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Combat Readiness Plans Win Over Defence Indigenisation Targets in Select Markets Finds Frost & Sullivan - Among other factors, competition and the dearth of skilled personnel and infrastructure prove impediments to indigenisation efforts - Frost.com
Combat Readiness Plans Win Over Defence Indigenisation Targets in Select Markets Finds Frost & Sullivan

 

PRZOOM - /newswire/ - London, United Kingdom, 2015/07/21 - Among other factors, competition and the dearth of skilled personnel and infrastructure prove impediments to indigenisation efforts - Frost.com.

   
 
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Even though Colombia, Kuwait, Malaysia, Morocco and Singapore have very different perspectives and agendas, they are all expected to sharply increase their defence spending over the next 10 years. Due to the arms race and an increasing threat perception, the effects of the 2008 financial slowdown on defence spending in these transitioning markets are gradually reducing.

New analysis from Frost & Sullivan, Rapidly Evolving Defence Markets, Part 1, forecasts defence spending in Colombia, Kuwait, Malaysia, Morocco and Singapore to increase from 38.73 billion USD in 2015 to 55.51 billion USD in 2025 at a compound annual growth rate of 3.7 percent.

“Unlike leading transitioning economies like India, South Korea, Turkey, the United Arab Emirates and Brazil, the five countries selected for this study are still attempting to develop an industrial base to bolster their local footprint and diminish reliance on foreign equipment,” said Frost & Sullivan Aerospace & Defence Industry Analyst Alix Leboulanger. “Upon a closer look at these countries’ dynamics, it is found that their political intent is stronger than their financial and infrastructure capabilities.”

Several factors are dampening indigenisation plans. The increasingly competitive marketplace has left little room for emerging local players unless they can distinguish themselves appropriately for instance, with price in Colombia and technology in Singapore. Moreover, weak market prospects beyond local demand, along with the absence of small- and medium-sized enterprises, have restricted partnership opportunities and transfer-of-technology ventures with foreign companies.

“Investing in high-end foreign technology is perceived as the way forward to fulfil three objectives: achieving modernisation programmes, consolidating the domestic industrial base, and providing employment to locals,” explained Leboulanger. “This will require efficient and easily-applicable regulations to create an attractive and stable environment for foreign investments and industrial partnerships. The lack of skilled personnel and infrastructure, also need to be addressed.”

While rising regional threats directly impact defence equipment spending and upgrades, military capabilities and fleet size do not necessarily increase. Financial constraints mean that governments will try to reduce armed forces and invest in combat-proven platforms, surplus material and second-hand equipment.

“On account of financial challenges in Malaysia and Morocco as well as high reliance on oil revenues in Kuwait, defence spending remains below anticipated levels,” noted Leboulanger. “As a matter of fact Colombia, Kuwait, Malaysia, Morocco and Singapore are expected to spend 21 percent of their total budget, circa 9.77 billion USD per year, on new equipment.”

Rapidly Evolving Defence Markets, Part 1 is part of the Defence Growth Partnership Service programme. Frost & Sullivan’s related studies include: Global Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance Market Assessment, Global Military Helicopters Market Assessment, Global Military Training and Simulation (T&S) Market Assessment, and Global Military Land Vehicles Open Systems Architecture. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan (frost.com), the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.

Our “Growth Partnership” supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.

The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

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Rapidly Evolving Defence Markets, Part 1 / MAF0-16

 
 
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Combat Readiness Plans Win Over Defence Indigenisation Targets in Select Markets Finds Frost & Sullivan

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