The economics of counter-IED

Over the next 10 years, an estimated $23 billion will be spent on the development and production of major EW programs, according to Forecast International's “The Market for Electronic Warfare Systems.” Some 35,814 units of leading electronic countermeasures (ECM), radar warning receivers (RWRs), electronic support measures (ESM), and other EW systems that make up this analysis are expected to be produced through 2017.

“The need to counter IEDs has led to a sharp demand for systems and research designed specifically for that task,” said Andrew Dardine, Forecast International Senior Aerospace & Defense Analyst and author of the analysis. “The threat from these devices has only grown more in size and sophistication over the past few years. As a result, major contracts have been awarded to move the effort forward."

The market leaders in this analysis are Northrop Grumman, BAE Systems, Raytheon, ITT, and Lockheed Martin. The French defense firm Thales and Israel’s Elta Systems are also making increasingly strong showings in the areas of ESM and ECM systems for a variety of international applications.

While little has changed in recent years in terms of the apparent reluctance of any government agency to fund this extremely expensive work, EW manufacturers are jockeying for position in the market of missile protection for civilian airliners. The need to protect civilian airliners and other non-military aircraft has led many companies to invest large sums of money into adapting their military infrared (IR) countermeasures systems to new uses. The scope of this effort is truly international, with companies such as Saab, EADS, and Israel’s Rafael taking a strong lead, as well as BAE systems and Northrop Grumman.

While the prospect of equipping civilian aircraft is far from certain, the military demand for this technology is more assured. Northrop Grumman’s Large Aircraft IR Countermeasures (LAIRCM) system is expected to be installed on a growing number of NATO and U.S. aircraft. The FY08/09 U.S. defense budget features one of the biggest allotments for LAIRCM development and procurement in the system's history. The Pentagon plans to spend well over $1 billion through FY13 on procurement of the systems for these aircraft, declaring that its long-range desire is to equip a total of 444 aircraft.

Among military planners, the need to adapt and adopt airborne electronic attack (AEA) systems will also be a major market driver. Low-rate initial production of the U.S. Navy’s all-important EA-18G Growler AEA platform is to run through 2009-2012. Meanwhile, upgraded EA-6B Prowlers are deploying as fast as they can be completed. Desperately needing to disrupt and disable enemy communications on a moment’s notice, the U.S. Marine Corp has already taken an early lead in the program, procuring its own fleet of upgraded aircraft.

In terms of funding, based on a projection of the current U.S. defense budget, the Navy will likely spend more than $2.3 billion over the next 10 years on R&D for EW technology. Likewise, the Air Force can be expected to commit some $673.6 million for its own EW needs – a number that may change dramatically with the prospect of a possibly renewed B-52 Airborne Electronic Attack program.

Source: Forecast International Press Release