MOUNTAIN VIEW, Calif.: As overall budgets grow and expenditure on training and simulation products continues to rise, the U.S. military training and simulation market has witnessed stable growth. The Department of Defense (DoD) training and simulation market has had to keep in step with advancements in technology.
New analysis from Frost & Sullivan, U.S. Military Training and Simulation Market, finds that the DoD spent $22.2 billion on training and simulation products and services in FY 2009, and estimates this to reach $24.1 billion by 2015. The market is slated to grow at a compound annual growth rate (CAGR) of 1.4 percent from FY2009-FY2015.
High costs in live training, expanding simulation capabilities, and the desire to decrease wear and tear on operational assets will move funding away from live training toward virtual and constructive training, or toward a more efficient mix of live, virtual, and constructive training. In all segments of the training market – virtual, live, constructive/ command, control, communications, computers, intelligence, surveillance, reconnaissance (C4ISR), and education, the DoD has consistently sought out less expensive, but more effective training.
“The three major military departments – Army, Air Force, and Navy – are the major spenders on training products and services in the DoD with the Navy providing the contracts for the Marine Corps,” says Frost & Sullivan Industry Analyst Nelson Sturdivant.
Extensive use of improvised explosive devices in the conflicts in Iraq and Afghanistan has amplified the need for specialized ground crew simulations to train on recognition, detection, avoidance, and deployment of missions against the threat. Instead of solely training soldiers in the nuances of warfare and combat tactics, the Army has introduced new online training methods including cultural training and pre-deployment language training.
Though flight simulators have been in use for a long time in the Air Force, the emphasis is now shifting to virtual and constructive training. Also, increases in shipboard technology and assets have ratcheted up reliance on virtual and constructive methods for training in the Navy.
Although the U.S. military training and simulation market has progressed steadily, some issues have clouded the landscape. A buildup of equipment occurred with the amassment of troops/personnel in Iraq and Afghanistan. Future drawdowns in personnel and equipment will cause a decrease in spending on training for those systems.
In terms of the competitive scenario, the large number of participants has created barriers to entry. Major defense contractors still hold sway over the training and simulation market; however, some smaller ‘tech’ companies have made inroads into this domain by forming major contracts or partnerships with the large ones.
“Operations and maintenance (O&M) spending will continue for the majority of systems,” says Sturdivant. “Companies should posture to gain or maintain their position for O&M dollars.”
Smaller contractors and subcontractors can team with primes to gain a position on the O&M work that will be needed.
U.S. Military Training and Simulation Market is part of the Defense Growth Partnership Service program, which also includes research in the following markets: commercial and military aviation, military vehicles, training, and simulation. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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