DSEi 2013 – New markets, new opportunities

From the 10th to the 13th September the military world will be descending on ExCeL exhibition centre in London’s docklands. The Defence and Security International (DSEi) is a global showcase for innovative defence and security equipment. This year the show’s organisers are having to strike a balance between the established western markets such as the UK, USA, Germany, France and Canada while at the same time reflecting the growing importance of new markets in Asia, the Middle East and Latin America.

Last year saw the first drop in annual military spending since 1998 according to figures from the Stockholm International Peace Research Institute (SIPRI), shrinking 0.5 percent in real terms over 2011. Despite that drop spending still totalled over $1.7 trillion in 2012. Much of the decline was reflected by cutbacks in the United States – as it begins to pull out of Iraq and Afghanistan – and by cuts in defence spending forced on European countries by austerity and the ongoing economic crisis in Europe.

Spending by the US fell by 6 per cent in 2012 to $682bn and now accounts for under 40 percent of global military spending – the first time that has happened since the demise of the Soviet Union in 1989. Despite this drop, and further cuts are planned in 2013, the US remains the dominant military power, spending more than the next 10 biggest spenders combined.

Defence spending still accounts for 2.5 percent of global gross domestic product, and remains higher than the previous peak in military spending recorded near the end of the Cold War.

According to figures from SIPRI a smaller number of countries are spending more on defence. In 2012 the top 15 countries with the highest spending accounted for over 81% of the total with the USA responsible for 39 per cent of the world total, followed by China (9.5% ), Russia (5.2%), the UK (3.5%) and Japan (3.4%).

Looking at the overall trend in the market Dr. Sam Perlo-Freeman, director of SIPRI’s Military Expenditure and Arms Production Program, said that “we may be at the beginning of a shift in the balance of world military spending from the rich Western countries to emerging regions.”

In Asia, for example, defence spending is increasing, rising 3.4 percent per year in 2009-2012, although that represents a significant slowdown on the preceding three year period.

China is continuing to modernise its military while Japan, India, Australia and South Korea are all now among the top 15 markets for military equipment. Japan overtook France last year to become the fifth largest market.

Among the key regional developments noted last year in terms of the way in which spending was changing:

Military expenditure in Asia and Oceania rose by 3.3 per cent in 2012, with large increases seen in Vietnam and in Indonesia. Spending in India actually decreased by 2.8 per cent.

Military spending also increased sharply across North Africa, up by 7.8 per cent in real terms, reflecting both ongoing military modernisation and worries over the growing threat of terrorism in the region.

The Middle East saw a rise of 8.4 per cent in 2012 driven by Oman where spending jumped by 51 per cent and Saudi Arabia which saw spending up by 12 per cent.

In Latin America military spending increased by 4.2 per cent in 2012. The largest increases were by Paraguay (43 per cent) and Venezuela (42 per cent). Mexico’s spending jumped by 9.7 per cent reflecting the growing role of the military in combating drug cartels.

As the global military market changes the shows organisers have sort to reflect the growing importance of these markets and have revealed that an impressive number of national pavilions have been confirmed with Brazil, Chile, Taiwan, South Africa, the UAE and India all present.

While reflecting a changing global market DSEi is also evolving and changing. This year there will be six specialised zones comprising of a Land Capability Zone; an Air Zone; Naval Zone; Security Zone; an Unmanned Systems Showcase and a Medical & Disaster Relief Zone.

DSEI 2013 represents a timely opportunity for Small and Medium-sized Enterprises (SMEs) in the UK to tap into both national and international export markets. With more than 30,000 visitors from over 120 countries expected to attend, it will provide a unique platform for companies to meet with customers from around the world.

According to the organisers the six themed zones will make it easier for visitors to meet UK SMEs and view their associated products either in a static display or in a realistic demonstration setting. The new structure, in conjunction with an enhanced seminar programme, has resulted in a significant increase in the number of exhibitors looking to attend the event.

DSEI Exhibition Director, Duncan Reid, said: “There is no doubt that SMEs recognise DSEI as the place to do business by launching new products and leveraging the networking potential on the show floor. There are clear benefits for SMEs to maximise their presence at DSEI 2013 to best identify potential business opportunities, particularly in growth export markets.”


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