There is a whole new mood around the defence industry.
Perhaps the changes in geopolitics over the past 12-18 months has altered our focus, but in recent weeks industry events around the world have certainly witnessed a mood of change.
I was fortunate to be in Abu Dhabi for the IDEX and NAVDEX event. This co-located show with roots going back 30 years had a new sense of purpose.
It was the biggest ever and show organisers from ADNEC group were thrilled to claim it had taken the top spot for the world’s largest ever defence show.
The numbers were impressive. ADNEC had been hoping for 130,000 visitors but according to the CEO of the exhibitions group, Humaid Matar Al Dhaheri, numbers had surpassed expectations.
According to broadcaster CNBC this was no surprise: “Few things illustrate the health of the arms industry like a massive defence fair,” it said. “It’s no secret as to why. Russia’s full-scale invasion of Ukraine one year ago jolted much of the industrialised world out of its comfortable status quo, in which a Western-led security order prevented major military invasions that Western powers did not want.”
Strength in numbers
But it is about far more than that.
Russia’s invasion may be the catalyst that has spooked Europe and the USA, but elsewhere other nations are looking carefully at how exposed they are – and how can they build on their defence and security collaboratively. Strength is in numbers.
Later in the month the industry caravan moved to Australia for the aerospace and defence show at Avalon, just outside Melbourne.
Regular topics at this show focused on the Australians building a more robust defence force –and a more capable defence industry. For Canberra the Russian expansionism was a symptom while an increasingly aggressive China could be a greater headache.
Talk at the show was that the resurrection of a cancelled uncrewed air vehicle deal between Australia and General Atomics could be back on the table.
Meanwhile the Australian government spoke highly of a deal for Boeing AH-64E attack helicopters that will include Australian suppliers while Lockheed Martin announced a plan to expand Australia’s ability to produce advanced precision weaponry.
The importance of sharing production and development cannot be underestimated.
Back in Abu Dhabi, the major OEMs were lining up to sign collaborative deals with the host country, as well as extending focused talks with teams from the Kingdom of Saudi Arabia whose Vision 2030 has set the scene for 50% of the kingdom’s defence spending to be within its own borders.
Many European nations have now committed to meeting or exceeding their NATO targets — “in some cases, years before they originally planned to do so,” reported by McKinsey & Co. They went on to say the crisis prompted “a review of long-standing assumptions that large-scale conflict on the continent was unlikely in the 21st century.”
The UAE is already well advanced in its plans to grow as a provider of sophisticated defence equipment and not just a receiver.
Like Saudi Arabia, the emirates have been a target for planned aerial attacks from Iranian-sponsored rebels in Yemen. Necessity being the mother of invention has seen the Emiratis and their partners develop a wealth of anti-drone and other technology that is now being sought further afield.
It is a sign of the changing times that one of the larger national pavilions at the IDEX show came from Israel, where Israeli defence companies celebrated establishing a formal presence in the Gulf and signing partnership agreements to share technologies.
The UAE defence manufacturing efforts are being centralised under the corporate umbrella of the Edge Group. Its growth since the it made its debut at the 2019 Dubai has been meteoric.
And when it comes to product development it certainly seems to be working, judging from the number of new ambitious projects the company launched at the show.
Split into three focus areas: precision-guided munitions, autonomous systems, and electronic warfare, all with their own management teams, CEO Mansour AlMulla is expecting big things: “Targeting the export markets is one of our priorities,” he told me. “We have come a long way since 2021, when we topped AED 1.1 billion ($299m) worth of sales contracts. Last year we achieved AED 5.2 billion – a 500% increase – and hope to come close to that this year.”
Global companies also sent clear messages if intent. Raytheon announced plans to carry out final assembly of the Coyote counter UAS interceptor in the UAE. Managing director of Raytheon Emirates Fahad Al Mheiri shared hopes that this first assembly line outside the USA will allow something that is now available only via the US foreign military sales (FMS) process to become available via direct commercial sales – “selling globally to the world”.
He believes that the first Emirati-assembled Coyote will be delivered in a little over two years. But, before that, Emirati-built components for the Coyote interceptor will feed into Raytheon’s US production line.
The UAE’s defence minister, Mohammed bin Ahmad Al Bowardi speaking at the international defence conference said the arrival of advanced technologies such as artificial intelligence (AI), augmented reality and virtual reality – prevalent at the show – bring new questions to countries seeking to exploit them.
“We must adapt to the new reality we are witnessing and explore the nature of these challenges to find the proper ways to use technology to manage this transformation,” he said, and cautioned that enhanced security is “not achieved by technology alone”, with an integrated international system based on strong collaboration between states an essential part of the answer.
“The UAE believes in the necessity of collaboration between global and regional powers to enhance security,” he said.
It is clear now that there is a real appetite to see production and development move around the globe as nations increase their collaboration and work towards more integrated equipment to enable allies to truly be effective.
From Australia through to Arabia there is a shift. Defence is firmly back at the top of the agenda.
Budgets are being increased around the world as manufacturers are racing to meet demand. In January the US said military equipment sales to foreign countries shot up 49% to $205.6 billion in the last fiscal year.
Now, there must be a change in governments approach to arms sales. The French government for example has outlined measures including simplifying military contracts and administrative procedure a move that others must surely copy.
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