NATO C4ISR Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The NATO C4ISR Market is expected to exhibit a growth rate of more than 3% during the forecast period.

Key Highlights

• The guidance for the NATO countries to spend a minimum of 2% of national GDP on defense expenditure for member nations is a major factor that drives investments into development and procurement of command, control, communications, computer, intelligence, surveillance, and reconnaissance (C4ISR) equipment in the NATO countries.
• The growth in terrorism, border clashes, geopolitical tensions in regions like Middle-East and subsequent deployment of troops and defense assets in combat affected zones is expected to increase the demand for C4ISR systems.
• The rise in unconventional and asymmetric warfare is leading to growth in demand for ISR systems in countries such as the United States, France, Turkey, etc. The increasing use of unmanned air vehicles (UAVs), unmanned sea vehicles (USVs), and land-based electronic warfare assets is propelling the growth of C4ISR market to enhance the situational awareness capability of NATO armed forces.
• The use of advance technology such as machine learning and artificial intelligence (AI) into C4ISR systems to enhance the efficiency of the systems is expected to bolster the growth of C4ISR market in the coming years.

Key Market Trends

Air Segment To Exhibit a Significant Growth Rate During The Forecast Period

Majority of the NATO countries like the United States, Poland, the United Kingdom and Turkey among others are significantly increasing their defense spending toward the development of air superiority of their respective air forces. These plans include the procurement of advanced aircraft as well as C4ISR equipment with threat detection, tracking and attacking capabilities. Currently, the Netherlands exploring the options to replace ageing Dornier 228 aircraft with modern maritime patrol aircraft under the Netherlands Coastguard Air Reconnaissance Capacity Tender. Similarly, in June 2020, Airbus was selected to integrate and install Captor-E, the modern electronically scanned array radar onboard Eurofighter aircraft currently in service of German and Spanish armed forces. The contract is scheduled to be completed by 2023. Such robust plans to modernise the existing fleet with advanced equipment to enhance their ISR and target detection capabilities are expected to drive the growth of the segment during the forecast.

United States Holds Major Share in 2019

United States has the largest military expenditure in the world with annual military spending of USD 732 billion in 2019. Development programs such as AEGIS system, Littoral Combat Ship, Joint Surveillance Target Attack Radar System of the Navy and Air Force are expected to propel the demand for C4ISR systems in the United States. According to a government of the United States, there is a significant gap between modern threats and the technology of C4SIR equipment currently in service. Therefore, the government announced a plan to focus investments into modification, revamp and upgradation of C4ISR systems to address the threats such as electronic warfare, cyberattacks, and missile strikes among others. In December 2019, the Marine Corps approved the initial procurement of the TOCNET-G4 Intercom System (G4 ICS) for the family of Light Armored Vehicles (LAVs), which will enhance the efficiency of communication systems and situational awareness of the vehicles on the battlefield. The country is also in plans to develop advanced C4ISR solutions integrated with artificial intelligence and machine learning technologies. In 2019, the US DoD launched its artificial intelligence strategy, which focuses on integration and adoption of AI capabilities across Army, Navy, Marine Corps and Air Force. Such investments are anticipated to accelerate the growth of the market.

Competitive Landscape

The NATO C4ISR Market is fragmented with many players supporting the armed forces of NATO countries. Some of the prominent players in the market are Lockheed Martin Corporation, BAE Systems plc, L3Harris Technologies Inc., Leidos Inc., and Thales Group. The growing investments by the companies and governments into the development of new and advanced radars, communication, EO/IR sensor solutions etc. Also, some of the NATO countries are developing their local manufacturing capabilities. Aselsan is one of the major electronics providers in Turkey that has been providing tactical communications, radars and other C4ISR solutions to the Turkish armed forces. In May 2020, Aselsan delivered over 1,300 software-defined radios to the Turkish armed forces to cater to the electronic warfare requirements of land, sea, and air platforms. With the growth of the product portfolio, the regional players can increase their share in the market and enhance their footprint into Europe and North America regions.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support