Defense industry trends

Summary: Autonomous combat systems are revolutionizing land defense by reducing human risk and enhancing operational efficiency through the integration of AI and robotics.

Current Situation: Autonomous ground vehicles are being tested in military settings, primarily for tasks like reconnaissance, logistics, and combat. These systems rely on AI to make real-time decisions but still require human oversight for complex operations. The technology is in its early stages, with some prototypes being deployed for non-combat missions. However, ethical concerns and limitations in AI decision-making are slowing full combat adoption.

Expected Development: Over the next 6-8 years, fully autonomous combat systems will be developed, capable of navigating complex environments and engaging in combat with minimal human intervention. This will transform military tactics and strategies, significantly reducing the risk to personnel in high-risk zones.

Challenges: Ethical concerns, regulatory hurdles, and the need for advanced fail-safe measures to ensure control and accountability will slow adoption. AI systems must also improve in making accurate decisions in dynamic, unpredictable environments.

Time to Impact: 6-8 years

Potential Impact: Very High

STEEP Segment: Technological

This year’s trend development

Summary: As cyber threats become more sophisticated, military operations are increasingly incorporating comprehensive cyber defense strategies to protect critical infrastructure and systems.

Current Situation: Cyber defense policies are becoming a core component of national military strategies, with dedicated units focused on protecting land-based defense systems from cyberattacks. Governments are investing in cybersecurity frameworks to safeguard communication networks, weapons systems, and critical infrastructure from both nation-state and non-state actors. Existing defenses, however, are not always sufficient to counter advanced, emerging cyber threats.

Expected Development: Within the next 4-6 years, cyber defense will be fully integrated into military operations, including real-time response capabilities to defend against cyberattacks during combat. Military forces will rely more on AI-driven systems to detect and neutralize threats in real-time, increasing the resilience of defense networks.

Challenges: Cyber threats evolve quickly, requiring continuous updates to defense protocols. Ensuring that military cyber defense systems keep pace with technological advancements and identifying threats early are key challenges.

Time to Impact: 4-6 years

Potential Impact: High

STEEP Segment: Political

This year’s trend development

Summary: Climate change is increasingly threatening military infrastructure, pushing defense forces to adapt their installations and operations to withstand extreme weather and rising sea levels.

Current Situation: Military bases, particularly coastal installations, are facing increased risks from rising sea levels, extreme temperatures, and natural disasters. These environmental challenges are affecting infrastructure, logistics, and operational readiness. Currently, militaries are investing in assessments to evaluate their vulnerabilities and starting to adopt early-stage resilience measures, such as flood defenses and temperature control systems.

Expected Development: Over the next 4-6 years, defense organizations will prioritize investments in climate-resilient infrastructure to ensure continuity of operations during extreme weather events. This will include infrastructure upgrades, climate risk assessments, and the adoption of advanced early-warning systems for natural disasters.

Challenges: Significant investment is required to upgrade existing infrastructure, and the unpredictable nature of climate change complicates long-term planning. Additionally, integrating climate resilience into military strategies without compromising operational readiness is a challenge.

Time to Impact: 4-6 years

Potential Impact: Very High

STEEP Segment: Ecological

This year’s trend development

Summary: Hypersonic flight developments are rapidly advancing, allowing missiles to travel at speeds exceeding Mach 5, making them difficult to intercept.

Current Situation: Hypersonic technology is being actively pursued by military powers like the U.S. and China, who are developing hypersonic glide vehicles (HGVs) and missiles. These systems challenge existing missile defense systems due to their speed and maneuverability. Current air defense systems struggle to detect and track these missiles, creating an arms race in hypersonic detection and interception technologies.

Expected Development: Over the next 5-10 years, hypersonic technology will become a central feature of military arsenals. Air defense systems will incorporate more sophisticated detection and interception technologies, likely leading to substantial investments in new countermeasures. Hypersonic missiles will be integrated into offensive and defensive military strategies.

Challenges: Developing cost-effective detection and interception technologies for hypersonic systems is a major challenge. Additionally, the complexity of tracking and targeting these missiles requires significant advancements in radar and defense infrastructure.

Time to Impact: 4-6 years

Potential Impact: Very High

STEEP Segment: Technological

This year’s trend development

Summary: AI is driving the development of autonomous flight systems, reducing reliance on human pilots and enabling more effective and scalable defense operations.

Current Situation: Autonomous flight systems, including unmanned aerial vehicles (UAVs), are playing an increasing role in defense strategies, with AI enhancing their capabilities in surveillance, logistics, and attack roles. The technology is still maturing, with AI pilots and autonomous decision-making systems becoming more sophisticated.

Expected Development: In the next 6-8 years, fully autonomous fighter jets and drone swarms are expected to be deployed for coordinated attacks and reconnaissance missions. These systems will operate with minimal human oversight, enhancing military capabilities and changing the nature of air combat.

Challenges: Ethical concerns, regulatory challenges, and cybersecurity threats are the primary obstacles to full adoption. Ensuring the safe and reliable operation of autonomous systems without human intervention will require overcoming significant technological and regulatory hurdles.

Time to Impact: 6-8 years

Potential Impact: High

STEEP Segment: Technological

This year’s trend development

Summary: Growing cyber threats are shaping defense spending and policies, making cybersecurity a critical part of national defense strategies.

Current Situation: Cyberattacks are becoming a key threat to national security, with countries increasingly prioritizing cybersecurity in their defense strategies. Military organizations are expanding budgets for cyber defense to protect critical infrastructure and defense systems. International policies and frameworks are being developed to address the growing threat of cyber warfare.

Expected Development: In the next 5-10 years, cybersecurity will become an even larger portion of defense budgets, with increased collaboration between nations on cyber defense frameworks. As cyber threats evolve, defense agencies will focus on securing critical infrastructure and deploying advanced cyber defense systems.

Challenges: Cybersecurity threats are rapidly evolving, making it difficult for defense organizations to stay ahead. Developing a robust and adaptive cyber defense strategy requires significant investment and cooperation across international boundaries.

Time to Impact: 5-8 years

Potential Impact: Very High

STEEP Segment: Political/Technological

This year’s trend development

Summary: Autonomous naval vessels will enable longer missions with reduced human risk, transforming naval defense strategies.

Current Situation: Autonomous vessels are being developed primarily for surveillance and reconnaissance, using AI to navigate and make real-time decisions. These systems are currently in the early deployment stage, focusing on limited, non-combat missions. Countries are investing heavily in testing these systems to reduce personnel risks and operational costs, while improving fleet efficiency.

Expected Development: Over the next 4-6 years, autonomous vessels will be fully integrated into naval operations, handling more complex combat and intelligence tasks. They will be part of a broader system involving drones and AI-assisted submarines, leading to a shift in naval tactics and operational capabilities.

Challenges: Cybersecurity threats and ethical concerns about the use of autonomous combat systems remain significant obstacles, as well as integration with existing naval fleets.

Time to Impact: 4-6 years

Potential Impact: High

STEEP Segment: Technological

This year’s trend development

Summary: Territorial disputes over naval sovereignty are intensifying, driving increased naval presence and defense investments in contested regions.

Current Situation: Disputes over strategic waters, such as in the South China Sea and the Arctic, are becoming more frequent, with nations seeking to assert control over these areas. This has led to an increased naval presence, frequent clashes, and a rise in military spending as countries prioritize defending their territorial claims. Naval build-up and defense investments are already ramping up in these regions.

Expected Development: Over the next 4-6 years, territorial disputes will likely escalate further, prompting more frequent confrontations and continued military investment in contested waters. Naval forces will play a key role in asserting sovereignty and deterring potential adversaries.

Challenges: Balancing diplomacy and defense posturing while managing the risk of military conflict is a major concern, particularly as tensions rise in regions like the Indo-Pacific.

Time to Impact: 4-6 years

Potential Impact: High

STEEP Segment: Political

This year's trend development

Summary: Rising sea levels are threatening coastal naval bases, requiring significant adaptation efforts to maintain operational readiness.

Current Situation: Climate change is causing sea levels to rise, putting several coastal naval bases at risk of flooding and infrastructure damage. Countries like the U.S. and the U.K. are beginning to assess the vulnerabilities of their bases and plan relocations or reinforce critical infrastructure to mitigate future risks.

Expected Development: Over the next 6-8 years, naval forces will implement long-term adaptation strategies, including relocating bases or building floating platforms to ensure resilience against rising seas. Strategic decisions will focus on maintaining operational capacity while adapting to environmental challenges.

Challenges: The financial and logistical challenges of relocating or reinforcing naval bases are significant, with long-term planning required to avoid compromising defense capabilities.

Time to Impact: 6-8 years

Potential Impact: Medium

STEEP Segment: Ecological

This year's trend development

Summary: Autonomous defense spacecraft will revolutionize space security by operating independently, reducing the need for human intervention.

Current Situation: Autonomous systems for space defense are being developed to protect critical space assets like satellites. Current prototypes focus on basic operations, such as maneuvering and collision avoidance, but most systems still rely on ground control. These early-stage autonomous systems are in testing, with limited deployment in certain space missions. However, advancements in AI and robotics are accelerating their development, especially for use in defense-related missions where quick, independent responses are crucial. 

Expected Development: Over the next 4-6 years, autonomous spacecraft will be able to perform complex tasks independently, such as identifying and neutralizing space threats, including orbital debris or hostile satellites. This will greatly enhance space defense capabilities and reduce reliance on human operators, allowing for real-time response to threats.

Challenges: Major challenges include ensuring safety and reliability without human oversight, as well as managing the high volume of data these systems will need to process. Integration with traditional defense systems and minimizing risks of unintended actions are also key hurdles.

Time to Impact: 4-6 years

Potential Impact: Very High

STEEP Segment: Technological

This year’s trend development

Summary: Rising geopolitical competition is intensifying the race for space dominance, with countries accelerating their space defense capabilities.

Current Situation: Nations are increasingly investing in space defense technologies, with competition growing over space assets like satellites and military infrastructure. Tensions between major spacefaring countries, such as the U.S., China, and Russia, are leading to a more militarized approach to space. Space is becoming a critical domain for national security, and efforts to dominate this new frontier are escalating, with countries developing their own space weapons and defense systems.

Expected Development: In the next 6-8 years, geopolitical tensions in space are expected to rise further as more countries enter the space race. This could lead to militarized conflicts unless effective diplomatic measures and treaties are established to manage space competition and clarify boundaries.

Challenges: The primary challenge is preventing conflicts in space while balancing national security interests. Ensuring international cooperation amid growing mistrust between major space powers is critical but difficult. Establishing treaties and regulations to govern military activities in space will be vital to prevent escalation.

Time to Impact: 6-8 years

Potential Impact: Very High

STEEP Segment: Political

This year's trend development

Summary: Space-based laser systems will provide a real-time defense mechanism to neutralize threats from Earth or space.

Current Situation: Space-based lasers are in the early stages of development, with initial systems deployed for missile defense and communication disruption. These ground-based systems have proven effective, but space-deployed laser systems are still in the experimental phase. Efforts are focused on refining laser technology to make it suitable for space environments, where power requirements and cooling systems present significant challenges.

Expected Development: Over the next 6-8 years, space-based laser systems will become a core component of space defense strategies. They will be capable of disabling enemy satellites, intercepting missiles, and providing rapid responses to threats. These systems will significantly enhance the ability of nations to defend their space assets in real-time.

Challenges: The technical challenges of deploying powerful laser systems in space, particularly in managing the high energy requirements and ensuring operational precision, are significant. Additionally, there is a risk of escalating arms races in space as nations develop similar technologies.

Time to Impact: 6-8 years

Potential Impact: High

STEEP Segment: Technological

This year's trend development

Summary: As quantum computing advances, the need for quantum-resistant encryption algorithms will grow, ensuring data remains secure from future quantum-based attacks.

Current Situation: Current encryption methods, such as RSA and ECC, are vulnerable to quantum computing, which could theoretically crack these encryptions in mere hours. Research into quantum-resistant algorithms is underway, but adoption remains in the early stages, primarily in academic and niche sectors. Major organizations and governments are beginning to explore the implications of quantum computing on national security and long-term data integrity.

Expected Development: Over the next 6-8 years, as quantum computing becomes more practical, we will see widespread adoption of quantum-resistant cryptographic techniques across industries, particularly in sectors dealing with sensitive information, such as finance, healthcare, and defense. This transition will secure future communications and transactions from quantum-based decryption.

Challenges: Transitioning from current encryption standards to quantum-resistant methods will be complex and costly. Additionally, ensuring interoperability with legacy systems and the global standardization of quantum-resistant algorithms will be challenging.

Time to Impact: 6-8 years

Potential Impact: Very High

STEEP Segment: Technological

This year’s trend development

Summary: Climate-related disruptions will increasingly impact cyber defense infrastructure, requiring more resilient and adaptable systems.

Current Situation: Climate change is starting to affect critical infrastructure, including data centers, satellite systems, and communication networks, which are vulnerable to extreme weather events. Although some organizations have started factoring climate risks into their infrastructure planning, many systems remain unprepared for climate-related disruptions.

Expected Development: In the next 6-8 years, climate resilience will become a core consideration for cyber defense providers, especially for infrastructure located in climate-sensitive regions. Governments and industries will invest in systems that can withstand extreme weather, natural disasters, and rising sea levels, ensuring uninterrupted defense operations in critical sectors.

Challenges: Retrofitting legacy infrastructure to withstand climate impacts will be expensive and complex. Additionally, predicting the full range of climate risks requires advanced environmental modeling, which is still in its early stages.

Time to Impact: 6-8 years

Potential Impact: High

STEEP Segment: Ecological

This year's trend development

Summary: Fully autonomous AI-driven cyber defense systems will protect critical infrastructure without human intervention, responding instantly to evolving threats.

Current Situation: While AI is already used in cyber defense for anomaly detection and threat prediction, current systems still require human oversight for complex decision-making. Research is focusing on creating more autonomous AI systems capable of independently identifying and neutralizing threats in real time.

Expected Development: In 6-8 years, autonomous AI-driven defense systems will be capable of monitoring, detecting, and responding to cyber threats across critical infrastructure without human involvement. These systems will use machine learning to adapt to new threats and reduce response times to near-zero, becoming essential in high-risk sectors like defense, finance, and national security.

Challenges: Ethical concerns around fully autonomous decision-making in high-stakes situations, as well as the risk of adversarial AI manipulating these systems, will need to be addressed. Additionally, ensuring the reliability and accuracy of these systems over long-term deployments is a significant challenge.

Time to Impact: 6-8 years

Potential Impact: Very High

STEEP Segment: Technological

This year's trend development