MMR Statistics

Defense

Global defense industry, valued at USD 526 billion in 2024, is entering a decisive phase where conventional military systems, cyber defense and next-generation technologies converge to reshape global security and industrial capabilities. With North America holding a 45% share driven by the U.S. Department of Defense’s record procurement budgets and modernization of missile defense, Europe advancing collective defense through NATO frameworks and next-gen fighter programs and Asia-Pacific rising as the fastest-growing hub amid territorial tensions and force modernization, the sector is fueled by both enduring geopolitical imperatives and emerging hybrid threats.

Competition is intense across the value chain from prime contractors such as Lockheed Martin, Northrop Grumman, and BAE Systems defining strategic platforms, to missile and radar specialists like Raytheon and MBDA, and electronics innovators navigating supply chain constraints and regulatory complexity.

Pricing dynamics increasingly hinge on combat readiness, interoperability, sustainability of supply chains, and compliance with export controls, positioning hypersonic weapons, AI driven defense systems, and unmanned platforms as premium growth drivers. With global military expenditure up 6.8% YoY in 2023 (SIPRI) and investments accelerating in space based defense, cyber warfare capabilities, and autonomous combat systems, the industry stands at the crossroads of multi-domain operations, defense digitalization, and resilient supply chains. The next decade will not only define the balance of power but also determine which nations and corporations lead in shaping a technology-intensive, secure, and globally competitive defense ecosystem.

Region spending the most on defense
North America
Strongest growth area
Cybersecurity & digital defense
Weapon system in highest demand today
Missile defense shields

Explore the key insight

Missiles & Launch Systems
The global Missiles & Launch market, including both offensive systems and defensive launch platforms was valued at approximately USD 59.9 billion in 2024, expanding at a CAGR of 5.7% over that period. This expansion is driven by heightened defense modernization programs, requirements for precision-target attacks, layered missile-defense architectures, and growing geopolitical tensions that demand sophisticated response capabilities.Regional dynamics are shifting markedly. North America holds the largest share, fueled by robust defense budgets and advanced R&D pipelines, while the Asia-Pacific region is emerging as the fastest-growing frontier, supported by expanding indigenous missile programs and strategic infrastructure upgrades. Tier-1 defense contractors such as Lockheed Martin, Raytheon Technologies, MBDA, and Northrop Grumman drive competition through innovation in hypersonic propulsion, multi-domain launch platforms, and seamless integration across air, land, sea, and space defense systems. Smaller OEMs and regional firms complement with bespoke solutions for emerging defense markets, often focusing on affordability and local manufacturing synergies.Trade policy and political budgeting heavily influence this market’s cost structure and strategic positioning. Governments are prioritizing self-reliant supply chains and vertically integrated defense ecosystems. The U.S. Pentagon’s recent USD 3.5 billion contract for AIM-120 AMRAAM air-to-air missiles underlines the current urgency for inventory replenishment amid geopolitical volatility. Looking ahead to 2025–2035, growth will hinge on expanding hypersonics, counter-drone systems, anti-missile interceptors, and space-launch vehicles. Risks include supply chain vulnerabilities, regulatory delays, and fluctuating defense allocations. Still, opportunities are strong in supporting allied defense collaboration, high-frequency launch readiness, and next-gen offensive and defensive weapon systems, making this one of the most dynamic, high-stakes sectors for strategic investors today.
Targeting Systems
The global Targeting Systems market, encompassing guidance, sensors, fire-control, and data-fusion platforms, was valued at approximately USD 16.8 billion in 2024, at a CAGR 8%. This growth is underpinned by rising global defense budgets, the rapid proliferation of unmanned aerial vehicles (UAVs), the modernization of legacy platforms, and the operational imperative for precision strike capabilities with reduced collateral damage. Increasing adoption of AI, machine learning, and advanced sensor fusion is reshaping the battlefield by enabling first-look, first-shot, first-kill capabilities across multi-domain operations. Regional dynamics highlight North America as the largest market, driven by sustained procurement programs, large-scale military modernization, and entrenched R&D ecosystems that support technologies like advanced EO/IR sensors, targeting pods, and integrated fire-control systems. The competitive landscape is led by Tier-1 defense primes such as Lockheed Martin, RTX (Raytheon Technologies), Northrop Grumman, BAE Systems, and Elbit Systems, all investing heavily in next-generation solutions like AI-enabled automated target recognition, multispectral targeting pods, and open-architecture platforms for interoperability. Specialized players such as Teledyne FLIR, Thales, and Leonardo enhance competition by offering advanced subsystems, while niche firms are gaining traction with modular and cost-effective solutions tailored for UAVs and emerging defense markets.Looking ahead to 2025–2035, the market will be defined by advances in AI/ML-driven sensor fusion, counter-unmanned aircraft systems (C-UAS), quantum sensing for GPS-denied environments, and space-based targeting solutions. Strategic drivers include self-reliant defense supply chains, integration of civilian and military technologies, and collaborative allied procurement. Although risks such as cybersecurity vulnerabilities, supply chain bottlenecks, and high R&D costs remain, the opportunities in precision warfare, autonomous kill-chain enablement, and next-gen counter-stealth targeting systems position this sector as one of the most critical and resilient areas for defense investment globally.

Industry definition

The Defense industry is at the forefront of safeguarding nations, delivering cutting-edge military technologies, cyber defense capabilities, and next-generation weapon systems. From fighter jets, naval vessels, and armored land platforms to missile defense, surveillance networks, and AI-powered intelligence solutions, the sector drives modern warfare innovation. Emerging trends—autonomous defense drones, digital battlefield management, and space-based security platforms—are reshaping strategic operations. With rising defense budgets and investments in cybersecurity, unmanned systems, and resilient communications, the industry remains pivotal to national security, global stability, and technological superiority

Aerospace and Defense