Network Centric Warfare Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The network-centric warfare market is expected to register a CAGR of over 4.5% during the forecast period.

Key Highlights

• The global defense sector has witnessed the minimal impact of the COVID-19 pandemic. The global military expenditure reached approximately USD 2 trillion in 2021. Thus, the growing defense budget from several nations and the introduction of advanced technologies in the defense sector are changing the dynamics of the defense sector. According to the International Data Corporation (IDC) artificial intelligence guide, global spending on artificial intelligence, including AI-centric systems, reached USD 118 billion in 2022.
• Network-centric Warfare (NCW) is the combination of emerging tactics, techniques, and procedures used by the networked forces to create a decisive warfighting advantage. It generates increased combat power by networking sensors, shooters, and decision-makers to achieve shared awareness, a high tempo of operations, increased speed of command, greater lethality, a degree of self-synchronization, and raised survivability. It provides an enhanced shared awareness of the situation and enables more rapid and effective decision-making. Furthermore, the Russia-Ukraine war leads to rising demand for network-centric solutions from European countries due to increasing insecurity and threat to NATO countries from Russia.
• Major countries are highly investing in next-generation technologies to transform their defense capabilities. The growing adoption of advanced technologies such as artificial intelligence, virtual reality, and augmented reality leads to improved situational awareness and real-time decision-making. Furthermore, AI in defense provides various advantages, such as target recognition, strategic decision-making, threat monitoring, combat simulation, and cybersecurity.

Network Centric Warfare Market Trends

The Intelligence, Surveillance, and Reconnaissance (ISR) is Projected to Show Remarkable Growth During the Forecast Period

The ISR segment will showcase significant growth during the forecast period owing to the rising defense expenditure and growing use of network-centric solutions. The rising defense budget, increasing spending on the development of advanced network solutions, and introduction of next-generation technologies for enhanced decision-making are driving the growth of the market.

Global defense agencies recognize that real-time information is vital to mission effectiveness in combat operations. An intelligent network provides the foundation to integrate military intelligence, surveillance, weapon and IT systems, reconnaissance, and command and control operations. In 2022, the United States Department of Defense (DoD) allocated USD 24.1 billion for the Military Intelligence Program. The United States DoD focused on enhancing ISR capabilities by modernizing platforms, advanced sensors, cyber protection, and tying all the data into a meshed network. The United States DoD allocated USD 8.3 billion to the global Integrated ISR portfolio in FY 2023 budget request. Thus, increasing expenditure on improving military capabilities and the adoption of advanced technologies for real-time data in combat operations is anticipated to drive the growth of the market during the forecast period.

North America Is Anticipated to Dominate the Market During the Forecast Period

North America held the largest market share in 2022 and is expected to continue its domination during the forecast period. The growth is due to the highest defense expenditure from the United States. Increasing expenditure on the adoption of network-centric solutions and growing procurement of AI-enabled devices for defense operations from the United States Department of Defense drive the growth of the market across the region.

The United States Department of Defense (DoD) invested USD 874 million in artificial intelligence (AI)-related technologies in 2022. The United States DoD also focuses on improving efficiencies in command and control, computing, and logistics. In the United States 2023 defense budget request, the DoD requested USD 919 million for the nuclear command, control, and communication (NC3) program. Also, the DoD requested USD 11.2 billion for cyberspace activities that include advanced cybersecurity, cyber research and development, and cyber operations.

For instance, in January 2022, the United States Army signed two contracts with General Dynamics Mission Systems for the Tactical Network-On-the-Move communication systems and other equipment. The first contract was worth USD 74.99 million for support services, and the second included engineering and technical support to integrate On the Move technology worth USD 20.34 million. Thus, growing spending from the United States government for enhancing defense capabilities drives the growth of the market.

Network Centric Warfare Market Competitor Analysis

The network-centric market is consolidated in nature with few players holding significant shares in the market. Some of the prominent players in the market are Northrop Grumman, Thales Group, BAE Systems, Raytheon Technologies Corporation, and Lockheed Martin Corporation.

The introduction of next-generation technologies and the development of AI-enabled defense equipment drive market growth. For instance, in December 2021, Lumen Technologies signed a contract worth USD 23 million with the United States Army Reserve Command networking solutions. Under the contract, the company would provide virtual private network services and remote access solutions to more than 650 United States Army Reserve locations. Thus, the rising use of advanced technologies and growing partnerships of OEMs to develop next-generation network-centric solutions for defense forces will boost market growth during the forecast period.

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