This boom in defence spending coincides with another technological revolution: artificial intelligence (AI). As AI becomes more prevalent, there is a need for affordable and abundant weapons systems that can effectively utilize this technology. This presents numerous opportunities for start-ups and defence unicorns.
Investing in these start-ups is crucial to develop new capabilities that can compete in an ever-changing world. Lessons from conflicts like Ukraine’s conflict with Russia provide valuable insights for military decision-makers and procurement specialists. One important lesson is that investment should not simply reload stockpiles but retool them and the defence industry itself. More funding should be allocated towards research and development to explore alternatives like long-range autonomous drone units.
Another lesson learned from Ukraine’s conflict is the importance of effective communication systems, especially when operating amid electronic warfare challenges. Traditional navigation systems can become compromised, leaving missions incomplete and forces vulnerable. Therefore, it is essential to invest in weapons and systems that can function reliably even when conventional methods fail.
Asymmetric warfare also highlights disparities between cost and capability ratios over time. It becomes unsustainable when expensive missiles are used against low-cost drones or other threats. To combat this issue, cheaper alternatives that leverage interconnected software are needed. However, this requires procurement reform that considers factors beyond price contracts.
While there are concerns about rising debt repayment costs crowding out opportunities for modernization within defence budgets, it is likely that spending will continue to grow globally. The US has proposed returning its defense spending levels close to 5% of GDP – levels not seen since 2009 during surges in Afghanistan and Iraq operations.
Innovation plays a crucial role as countries worldwide recognize its importance by increasing funding for initiatives like Nato’s Diana Innovation Fund which supports AI technologies across Western nations’ militaries.
it is vital to think strategically about objectives rather than relying solely on existing weapons systems from past wars. The age of AI demands innovation – inventing, adapting, and adopting AI-powered weaponry will be key moving forward.
