Industrial R&D in the aerospace and defense sectors has been relatively stable for the past several years, both globally and in the U.S. R&D in this sector is driven primarily by defense
spending by governments, the commercial airline industry and
satellite/rocket programs (excluding electronics). Industrial suppliers in this sector supporting the defense, airline and satellite
subsectors and are shown in the Table. Also included in this
sector are companies involved in navigation, instrumentation,
and communication equipment, along with companies engaged
in defense and homeland security-related activities. The DOD
also funds a wide variety of contract research activities that are
outside the scope of this report.
These industrial sectors have been declining in a consistent
and expected manner. Over the past decade there have been a
number of mergers and acquisitions that have compressed the
overall industry and shrunken the total R&D base. Concerns
over the shrinking aerospace and defense sector has troubled
this industry over the past 10 years. Only with the Trump
Administration has there been a resurgence in government
funding in this area. The U.S.’s FY2018 budget is expected to see
significant increases in the DOD which will support increased
Growing demand for commercial aircraft that are fuel efficient, with low operating costs and with improved long-range
performance and amenities is driving R&D for new aircraft,
especially for the Asian market. New commercial aircraft are
being developed by China, Russia and a new Airbus/Bombar-dier alliance, along with a new Boeing aircraft to replace its 737
model. All of these are drivers for increased commercial aircraft
R&D for the next decade.
A recent market analysis by the Bank of America Merrill Lynch
(BofAML) also noted that the size of the space industry is expected to octuple over the next 30 years to at least $2.7 trillion.
The BofAML joined with Morgan Stanley to estimate the value
of the space market in 2017 at $350 billion.
The development of reusable launch vehicles
by SpaceX, the growth of private ownership in
the market and expanded investment by now
more than 80 countries have reduced launch
and vehicle costs. Space is now being touted as
a “hotbed of disruptive technologies,” according
to the report.
Development of space equipment and hardware is one of the few areas left untouched by
the Trump Administration’s budget cutting axe
with numerous programs being continued—
admittedly, a few space programs in their early
development stages have been cut or reduced.
NASA large James Webb Space Telescope has
been immune to cuts and is still expected to
launch in late 2018.
There is no letup from global launch developers
and services. China continues its aggressive independent launch schedule for satellites and lunar
plans. Russia is continuing to upgrade its launch
vehicle family. Boeing and SpaceX are continuing their independent development of manned
vehicles to support the ISS and NASA’s 2020 Mars
spacecraft continues its development as well.
2016 Global 2016 U.S. 2017 Global 2017 U.S. 2018 Global 2018 U.S.
14. 9 15.3 15.1
30.0 29. 8 30. 5
Aerospace/Defense R&D Spending
Industrial R&D Spenders –
Aerospace / Defense
Boeing $4.627 $4.961 $5.347
BAE Systems $1.693 $1.670 $1.607
Lockheed Martin $0.988 $1.074 $1.167
Raytheon $0.755 $0.867 $0.967
NorthropGrumman $0.705 $0.796 $0.861
TotalTop5 $8.768 $9.368 $9.949
Source: R&D Magazine Survey 2017
Source: R&D Magazine Survey 2017