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Defence industry poised for billion dollar profits from global riot ‘contagion’
Defence industry poised for billion dollar profits from global riot ‘contagion’
Forecasts of relentless civil unrest in the US, Europe, Middle East, Africa and Asia seen as massive ‘investment opportunity’
The next five years will see the international market for ‘riot control systems’ boom to a value of more than $5 billion at an annual growth rate of 5%, according to a new report by a global business intelligence firm.
The report forecasts a dramatic rise in civil unrest across the world, including in North America and Europe, driven by an increase in Ferguson-style incidents and “extremist attacks.”
The Middle East, North Africa and Asia-Pacific regions will also experience a persistent rise in conflicts.
This increasing trend in instability promises billions of dollars of profits for global defence firms, concludes the report, published last month by Infiniti Research Ltd., a market intelligence firm whose clients include Fortune 500 companies.
“Protests, riots, and demonstrations are major issues faced by the law enforcement agencies across the world,” said Abhay Singh, a lead defence technology analyst at the firm. “In addition the increase in incidents of civil wars in countries such as Syria, Iraq, Lebanon, and Egypt along with an increase in the global defence budget will generate demand for riot control systems.”
Europe, the Middle East and Africa will be the largest market, collectively experiencing a rate of growth at over 5%, exceeding $2 billion by 2020. Under the subheading, ‘EMEA: increase in extremist attacks to boost growth’, the report, priced at over $2,000, explains:
“Over the past years, Europe witnessed an increase in extremist attacks, which has raised concerns among the law enforcement and defense industries to equip themselves with modern equipment and protect civilians from external threats. In 2015, the Paris attacks and the killing of journalists in France are some of the examples of growing terrorism in Europe.”
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Defense Industry Revenue Forecast Gushes Over Global Turmoil
The report alerts investors that “revenue growth” is “expected to take a positive turn” due to the terrorism and war in the Middle East and the tensions in Eastern Europe and the South China Sea.
Many analysts predicted declining revenue for the weapons industry as the U.S. scaled down military involvement in Iraq and Afghanistan. After all, as this chart from the Deloitte report shows, no other country even comes close to spending as much as the U.S. does.
But now governments around the world have moved swiftly to hike defense budgets to “combat terrorism and address sovereign security matters.”
The Deloitte report is almost giddy:
2015 was a pivotal year that saw heightened tensions between China, its neighbors and the US over “island building” in the South and East China Seas, and the related claims of sovereign ocean territory rights by China. In addition, Russia and the Ukraine are at odds related to Russia’s takeover of Crimea and their military actions in Eastern Ukraine. North Korea continues to threaten its neighbors with its nuclear ambitions and aggressive rocket launches. The Islamic State (ISIS) has become a key threat in Syria, Iraq, and Afghanistan and is involved in exporting terrorism to Europe, Africa, and elsewhere. The recent tragic bombings in Paris, Beirut, Mali, the Sinai Peninsula, and other places have emboldened nations to join in the fight against terrorism.
Several governments affected by these threats are increasing their defense budgets to combat terrorism and address sovereign security matters, including cyber-threats. For defense contractors, this represents an opportunity to sell more equipment and military weapons systems.
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