2017航空航天及防务趋势（英文版）_12页

2017 Aerospace and Defense Trends Summary

Core Content

This document outlines key trends in the aerospace and defense (A&D) industry in 2017, focusing on the evolving role of defense contractors in a globalized and multipolar world. It emphasizes the need for contractors to adapt to new markets and develop long-term, localized strategies to remain competitive.

Main Points

• Military Budget Constraints: Traditional defense markets, such as the U.S., France, and the U.K., are experiencing budget cuts, prompting defense contractors to seek new opportunities in emerging markets like Saudi Arabia, India, South Korea, and Japan.
• Shift in Customer Base: Defense companies are no longer solely reliant on NATO allies and are now engaging with countries that are making independent decisions on military procurement.
• Need for Closer Relationships: Contractors must build stronger, more personalized relationships with each country, understanding its unique political, economic, and military context.
• Industrial Cooperation: Governments in developing countries are seeking broader and more extensive industrial cooperation, including technology transfer, local sourcing, and training, to build their own defense capabilities.
• Strategic Shift for Contractors: The traditional export model is giving way to a more collaborative and localized approach, where contractors must invest in the local economy and workforce before securing contracts.
• Challenges and Opportunities: Contractors face the challenge of adapting to new markets but also have opportunities to reduce costs, improve competitiveness, and influence the spread of defense capabilities globally.

Key Information

Emerging Markets

• Saudi Arabia: Defense budget of $73.7 billion in 2014, with a 54% growth rate from 2010–2014.
• India: Defense budget of $50 billion in 2014, with a 1.7% growth rate.
• South Korea: Defense budget of $33.1 billion in 2014, with a 1.1% growth rate.
• Japan: Defense budget of $59 billion in 2014, with a 0.1% growth rate.
• UAE: Defense budget of $21.9 billion in 2014, with a 23.9% growth rate.

Examples of Joint Ventures

• Boeing & Tata Advanced Systems (India): Co-produce AH-64 Apache helicopter fuselages.
• Northrop Grumman (Saudi Arabia): Design high-end security systems with Saudi engineers and partners.
• Lockheed Martin, Mitsubishi, Sampa Kogyo K.K. (Japan): Joint venture to design combat systems for the Japan Maritime Self-Defense Force (JMSDF).
• BAE Systems (Saudi Arabia): Provide electrical engineering know-how, IT systems, and training.

Six Critical Rules for Success

1. Think Long-term: Investment and partnerships in the local economy are essential before signing contracts.
2. Study history: Understanding a country's political and military history is crucial for effective engagement.
3. Know whom to know: Building relationships with key officials and unofficial influencers is vital for navigating procurement processes.
4. Develop relevant capabilities: Contractors must adapt to local production standards and train local partners.
5. Decide what intellectual property to share and what to develop: Balancing technology transfer with IP protection is a strategic challenge.
6. Control costs: Contractors must be cost-competitive and consider localized procurement and joint ventures to reduce expenses.

Author Information

• Fadi Majdalani: Partner, PwC Middle East.
• Hunter Hohlt & Joseph Martin: Directors and Principals, PwC US.
• Anurag Garg: Director, PwC India.
• Randy Starr: Principal, PwC US, based in Florham Park, N.J.
• Kiyoshi Okamoto: Partner, PwC Japan.
• Hugo Trepant: Partner, PwC Germany.

Conclusion

The document underscores the need for defense contractors to evolve from mere exporters to long-term partners and contributors to local economies. This transformation is essential for navigating the complexities of new markets and ensuring long-term survival and success in the global A&D industry.