Situational Awareness Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2030)
The situational awareness systems market is projected to register a CAGR of over 4.5% during the forecast period (2021 - 2030).
Since the demand for situational awareness systems is a direct proponent of the ongoing procurement and upgrade of the fielded armada of aerial, terrestrial, and naval platforms, it is significantly affected by the sanctioned annual defense budget of nations. Hence, the COVID-19 pandemic has had a moderate impact on the market in focus. The ongoing global economic slowdown is anticipated to result in a subsequent decline in defense spending on a short-term basis. Due to existing regulations and controls, major US-based manufacturers are less likely to bear the impact of the wider supply chain disruption caused by the pandemic. However, suppliers and service providers located in Asia-Pacific and South America are more vulnerable to supply chain disruptions and are envisioned to face operational constraints and high financial risk exposure due to supply chain bottlenecks.
The situational awareness systems market is anticipated to be driven by a consistent increase in demand for situational awareness solutions in aviation and the military, the use of mobility solutions for military tactical operations, and the requirement to enhance the safety and security of military personnel. Additionally, the major players in the industry are supported by government bodies that make substantial investments, which enables them to spend more on R&D, allowing the companies to innovate continuously and introduce more efficient and advanced technologies.
During the last decade, many countries have developed and fielded their autonomous weapon systems to bolster their military capabilities and strengthen their troops in several conflicts around the world. The proliferation of innovations in sensor technologies, weapon firing systems, and other auxiliary systems enhances the accuracy and performance capabilities of the current generation of vehicles through the integration of sophisticated vehicle situational awareness systems. The emphasis on increasing the autonomy of vehicles has given rise to unmanned weapon technologies such as RWS and CIWS that can effectively neutralize a target without human intervention with the help of vehicle situational awareness systems. The new variants of such onboard weapons feature advanced optronics that renders them exceptionally suitable for urban warfare and reduces the casualties during a war. Thus, the increasing induction of military vehicles equipped with vehicle situational awareness systems is driving the demand for such systems.
In terms of geography, North America was estimated to be the largest market in 2020. The region is also expected to be the fastest-growing market during the forecast period. The North American situational awareness systems market is mainly dominated by demand from the United States. The market growth in this region can be attributed to the increased use of situational awareness in industries such as military and defense, aviation, maritime security, and homeland security applications. The massive spending by the military to enhance military situational awareness systems is responsible for driving the demand in the market. Over the next five years, the US Army is planning to spend more than USD 8.5 billion to modernize the service's battlefield networks. Network modernization is one of the top six modernization priorities for the US Army, as this will facilitate rapid data sharing and improvements in situational awareness architecture. In tandem with the plans mentioned above, in February 2020, L3Harris was awarded a 10-year USD 1.2 billion contract by the US Space Force's Space and Missile Systems Center to maintain and modernize the military's network of space surveillance sensors. Such developments may bolster the market prospects in the region during the forecast period.
The situational awareness systems market is fragmented, with many players accounting for a significant share. Some of the prominent companies in the market are Honeywell International Inc., Raytheon Technologies Corporation, BAE Systems PLC, Lockheed Martin Corporation, and Rheinmetall AG, among others. Companies are investing heavily in research and development for the innovation of new and advanced products and technologies that may help with new technologies. The major players are working to include the latest technologies like machine learning to be incorporated with situational awareness systems to allow space operators to identify abnormal activities and predict possible threats. For instance, in August 2019, BAE Systems announced that it won the US Defense Advanced Research Projects Agency (DARPA) contract to develop machine learning capabilities for space-based situational awareness for the country's military.