The Frost and Sullivan 2002 World Airborne EW Self-Protection and Decoys Market report estimates that the total spending for EW systems in 2001 was approximately $3.1 billion. Total revenues are expected to decline slightly over the next several years and gradually increase to approximately $5.3 billion by 2007. This modest growth rate is attributed to a combination of declining defense spending, uncertain economic conditions, and a decline in the number of total platforms expected to be procured over the next seven years.

The world has changed much since the end of the Cold War. The fall of the Soviet empire has left the world with only one true superpower, the United States. This change has had a significant impact on the perceptions regarding defense spending for many of the world's nations. Emphasis has shifted to social and economic interests and military spending has seen steady decreases for several years.

This shift in national spending priorities has slowed development and procurement of a number of military systems and has led to the discontinuation of others. Many countries no longer feel the need to man large military forces and have begun to scale back the number of systems being procured. Emphasis is shifting toward extending the life of current systems to delay replacement.

Electronic warfare systems are crucial to airborne self-protection and provide increased survivability to aircrew and platforms. Although most countries can continue to rely on Cold War technology, degradation of present systems will increase as new threats begin to emerge. New self-protection systems or improvements to existing ones will be necessary to defeat these emerging threats.

Ironically, the shift in spending priorities toward economic and social issues and away from defense spending will have a negative effect on the development and production of the EW systems that will be needed. The increasing costs of system development and production will also limit the number of EW systems being produced.

As countries seek to replace aging aircraft fleets, increasing procurement costs limit both the number of platforms that can be procured and the number of additional systems that can be purchased. Since EW systems are often add-on systems that do not come with the basic platform, limited funds will drive down the number of systems that can be purchased. The purchase of EW systems may be delayed or deemed economically unfeasible.

A factor affecting the procurement of EW systems is the perceived need. As the threat of full-scale conflict recedes in most parts of the world, countries are shifting their emphasis from large standing forces to smaller mobile forces that are capable of regional and contingency operations. These operations are less likely to have as great a threat of enemy air defenses that necessitate the use of EW systems.

Another factor that affects procurement is the success of airpower in recent operations. The successful employment of precision guided munitions and increasing accuracy of delivery is reducing the number of sorties needed to accomplish a mission. Fewer sorties translates to fewer aircraft, and that means fewer EW systems as well.

EW self-protection systems are a necessary part of platform and aircrew survivability and should not be discounted. However, with budgetary constraints and perceptions of necessity driving decision makers' choices, EW systems are likely to receive less funding than military advocates will desire. Even so, the threat to military platforms remains real and must be guarded against

This article is a product of Frost & Sullivan's newest research: World Airborne EW Self-Protection and Decoys Market report -- A179-16