Arms industry
The arms industry, also known as the defense 'industry or military industry' is a global industry which manufactures and sells weapons and other military technology to a variety of customers, including the armed forces of states and civilian individuals and organizations. Products of the arms industry include weapons, munitions, weapons platforms, communications systems, and other electronics, and related equipment. The arms industry also provides defense-related services, such as logistical and operational support. As a matter of policy, many governments of industrialized countries maintain or support a network of organizations, facilities, and resources to produce weapons and equipment for their military forces. This is often referred to as a defense industrial base. Entities involved in arms production for military purposes vary widely, and include private sector commercial firms, state-owned enterprises and public sector organizations, and scientific and academic institutions. Such entities perform a wide variety of functions, including research and development, engineering, production, and servicing of military material, equipment, and facilities. The weapons they produce are often made, maintained, and stored in arsenals.
In some regions of the world, there is a substantial legal trade in firearms for use by individuals. Illegal small arms trade occurs in many countries and regions affected by political instability.
History
During the early modern period, England, France, Sweden, and the Netherlands became self-sufficient in arms production, with diffusion and migration of skilled workers to more peripheral countries such as Portugal and Russia.The modern arms industry emerged in the second half of the nineteenth century as a product of the creation and expansion of the first large military–industrial companies. As smaller countries and even newly industrializing countries like Russia and Japan could no longer produce cutting-edge military equipment with their indigenous capacity-based resources, they increasingly began to contract the manufacturers of military equipment, such as battleships, artillery pieces and rifles to foreign government military entities. In 1854, the British government awarded a contract to the Elswick Ordnance Company to supply the latest loading artillery pieces. This galvanized the private sector into weapons production, with the surplus increasingly exported to foreign countries. William Armstrong became one of the first international arms dealers, selling his systems to governments across the world from Brazil to Japan. In 1884, he opened a shipyard at Elswick to specialize in warship production – at the time, it was the only factory in the world that could build a battleship and arm it completely. The factory produced warships for foreign naval forces, including the Imperial Japanese Navy. Several Armstrong cruisers played an important role in defeating the Russian fleet at the Battle of Tsushima in 1905. In the American Civil War in 1861 the North had about ten times the manufacturing capacity of the economy of the Confederate States of America. This advantage over the South included the ability to produce breech-loading rifles for use against the muzzle-loading rifles of the South. This began the transition to industrially produced mechanized weapons such as the Gatling gun.
This industrial innovation in the defense industry was adopted by Prussia in its 1864, 1866, and 1870–71 defeats of Denmark, Austria, and, France respectively. By this time the machine gun had begun entering arsenals. The first examples of its effectiveness were in 1899 during the Boer War and in 1905 during the Russo-Japanese War. However, Germany led the innovation of weapons and this advantage in the weapons of World War I nearly defeated the allies.
In 1885, France decided to capitalize on this increasingly lucrative trade and repealed its ban on weapon exports. The regulatory framework for the period up to the First World War was characterized by a laissez-faire policy that placed little obstruction in the way of weapons exports. Due to the carnage of World War I, arms traders began to be regarded with odium as "merchants of death" and were accused of having instigated and perpetuated the war for earning their profits from weapons sales. An inquiry into these allegations in Britain failed to find evidence to support them. However, the sea change in attitude about war more generally meant that governments began to control and regulate the trade themselves. The volume of the arms trade greatly increased during the 20th century, and it began to be used as a political tool, especially during the Cold War when the United States and the USSR supplied weapons to their proxies across the world, particularly third world countries.
Sectors
Land-based weapons
This category includes everything from light arms to heavy artillery, and the majority of producers are small. Many are located in third-world countries. International trade in handguns, machine guns, tanks, armored personnel carriers, and other relatively inexpensive weapons is substantial. There is relatively little regulation at the international level, and as a result, many weapons fall into the hands of organized crime, rebel forces, terrorists, or regimes under sanctions.Small arms
One billion firearms were in global circulation in 2017; of those, 857 million were possessed by civilians, 133 million were possessed by national militaries, and 23 million belonged to law enforcement agencies. 1,135 companies based in more than 98 countries manufactured small arms as well as their various components and ammunition as of 2003.Aerospace systems
Encompassing military aircraft, conventional missiles, and military satellites, this is the most technologically advanced sector of the market. It is also the least competitive from an economic standpoint, with a handful of companies dominating the entire market. The top clients and major producers are virtually all located in the western world and Russia, with the United States easily in the first place. Prominent aerospace firms include Rolls-Royce, BAE Systems, Saab AB, Dassault Aviation, Sukhoi, Mikoyan, EADS, Leonardo, Thales Group, Lockheed Martin, Northrop Grumman, RTX Corporation, and Boeing. There are also several multinational consortia mostly involved in the manufacturing of fighter jets, such as the Eurofighter. The largest military contract in history, signed in October 2001, involved the development of the Joint Strike Fighter.Naval systems
Several of the world's great powers maintain substantial naval forces to provide a global presence, with the largest nations possessing aircraft carriers, nuclear submarines and advanced anti-air defense systems. The vast majority of military ships are conventionally powered, but some are nuclear-powered. There is also a large global market in second-hand naval vessels, generally purchased by developing countries from Western governments.Cybersecurity
The cybersecurity industry is expected to be of increasing importance to defense, intelligence, and homeland security agencies.International arms transfers
Over time
2010–2014
According to research institute SIPRI, the volume of international transfers of major weapons in 2010–14 was 16 percent higher than in 2005–2009. The five biggest exporters in 2010–2014 were the United States, Russia, China, Germany, and France, and the five biggest importers were India, Saudi Arabia, China, the United Arab Emirates, and Pakistan. The flow of arms to the Middle East increased by 87 percent between 2009–13 and 2014–18, while there was a decrease in flows to all other regions: Africa, the Americas, Asia and Oceania, and Europe.2014–2018
SIPRI has identified 67 countries as exporters of major weapons in 2014–18. The top 5 exporters during the period were responsible for 75 percent of all arms exports. The composition of the five largest exporters of arms changed between 2014 and 2018 and remained unchanged compared to 2009–13, although their combined total exports of major arms were 10 percent higher. In 2014–18, significant increases in arms exports from the US, France and Germany were seen, while Chinese exports rose marginally and Russian exports decreased.In 2014–18, 155 countries imported major weapons. The top 5 recipients accounted for 33 percent of the total arms imports during the period. The top five arms importers – Saudi Arabia, India, Egypt, Australia, and Algeria – accounted for 35 percent of total arms imports in 2014–18. Of these, Saudi Arabia and India were among the top five importers in both 2009–13 and 2014–18.
In 2014–18, the volume of major arms international transfers was 7.8 percent higher than in 2009–13 and 23 percent higher than that in 2004–08. The largest arms importer was Saudi Arabia, importing arms primarily from the United States, United Kingdom, and France. Between 2009–13 and 2014–18, the flow of arms to the Middle East increased by 87 percent. Also including India, Egypt, Australia, and Algeria, the top five importers received 35 percent of the total arms imports, during 2014–18. The five largest exporters were the United States, Russia, France, Germany and China.
Post-2018
Imports of major arms by states in Europe increased by 155 per cent between 2015–19 and 2020–24, while the global volume of international arms transfers decreased marginally, by 0.6 per cent. The five largest arms importers in 2020–24 were Ukraine, India, Qatar, Saudi Arabia and Pakistan, while the five largest arms exporters were the United States, France, Russia, China and Germany.World's largest arms exporters
The following are estimates from the Stockholm International Peace Research Institute's Arms Transfers Database.| 2020-2024 rank | Exporter | Share of global arms exports |
| 1 | 43 | |
| 2 | 9.6 | |
| 3 | 7.8 | |
| 4 | 5.9 | |
| 5 | 5.6 | |
| 6 | 4.8 | |
| 7 | 3.6 | |
| 8 | 3.1 | |
| 9 | 3.0 | |
| 10 | 2.2 |
File:Sgraffite marchand d' Armes.jpg|thumb|upright=1.35|Sgraffito at the Lambert Sevart weapons factory, in Liege
While Russian, Chinese and German arms exports fell from 2015-2019, US and French arms exports rose. The top 25 arms exporters accounted for 98 per cent of the world’s arms exports in 2020–24. States in North America and Europe together accounted for 87 per cent of all arms exports in the period. The five largest exporters in Western Europe supplied around one quarter of total global arms exports in 2020–24.