Global Defence Spending and Procurement Trends in 2024: A Shift Toward Agility, Innovation, and Strategic Readiness

Image Credentials: Image Title: Global Defence Spending and Procurement Trends in 2024: A Shift Toward Agility, Innovation, and Strategic Readiness Source: (sora.chatgpt) Date: July 2025  Attribution: Created by AI-generated imagery (sora.chatgpt), it does not depict a real-world scene.

By Open Chronicle Staff 

In 2024, global defence spending reached an unprecedented USD 2.46 trillion, reflecting a 7.4% real-terms increase from the previous year. This surge highlights the deepening concerns over global security and the rapid transformation of the defence-industrial complex in response to intensifying geopolitical threats, including Russia’s war in Ukraine, heightened tensions in the Asia-Pacific, and expanding conflicts in the Middle East.

A Recalibrated Defence-Industrial Base

For decades, the defence procurement model in NATO states and beyond had been focused on long-term production cycles and peacetime stockpiling. However, Russia’s aggression in Ukraine exposed the vulnerabilities of diminished post-Cold War stockpiles. The modern security environment demands fast, scalable, and adaptive production systems, leading to a shift toward hybrid models combining traditional manufacturing with novel technologies.

Emerging players, particularly defence-focused start-ups, are leading the charge in transforming procurement. These entities embrace automation, modularity, and additive manufacturing (3D printing) to reduce costs, improve agility, and meet rapid demand surges.

Key Innovations in Defence Production

Anduril Industries exemplifies this disruptive approach. With a USD 14 billion valuation and a USD 1.5 billion investment round in 2024, the start-up announced “Arsenal-1,” a cutting-edge production facility nearly as large as the Pentagon. Its focus on commercially sourced components, modularity, and minimal part complexity is set to revolutionize traditional defence production.

Anduril is not alone. Divergent Technologies, partnering with General Atomics, is investing in 3D-printed UAV structures. Pratt & Whitney and Rolls-Royce are developing turbojet engines and small engines using unitized 3D printing methods, aiming to drastically cut parts and costs. These techniques not only improve efficiency but also shorten supply chains and enable faster adaptation on the battlefield.

Meanwhile, Ukraine has embraced 3D printing for UAVs and munitions, demonstrating how small and under-resourced nations can use innovation to maintain resilience in prolonged conflict.

Software as a Core Capability

Modern defence systems increasingly depend on sophisticated software to enable AI-driven targeting, data integration, and adaptive battlefield operations. Companies like Palantir Technologies, now a primary US Army systems integrator, are central to developing platforms like the Tactical Intelligence Targeting Access Node (TITAN). These platforms leverage machine learning to fuse data from satellites, drones, and ground assets.

Anduril’s “Arsenal” concept integrates software into the manufacturing process itself, allowing synchronized design, testing, and production phases. Yet, reliance on proprietary systems raises concerns around interoperability and cybersecurity, which are becoming essential dimensions of modern warfare.

Saab, a legacy defence company, has echoed the need for transformation, moving toward a “software factory” model to streamline development across programs.

Global Spending and Regional Shifts

From 2022 to 2024, global military spending as a share of GDP increased from 1.59% to 1.94%. All regions except Sub-Saharan Africa experienced growth.

• Russia increased its defence spending by 41.9% in 2024, reaching USD 145.9 billion.

• Germany became the world’s fourth-largest defence spender, with a 23.2% real-terms growth.

• Poland moved from 20th to 15th globally, driven by extensive modernization.

• China maintained 7.4% growth in its defence budget, even as its regional share declined.

• Europe, collectively, now spends over 50% more than it did in 2014.

Europe’s Defence Industrial Revival

In response to the Ukraine war and broader strategic imperatives, European nations are rebuilding their armoured and mechanised forces. Countries such as Lithuania, Italy, and the Netherlands are investing heavily in main battle tanks (MBTs), infantry fighting vehicles (IFVs), and wheeled combat platforms.

However, efforts to regenerate capability face obstacles. Suppliers report shortages in critical components like electronics and armour steel, as well as regulatory hurdles for expanding production facilities.

Ammunition and Munitions Production Surge

One of the most urgent challenges facing Europe has been increasing the supply of 155mm artillery rounds, a critical need in Ukraine.

• Rheinmetall boosted production tenfold, aiming for one million rounds annually by 2026.

• KNDS, Nammo, and BAE Systems have ramped up their production capabilities.

• The EU’s 2023 Act in Support of Ammunition Production allocated targeted funding to push total EU capacity to 2 million rounds per year by the end of 2025.

Yet, Europe remains reliant on non-European sources for key materials, such as Chinese nitrocellulose, underscoring vulnerabilities in strategic supply chains.

Diversification of Suppliers

As European states race to modernize, suppliers from South Korea, Israel, and Brazil are playing pivotal roles.

• Poland has led the way with USD 16.88 billion in contracts with South Korean firms.

• Israel secured over USD 6.85 billion in contracts, primarily with Germany for the IAI Arrow 3 missile defence system.

• Embraer’s KC-390 has been adopted by five European nations since 2019.

While some argue for European defence industrial autonomy, the urgency of modernisation has led many nations to prioritize immediate capability gains through non-European suppliers.

Defence Strategy in Transition

In October 2024, the US Department of Defense began implementing its Defense Industrial Strategy, prioritizing supply chain resilience, manufacturing flexibility, and rapid prototyping. This aligns with global trends emphasizing readiness, agility, and tech integration.

Despite these advances, traditional defence infrastructure remains critical. For instance, the Pentagon invested USD 15 million under the Defense Production Act to bolster heavy-forging capacity, essential for submarine hulls and large naval systems.

Conclusion

The global defence sector is undergoing a profound transformation. Confronted with new geopolitical realities, it is embracing innovation, speed, and adaptability. While additive manufacturing, AI, and software integration are reshaping how nations produce and field equipment, legacy capabilities like industrial forging and strategic partnerships remain essential.

The fusion of old and new reflects a more holistic approach to readiness—one that acknowledges the complexity of modern conflict and the urgency of adapting to it at both institutional and technological levels. As geopolitical tensions persist, this hybrid model of defence production will define military preparedness in the years to come.

References 

• International Institute for Strategic Studies. The Military Balance 2024. London: Routledge, 2024.

• Hicks, Kathleen. “America’s Defense Industrial Base Is at a Pivotal Moment.” Remarks at the Center for Strategic and International Studies (CSIS), Washington, DC, February 5, 2024. https://www.csis.org/events.

• Anduril Industries. “Anduril Launches Arsenal-1, a Next-Generation Defense Manufacturing Facility.” Press release, August 22, 2024. https://www.anduril.com/newsroom.

• Gold, Daniel. “Remarks at MAFAT Advanced Manufacturing Seminar.” Israel Ministry of Defense, November 2024. https://www.mod.gov.il/MAFAT.

• U.S. Department of Defense. National Defense Industrial Strategy Implementation Plan. Washington, DC: DoD, October 2024. https://www.defense.gov/publications.

• Palantir Technologies. “Palantir Awarded $178M Contract for U.S. Army TITAN Program.” News release, March 2024. https://www.palantir.com/newsroom.

• Rolls-Royce. “Additive Manufacturing in the Orpheus Engine Demonstrator.” Press release, June 2024. https://www.rolls-royce.com/media.

• Pratt & Whitney. “TJ-150 Engine Innovations through 3D Printing.” RTX Corporation, 2024. https://www.rtx.com/news.

• European Defence Agency. European Ammunition Production and Capacity Report 2024. Brussels: EDA, June 2024.

• European Union. Act in Support of Ammunition Production (ASAP). Brussels: European Commission, 2023. https://eur-lex.europa.eu.

• Stockholm International Peace Research Institute (SIPRI). “World Military Spending Reaches $2.46 Trillion in 2024.” SIPRI Fact Sheet, April 2025. https://www.sipri.org/publications.

• Saab Group. “CEO Micael Johansson on Software and Defence Transformation.” Investor Update, October 2024. https://www.saab.com/investors.

• General Atomics. “Advanced Air-Launched Effects Successfully Demonstrated from MQ-20 Avenger.” News release, November 2023. https://www.ga.com/news.

• NATO. Defence Expenditure of NATO Countries (2014–2024). Brussels: NATO Public Diplomacy Division, July 2024. https://www.nato.int.

• Nammo. “Increasing Ammunition Production to Support European Defence.” News update, February 2024. https://www.nammo.com/news.