According to recent analysis by PricewaterhouseCoopers (PwC), the compound annual growth rate of defense spending will likely increase in 58 of 71 nations between 2017-2021 as the global defense environment becomes increasingly complex.
PwC Global Defense Perspectives 2017 analyzes defense prioritization, measured by spending as a percentage of GDP, and security posture, the degree to which nations deploy air and ground forces outside their national boundaries and the amount of military equipment they sell or lease.
In 45 percent of the countries analyzed, spending increases will reverse declines that occurred from 2012 to 2016. Despite projected spending growth, the report said, defense spending will still be under pressure as threats continue to increase due to growing cybersecurity threats.
“The security challenges confronting national defense organizations are complex and dynamic,” Rollie Quinn, global government, and public services leader at PwC, said. “The nature of what defines today’s ‘battlespace’ is changing rapidly as cyber criminality and information warfare are increasingly used as disruptive tools for damaging cyber-attacks on individuals, governments and commercial entities. Both defense prioritization and posture will continue to increase to meet these evolving threats.”
The analysis also identified several megatrends as having a “profound effect” on defense and security, including the shift in global economic power from west to east, demographic change and the rise of technology.
In a focus on the NATO alliance, the analysis found that although defense spending among NATO nations remains negative, increasing pressure from NATO allies and improving economic conditions will improve the prospects for more NATO nations to meet the 2 percent guideline in the next five years.