Defense industry

Defense industry includes defense contractors, arms industry, private military contractors, and European defense procurement.


Defense industry is also known as military industry. It comprises government and commercial bodies actively involved in research and development of military equipments. Defense industry also involves production and service of military equipment and facilities.

Defense contractors

Defense contractors offer products or services to defense department of national governments. They can be an individual entity as well as an organization. Products supplied by defense contractors include military aircrafts, vehicles, ships, weaponry, and electronic systems. Services offered by defense contractors may include logistics, technical support, training, and communications.

In 2007, Lockheed Martin was identified as world’s number one defense contractor, followed by Boeing, BAE Systems, Northrop Grumman, Raytheon, General Dynamics, EADS, and L-3 Communications.

Arms industry

Arms industry is responsible for manufacturing and selling military weapons and equipments. Some products manufactured by arms industry include guns, missiles, ammunition, military aircrafts, and electronic systems.

According to rough estimations, world spending on military expenditure runs into more than 1 trillion dollar. Out of this, a major part of the fund is used to purchase military weapons and services from arms industry. In 2006, total arms sales made by top 100 defense companies exceeded $300 billion.

Illegal arms trade

Illegal arms trade occurs in many countries. These arms are traded in domestic market and are meant to be used by citizens. Regions where political instability exists are prone to the occurrence of illegal trade of arms.

Top arms exporters

US top the list of world’s top arms exporters. Russia, European Union, Germany, France, UK, and Netherlands are also recognized as major arms exporting countries.

US financial crisis

US financial crisis is also believed to cause a negative impact on defense industry. Defense companies like Boeing are apprehensive about the effect that government’s bailout plan is likely to cause on their business. Sale of fighter jets, tanks, and ships could be affected. Next US President is likely to face immense pressure to reduce government spending on military programs.