What’s on the Horizon for Aerospace and Defense?

In 2022, the US had the largest annual defense budget in the world at $766 billion, including mandatory and discretionary spending. The US annual defense budget is larger than the budgets of the next ten countries: China, Russia, India, Saudi Arabia, the UK, Germany, France, South Korea, Japan, and Ukraine.

Moreover, the top five defense companies in the world are headquartered in the US: Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, and Raytheon Technologies. By most accounts, the US will retain its top position in 2023 and 2024.

According to Secretary of Defense Lloyd J. Austin III, the Defense Department’s $842 billion fiscal year 2024 budget request is primarily driven by strategic competition with China.

Accusations have been made recently that China’s reported $300 billion annual defense budget for 2022 was understated and is closer to $700 billion. If true, the higher budget number puts China in a position to challenge the US as the top-ranked defense spender as soon as 2024.

Join us as we explore the landscape of the aerospace and defense industry, including both the trends and challenges that will define the rest of 2024.

Top five military digital technologies

Conventional boots on the ground are no longer the primary way nations wage war. Soldiers are augmented and replaced by autonomous digital weapon systems deployed in space, air, land, and sea. Below is a list of five of the most critical digital technologies applied today in military applications.

1. Artificial Intelligence (AI)

AI transforms the battlefield by providing greater connectivity, lethality, and autonomy. AI in military and defense systems enhances computational reasoning for intelligence, surveillance, and reconnaissance (ISR) missions. Computer vision can be integrated into autonomous weapon systems, which reduces the number of soldier casualties.

2. Advanced Defense Equipment (ADE)

Defense companies can evaluate new military products and enable predictive maintenance with ADE, such as digital twins and machine learning. In addition, they are developing self-organizing military AI systems that collaborate using swarm intelligence (SI), which is the collective behavior of decentralized, self-organizing systems.

3. Robotics and Autonomous Systems (RAS)

RAS is applied to protect military forces, increase situational awareness, reduce physical and cognitive workloads, and facilitate movement in challenging environments. For example, RAS drones enhance situational awareness while robots and autonomous military vehicles clear landmines, conduct search and rescue operations, and dispose of explosive ordnance. For example, US-based Anduril Industries provides unmanned autonomous aerial vehicles for intelligent air support. The company’s advanced drone system, called Ghost, uses edge AI algorithms.

4. Internet of Military Things (IoMT)

Applications of IoMT services connect ships, planes, tanks, drones, soldiers, and operating bases. The coverage enhances situational awareness and response time. Edge computing, AI, and 5G services are complemented by support that smooths data flow across military branches and strengthens the command-and-control structure. 

For example, Espre, a US-based fabless semiconductor company, has developed a commercial physical layer security solution that protects wireless data. Espre brings machine learning and unpredictable physical layer encryption to the battlefield to combat RF and cyber threats. 

The foundational technology is embedded AI for smart threat detection and resource spectrum allocation. IoMT sensing and computing devices worn by soldiers and embedded in their equipment collect static and dynamic biometric data.

5. Cyberwarfare

Cyberwarfare is using cyber-attacks against an enemy state that causes harm and disrupts computer systems. Industry studies and cybersecurity professionals estimate that over 800,000 people experience ransomware attacks, phishing attacks, or data security breaches yearly. Examples include espionage, sabotage, propaganda, manipulation, and economic warfare. 

Specific types of cyberwarfare include:

• Malware attacks
• Ransomware
• Distributed Denial-of-Service (DoS) attacks

Four challenges For the Defense Industry in 2024 

The US DoD’s fiscal 2024 budget request includes $1.8 billion for AI and ML equipment and $1.4 billion for Joint All-Domain Command and Control (JADC2) initiatives, which connect military sensors, shooters, and networks. Examples include Project Convergence for the US Army, Project Overmatch for the Navy and Marine Corps, and the Advanced Battle Management System (ABMS) for the US Air Force and Space Force. Artificial intelligence (AI) and machine learning (ML) are complementary focus areas.

In 2024, military equipment manufacturers will begin to address four issues that use new forms of intelligence to stay ahead of the curve and combat uncertainties within their supply chains. 

1. Lack of Long-Term Visibility

Military supply chains involve countless specialized suppliers, manufacturers, and regulators. With so many moving parts, providing long-term visibility across stakeholders is necessary but extremely difficult. 

2. Industry-Wide Component Shortages

The US Department of Defense has the incentive to map and fully understand its supply chain and the suppliers that support it, but it is facing two issues. The first and most critical is that the DoD does not know who provides parts from suppliers below a certain supplier threshold. 

The second challenge is that suppliers to the Department of Defense may be clustered together in similar geographic regions—for example, semiconductors produced in Taiwan. Should China invade Taiwan, it would be difficult. If not impossible, for US military manufacturers to acquire Taiwanese semiconductors. Recently, China has suggested that it would be ready to invade Taiwan in 2027.

3. Inflation and Economic Uncertainty

Inflation is a major challenge for the defense industry. It raises the cost of raw materials, decreasing the buying power of national defense budgets. Estimates show that if the US economy entered a period of high inflation, the Department of Defense’s budget could decline by over $100 billion over five years. This decrease could have a massive ripple effect throughout the industry, stalling innovation, impacting revenue, and destabilizing supply chains.

4. Shifting the Technological Landscape

The modern battlefield is advancing rapidly. Technologies such as AI are becoming the norm. They accelerate decision-making and pave the way for more automation in aerospace and defense applications. 

One critical challenge for defense companies is balancing risk with innovation. A&D companies should monitor how AI is being used and where it could be incorporated. For example, in the military and defense sector, AI-enabled warfare includes autonomous vehicles and the ability to gather and analyze data across land, air, sea, and space. 

Machine learning and predictive maintenance also play critical roles in identifying when rockets and satellites may need to receive upkeep. These capabilities allow us to identify problems before they arise. 

Intelligence for What’s Next 

Supplyframe helps aerospace and defense manufacturers prepare for anything on the horizon. Our real-time intelligence and next-generation solutions ensure assurance of supply and reduce redesigns to save time and increase profitability.

To learn more, visit our Aerospace and Defense page on Supplyframe.com!