Ken Research has recently announced its latest publication The South African defense industry witnessed a reduction in expenditures due to decline in government budgets. The report titled “FUTURE OF THE SOUTH AFRICAN DEFENSE INDUSTRY-MARKET ATTRACTIVENESS, COMPETITIVE LANDSCAPE AND FORECASTS TO 2021” discusses South Africa Defense Industry in detail with focus on past , present and future trends. The report also discusses detailed profiles of the leading domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available.
Overview of the South Africa defense Industry
In this competitive era, local defense industry needs the constant support from the government and department of defense to survive in the market and compete with other economies. For this purpose, NDIC was created in South Africa. The NDIC coordinates between government and the department of defense and keep a check on local defense industry that it should be a supplier to local as well as international markets and must be reliable. The NDIC looks for the improvement of the defense sector. Since there are funding constraints, so it helps government to find new ways of funding and upgradation of technology. Defense sector in South Africa offers employment opportunities to many. It employs a significant share of the total population. This is also one of the aims of NDIC. There is a cut in defense budgets in South Africa so for the existence; Local defense industries need continuous support from the government. This industry requires capital expenditure and huge funds in Research and Development to bring innovations and switch over to advance technologies. Companies themselves are not self-sufficient for this large scale investment so government acts as an upper hand to them. The government tries to protect them and contributes as much as it can because the defense industry is very crucial for the nation’s growth, According Ken Research.
Also the developed country which spends a lot in Research and development in this crucial sector for the growth and safety of a nation is growing at a lower rate than the growth in developing or emerging countries. The reason is quite simple. Developing nation can replicate the R&D done by developed nations and can grow faster. Developing nations are reaping the benefits of R&D done by developed ones.
Key Driving Factors in Future of the South Africa defense Industry
Barriers in the growth of the South Africa defense Industry:
Future of the South Africa defense Industry
This is quite common among all the countries that defense expenditure is falling. Military expenditure is mainly driven by modernization of armed forces. Among the African economies, South Africa is the largest and the country attracts business in various fields such as mining, finance, retail markets and manufacturing. There was slowdown seen in global defense industry in terms of budget and investment till 2015 but in 2016, defense industry is expected to grow at 3%. Defense expenditure is expected to grow at a CAGR of 1.83% by 2021 to reach USD 4.6 billion.
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Ankur Gupta, Head Marketing & Communications