The defence and aerospace industry faces many obstacles in 2024, but also many simultaneous opportunities. LLC Group examines the key trends for 2024 and beyond.
#1 Rise in AI & Digitization
The defence industry faces a constant challenge of adapting to the technological innovations of its adversaries, who may use cyberattacks, drones, or other means to disrupt or damage its operations. To counter these threats, the defence industry needs to upgrade its software, expand its cyber credentials, and adopt new defensive systems and procedures that leverage digital trends.
One of the most important and promising digital trends is artificial intelligence (AI), which is the use of machines and algorithms to perform tasks that normally require human intelligence, such as reasoning, learning, and decision-making. AI is a technology that governments and industry are prioritising for defence purposes, while ensuring its development is safe and responsible. For example, OpenAI, a leading AI research organisation, has recently relaxed its restrictions on the use of Chat-GPT, a powerful AI system that can generate natural language, for military applications.
The impact of AI for defence is expected to be significant, as it can help the defence industry improve its capabilities, efficiency, and security, in various domains. For instance, AI can help front-line users detect and respond to threats, such as cyberattacks, faster and more effectively, by analysing large amounts of data and providing actionable insights. AI can also help integrate and optimise the defence supply chain, which involves the delivery of platforms and parts, by reducing delays and costs, and enhancing security. Moreover, AI can enable the creation and use of digital twins, which are virtual replicas of physical assets or systems, that can monitor and simulate their performance and behaviour, and identify and solve problems or complexities.
AI is widely adopted by the defence and aerospace sector, according to a report by BAE Systems, a global defence and security company. The report states that 86% of defence and aerospace decision makers say their nation has adopted AI for defence applications, and that AI is one of the top three technologies that will shape the future of the sector. Therefore, AI is set to become more mature and advanced in 2024, as the defence industry continues to invest in and innovate with this technology.
#2 Decarbonization & Sustainability
According to recent data, 2023 was the hottest year ever recorded, which has renewed the urgency behind decarbonisation efforts. The defence industry has come under scrutiny for its contribution to carbon emissions, with some suggesting that the sector has been overlooked. However, there have been some major decarbonisation initiatives, such as the establishment of NATO’s Centre of Excellence for Climate Change and the UK’s Sustainable Support Strategy.
The impact of climate change on defence goes beyond the weight of its own contributions. Both the UN and NATO describe climate change as a ‘threat multiplier’, alluding to the destabilising impact climate can have on societies and economies. The defence industry is rising to meet the challenge, with innovations such as new power solutions or increased circularity in manufacturing. For example, the Royal Air Force has recently used sustainable aviation fuel in a fighter aircraft, which is a significant step towards a greener, more sustainable military.
The EU has also signalled its intention for defence supply chains to become more sustainable, alongside developing more localised energy in a drive for logistical resilience 4. This is part of a wider effort to reduce the environmental impact of the defence industry and to promote sustainable practices. The defence industry is also exploring new technologies and approaches to reduce its carbon footprint, such as electric vehicles, renewable energy, and carbon capture and storage.
In addition to the environmental benefits, sustainable practices can also bring economic and strategic advantages to the defence industry. For example, they can reduce costs, enhance operational efficiency, and improve the resilience and reputation of the industry. They can also foster innovation, collaboration, and partnerships with other stakeholders, such as governments, academia, and civil society.
#3 Recruitment Challenges to Continue into 2024
Defence is facing significant challenges when it comes to acquiring talent, skills and retention, from front-line military roles to cyber, quantum and manufacturing. In recent weeks the UK’s Royal Navy has seen significant problems with hiring, at a critical time for the force, with ships being deployed to the Red Sea to counter Houthi Rebels. Last month, the Times reported that Armed forces and defence companies are locked in ‘a war for talent’.
Dwindling forces are due to the lack of recruits for basic training, a lack of digital skills, and the pull of incentives given by neighbouring sectors. The EU and US have recently signalled their plans to try and combat personnel shortages in key areas. The US’ new Defence Industrial Strategy, cites ‘workforce readiness’ as a key strategic focus, with a desire to develop a ‘sufficiently skilled and staffed workforce’. Meanwhile, the European Commission expects skills shortages to increase into the future, with defence urgently requiring skills and talent acquisition, as procurement organisations seek to develop and manage emerging disruptive technologies.
