European Defence Training and Simulation Growth Opportunities

Commercial Off-the-Shelf Technology Advancements and Entry of Non-traditional T&S Companies Disrupting Market Share

The training and simulation (T&S) market is forecast to grow and evolve as countries move away from a reliance on live training and greater adoption of virtual and constructive systems. The T&S market has shown strong resilience to the effects of the COVID-19 pandemic, where a decline in live training capabilities has seen a greater adoption of virtual solutions to offset a loss in capabilities. It remains a major adopter of commercial off-the-shelf technologies as the commercial sector displays faster development of technologies at more affordable costs than the defence industry. This has increased the entry of non-traditional companies into the market, for example, the application of commercial gaming technologies to enhance planning and training capabilities such as the United Kingdom Defence Science and Technology Laboratory's use of Slitherine Software's commercial video games.

This report explores the changing trends in the European defence T&S market in light of the changing geopolitical landscape, economic turbulence, and developments within the military doctrine. The scope of this study investigates the changes and future direction over a period of 5 years, taking into account global perspectives and approaches. A key component of the report is a forecast of the overall market over a 5-year period and the current European market share.

Future expectations covered within the report include prioritization of rapid prototyping and development cycles with upgrades through software packages to reduce the overhead costs of upgrading physical training systems. A trend that is expected to continue throughout the forecast period is the gradual adoption of live, virtual, and constructive blended architectures and strategies, with a strong focus on upgrading and integrating legacy training systems. Amid global tensions and the nature of warfare shifting toward a more grey and hybrid model, training and simulation requirements will likely shift toward a reprioritization of capability development. This can be seen through the greater focus on cyber and electromagnetic activities (CEMA) as Western countries fall behind the capabilities of Russia and China, which are both very active within the CEMA domain. These priorities require T&S systems to include capabilities that keep pace with developments within military organizations. One of the positive outcomes of the pandemic is an increased realization of the benefits of virtual systems as the ability of units to train using more traditional live methodologies was reduced. The situation has forced traditionally conservative armed forces members to rely more on virtual systems and see the levels of realism these systems offer, increasing the uptake of these solutions. It is also paving the way for non-traditional defence and T&S companies, such as small arms simulator GAIM, to enter the market.