Counter-Drone Systems in Context: Defense Economics and Weapons Market Trends

Sine Özkaraşahin, Junior Researcher, EDAM

Key Takeaway

Drones are becoming increasingly available to armed conflicts taking place in different corners of the world. As proved in the Azerbaijani victory in the Karabakh War, unmanned aerial systems (UAS) now provide decisive military capabilities that even tip decades-long deadlocks. In tandem, counter-drone technologies follow suit in international weapons markets and defense technologies research & development agendas. Grasping the industrial trends is crucial for defense economics, as the early acquisition of C-UAS technologies will, inevitably, lead to significant geopolitical consequences.

Perils of Drone Proliferation and Future of the C-UAS Market

In the ever-changing security environment, UAS loom large as ideal assets for a broad range of tasks, as they provide highly flexible operational capabilities, such as gathering intelligence, providing target detection input to land-based fire-support units, and directly engaging in pinpoint strikes [[1]].

In many cases, drones are more difficult to detect using conventional radar & air defense networks that are inherently optimized for manned aircraft. Currently, several countries are well-aware of the technical merits of UAS and its effects on defense policy. Consequently, this awareness ignited an exponential growth in the counter-drone industry. According to the Center for the Study of the Drone, “over 230 counter-drone commodities were produced by 155 manufacturers, in 33 different countries” in 2018 [[2]]. 67 of these systems had both detection and interdiction capabilities. The same year, a record of 157 investment deals was signed, accounting for a total investment of 1,205 billion dollars [[3]].

In early 2021, the U.S. military announced a plan to allocate over 400 million dollars to C-UAS research and development [[4]]. The officials also underlined that they will spend “at least 83 million dollars on C-UAS procurement [[5]]. Drone detection and disruption applications are expected to be the fastest-growing segments of the industry by 2025 [[6]]. Additionally, ‘commercial verticals’ (supply of the C-UAS technology to various industries with counter-drone needs, such as public venues and critical infrastructure) are expected to hold the largest share in the industry in the near future [[7]].

With important investments from venture capital firms and governments, the C-UAS sector’s exponential growth came in the last five years, as over 200 systems entered the market within the given timeframe. C-UAS acquisition and development is the second [[8]] fastest-growing category in the UAS industry [[9]]. In 2019, the funding for C-UAS continued to rise, growing by 99 percent, reaching approximately 1.05 billion dollars [[10]].

Several sources claim that the UAS sector will be worth between 4.5 [[11]]