Defence contractors need agility and resilience to thrive against a global backdrop of increasing geopolitical instability, advancing technologies, and complex security threats. Reliance on traditional government contracts and military supplies alone inhibits companies from embracing the breadth of the modern defence industry. As demonstrated by market leaders like STREIT Group, pursuing diversification can drive industry innovation, meet security challenges, and facilitate expansion into new sectors.
What is the Global Defence Market Forecast for 2025?
The era of classical warfare, waged on a pitched battlefield, is long gone. Asymmetrical warfare using unconventional tactics to exploit vulnerabilities is commonplace- terrorists, insurgents, guerilla fighters, and cybercriminals are ready to exploit the smallest oversight. Artificial intelligence (AI) advancements have led to unmanned vehicles dominating conflict zones, while private security firms and non-state interests have further redefined the industry.
As the Stockholm International Peace Research Institute reported, global expenditure rose for the 9th consecutive year in 2023, by 6.8% to $2.443 trillion. Increases in spending were evident across all geographical regions worldwide, and 2025 has only seen this trend continue. As governments and high-profile individuals seek to gain military advantages while protecting national, strategic, and personal interests, for defence contractors, this is a time of opportunity.
How Has the Defence Industry Changed?
Across the globe, economic instability is rife, with global inflation and fluctuating budgets leading to cost-cutting measures. Coupled with an increasing desire for value and versatility from investments, this has transformed the face of the security sector. Dual-use technologies and multi-purpose defence assets with both military and civilian applications both meet these requirements, and allow security manufacturers to expand into adjacent markets.
Since the COVID-19 pandemic, supply-chain fragility has become shockingly apparent, and manufacturers have been working hard to overcome this. To increase resilience, many market leaders have established plants and factories in a range of locations worldwide, and are now sourcing raw materials and components from a variety of suppliers. A greater focus on sustainability is leading to developments in eco-friendly technologies such as electric vehicles, and a focus on reducing carbon emissions.
What are the Most Effective Diversification Strategies for Defence Contractors?
Evolving beyond traditional military applications offers security and defence companies far greater potential for growth and resilience during turbulent economic times. Supplying equipment and training to law enforcement, infrastructure defence teams, border security forces, and personal security agencies opens up vast new markets and opportunities for expansion. These are the most effective trends towards diversification:
- Broadening Product Range: Whatever a company’s primary product, it likely has a broader range of applications than was originally conceived. For example, the defensive capabilities and life-protecting capacity of STREIT Groups’s armoured personnel carriers and ballistic glass are invaluable in settings far from any battlefield.
Recognising the value of their technology in a wide range of high-risk situations, they have diversified their portfolio. Now, they produce riot control vehicles, armoured personnel boats, mobile security systems, and cash-in-transit armoured vehicles. This has enabled them to not only cater to governments and military organisations but also law enforcement, financial institutions, humanitarian agencies, and civilians/private organisations operating in high-risk environments.
- Creating Dual-Use Technologies: Developing equipment and software with multiple applications allows a company to serve numerous sectors with one product. This approach is extremely effective for diversifying income streams and increasing their potential client pool. By introducing military technologies to other sectors, a wide variety of industries can benefit from increased safety, performance, and efficiency, all while allowing manufacturers to thrive in an unstable market environment.
- Establishing a Global Presence: Developing manufacturing hubs and opening sales offices in a variety of geographical regions not only strengthens the supply chain. By having facilities in a range of global locations, companies can tailor their offerings to regional security needs. Having staff members on site facilitates effective networking with local governments, private entities, and security agencies, allowing strong partnerships to be built.
- Provide Training to Complement Product Ranges: As the adage goes: the tool is only as effective as the skillfulness of the hands that wield it. Advanced equipment requires proper training to be used to its best, and customers are likely to trust the original manufacturer of any item to be the authority on its mechanism. Establishing a training centre for clients to learn how to use products to their fullest potential is an easy route to diversification.
- Investing in Sustainable and Green Technologies: The effects of climate change and natural resource depletion are being felt across the world, and global policies are reflecting this. Through investment in eco-friendly technologies and commitment to reducing carbon emissions, security and defence companies can differentiate themselves by embracing innovative solutions.
What Are Some Examples of Dual-Use Technologies?
Examples of dual-use technologies include:
- Surveillance and AI systems originally developed for military use are valuable assets for law enforcement agencies and corporate security purposes.
- Autonomous and electric vehicles and their hybrid power systems, initially developed for military use now becoming widely adopted by commercial automotive and logistics firms, as well as within warehouses and by disaster response teams.
- Drone technology created for reconnaissance and combat has become indispensable for disaster response teams, logistics firms, and in agriculture.
- Advanced ballistic-resistant materials like Armored Protection Glass (APG), first created for military vehicles, are now used in modern policing tools and personal protective equipment.
- Cybersecurity defence strategies and military-grade encryption are now widely used by financial institutions, government departments, and to protect critical infrastructure.
It is clear to see how adaptability and innovation are the most efficient way for companies operating within the defence industry to thrive long into the future. Diversification through broader product ranges, versatile security solutions, and catering to untapped markets will position firms to succeed despite any global economic instability or disruption.
With over 30 years of experience supplying advanced ballistic protection and armoured vehicles, STREIT Group have saved countless lives and established themselves as one of the most trusted companies in the industry. Explore their broad range of protective technologies to find the perfect vehicles for your security needs.