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The Military & Defence Industry And Its Growth


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Militaries are defined by the quality of their soldiers as well as their equipment. Although a skilled soldier is the most important thing, equipment also matters. A well-equipped soldier can easily outperform any enemy. Due to this reason, militaries throughout history have focused on providing the best equipment and support.

Ever since militaries have existed, so has the need for weapons. In the past, the town blacksmith used to produce weapons. However, in this period of time, it has developed into an industry. With the advancement in technology, military equipment has also been upgraded. This along with the growing race of power between countries has led to a demand for newer and better military equipment. Thus, ultimately leading to the creation of an industry for weaponry and equipment.

The Defence Industry

Simply put, the defense industry has one main job. That is the development and manufacturing of products that can help protect the country. Any country’s defense industry works hand in hand with its ministry of defense. This is because the military is the prime consumer of defense products. Therefore both the army and defense industry work together to manufacture products that fit the military’s needs.


Humans have been fashioning weapons since the earliest of times. Incendiary weapons were underuse as far back as the 4th century B.C by the Greeks. By the 14th century, gunpowder was being used in cannons to fire large pieces of rock towards enemies. Later on, mortars and guns were developed as well.

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However, the defense industry period flourished and grew during the world wars. The use of airplanes, jeeps, tanks and battleships shaped the industry into what we know it today. Their usage incentivized private firms to produce these goods for military use as well. Thus, laying the foundation for today’s defense industry.


21st Century

Although the post-world war period had high tensions, there was no massive change in the defense industry. Unfortunately, the 21st century came with a horrific event. The terrorist activity on 9th September 2001(9/11) changed everything. This attack instigated rapid changes and developments in the military tech industry. This change and the war on terrorism by different countries led to rapid growth in the defense industry.


The defense industry is not just limited to guns and bombs. In this era, they produce everything from fighter jets to army-approved eyewear. The Defence Industry is always under pressure to develop and design new products. The race to be the Number 1 between countries has led to competition between their military assets as well. This has encouraged private firms such as Northrop Grumman and Airscan to further invest in the defense industry.


Another reason why private firms are heavily interested in this industry is because of the immense profit. For example, The US hires military contractors and then pays them for developing the product and later on buys the product from them. This means that the contractor does not have to invest in the development phase of the product. Therefore it can save development costs and earn immense profits on the end product.

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Economic Influence

Governments support the defense industry as well. They not only enable competition between private firms but also have a major economic impact. Firms that are part of the defense industry employ a large number of people. Thus they create employment. Other than the employment factor, the defense industry pays a hefty amount of income tax. In the year 2010, the US earned 38 Billion Dollars in wage and income-based tax from the defense industry.


Leaving aside the direct impact, A country that has a strong defense industry also attracts foreign investments. Countries often sell their military products to allies. This leads to a better current account balance and better trade connections as well.


Influence By COVID?

COVID is something we are all familiar with. It has impacted every one of us in one way or the other. Similarly, it has had a huge impact on economies and firms as well. From the education sector to the health sector, everyone has suffered from this pandemic. However, has the defense industry been impacted by this pandemic as well?


To say that it has had no effect on the defense industry is wrong. Supply chains have been damaged everywhere even in the defense industry. However, the defense industry has survived. The Pentagon reported that most of its programs were delayed. However, after some financial help from the government, they were back on track.


As per the statement of Will Roper while talking about COVIDs impact on the defense industry, “COVID-19 was horrible but could have been a lot worse”.

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Global defense spending continues to rise every passing year. According to Deloitte, it is expected to rise by 2.8% crossing the 2 trillion dollar mark. Even despite the COVID pandemic, militaries have continued to strengthen themselves.


The future of the defense industry looks steady. Most major countries have continued to either maintain or increase their defense spending. Russia is the only major country that has

Decreased its military spending this year in order to invest in social programs. This is an indicator that most countries will continue to focus on increasing their military strength. This will enable the defense industry to continue on its path of growth

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