US Defense Research and Development Growth Opportunities

Reduced Budgets Challenge New Product Development

This study provides an overview of the research and development (R&D) budget of the US Department of Defense (DoD) for the period between FY2023 and FY2029. The study outlines the DoD’s budget activities and funding distribution amongst military branches and provides a forecast with spending estimates. It highlights the trends influencing the market and examines the factors driving and restraining growth. The study concludes by identifying short- and long-term growth opportunities for defense research initiatives for market participants and stakeholders to leverage.

The commercial sector's rapid innovation, especially in cybersecurity and artificial intelligence, has led to fast product development, prompting the DoD to partner with companies that deliver mission-ready solutions. To maintain its global military edge, the United States will continue to develop in-house technology and foster industry collaboration through R&D initiatives. The DoD’s reliance on private capital for R&D, combined with the slow disbursement of its funds, often hinders start-ups from scaling their products, making the private market more appealing. This challenge might be aggravated by the uncertainty surrounding future policies from the incoming Trump administration, though an increased defense budget is anticipated.