The global military synthetic and digital training solution market size was valued at USD 11,847.1 million in 2022. It is estimated to reach USD 24,896.7 million by 2031, growing at a CAGR of 8.6% during the forecast period (2023–2031).
Military simulation and training exercises have always been of utmost importance to countries across the globe as the demand for mission readiness of their armed forces also keeps on increasing. Over the past years, significant developments in military simulations have resulted in growing interest and escalating demand for advanced simulation systems for different military platforms, such as airborne, ground, and naval.
The term military synthetic and digital training solution refers to various military simulators and synthetic training environments (STE) created by companies worldwide to reduce the cost and mitigate the difficulties associated with live training sessions. In addition, synthetic and digital military training solutions enable clients to promptly deliver new levels of mission readiness through technology-enabled learning and training, cyber warfare, game-based exercises, and role players that simulate actual combat scenarios. Globally, the military synthetic and digital training solution technologies and products have been widely applied in various military verticals.
There has been a remarkable increase in military budget allocation toward research and development within the market. Several defense organizations, in association with major companies, are improving the experience, level of immersion, and fatality of military simulators. In addition, individual researchers and small organizations also play a vital role in driving the R&D operations within the market. More than 2,000 patents were filed, encompassing various aspects of military simulation and virtual training between January 2020 and July 2021.
Furthermore, major military organizations across the globe are collaborating with research or educational organization to accelerate their R&D process. For instance, the U.S. Army stated in June 2021 that it would work with the Universities of Maryland at College Park and Baltimore County to use artificial intelligence across several military force areas. With further funding for future studies, the academic researchers would collaborate with the U.S. Army Combat Capabilities Development Command (DEVCOM) and Army Research Laboratory on an initial 18 projects, each supported by a group of faculty, staff, and students. These aspects are anticipated to fuel market expansion.
The need for virtual simulations and training environments has significantly increased in recent years. The primary factor accelerating the demand for virtual training is the ability to access better training data, reduce training costs, increase training efficiency, reduce dependency on other government bodies, and increase safety. The onset of COVID-19 has also positively impacted the global market to a certain extent. The imposition of global lockdown, the need to maintain social distance, and increasing international tension due to economic degradation have generated an environment where military readiness is of utmost importance. However, the gathering was impossible due to the pandemic, eventually causing the demand for virtual simulators and synthetic environments, propelling the market growth.
The military synthetic and digital training simulators have a high production cost, incurring several technologically enhanced pieces of equipment that provide a highly immersive training experience. High bandwidth network and power consumption add to its high operational price. This is undoubtedly a significant challenge in high-fidelity aviation simulators. Likewise, continuous integration of new technologies and frequent software updates to improve simulation quality increases the cost of the system and operations.
Furthermore, the regular launch of upgraded versions has resulted in the low operational efficiency of older versions. Establishing the training facilities for these simulators is an entirely different challenge that encompasses several fixed and variable costs related to simulators. Therefore, the systems' high production and deployment cost is estimated to restrict the market expansion over the forecast period.
The rise in military moments across the globe due to increasing geopolitical conflicts and the requirement of armed forces to guard their borders through continuous rotation of shifts do not receive the luxury of staying in one place. There is a dire demand for remote training solutions to cope with training and simulation in a tight schedule. Though many industry participants offer remote training solutions, the used cases for these solutions are for simple tasks such as using a gunnery mechanism through military simulation. Similarly, remote training solutions, like high-fidelity aviation simulators, are less immersive and must provide a detailed training experience. It is a tremendous untapped market for companies operating within the global military and digital solution market to tap the increasing market opportunity.
The global military synthetic and digital training solution market is bifurcated into type, business model, component, immersion technology, and application.
Based on type, the global military synthetic and digital training solution market is bifurcated into aerial simulators, naval simulators, ground simulators, and cyber.
The aerial simulators segment dominates the global market and is projected to exhibit a CAGR of 9.67% over the forecast period. The increasing involvement of government players and global organizations toward the modernization of existing aerial simulations and the establishment of substantial aerial training and simulation facilities by industry players is supporting the market growth, followed by health competition. Developing new technologies and providing proprietary solutions is vital to increasing the market share within the aerial simulator segment.
Based on the business model, the global military synthetic and digital training solution market is bifurcated into direct purchase and pay-as-services.
The direct purchase segment owns the highest market share and is predicted to exhibit a CAGR of 8.71% during the forecast period. The direct purchase model is mainly practiced when acquiring ground-based and combat simulations. These simulations are comparatively more economical than aerial and marine simulations and are required in bulk quantities. Likewise, these simulators are hardware intensive and only require complex software integration once integrated to operate in cross-domain functionalities. Reducing the cost of simulators and bulk purchases are the primary factors supporting the segment's growth.
Based on components, the global military synthetic and digital training solution market is divided into hardware and software.
The hardware segment contributes to the highest market share and is predicted to exhibit a CAGR of 9.01% over the forecast period. The hardware sub-segment of the component within the market is segregated as displays, motion trackers and sensors, batteries, load-bearing vests, training weapons, and external structures. With technological advancements in optical and electronic sensors, shrinking components, and lower-cost electronic hardware, the growing need to integrate additional sensors and receivers inside the simulation system will boost market demand.
Based on immersion technology, the global military synthetic and digital training solution market is divided into partially immersed and fully immersed.
The partially immersed segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 8.79% over the forecast period. Partially immersed simulators are the type of simulator where the simulation quality approximates what soldiers experience in a live environment. These types of simulators are capable of simulating sight, sound, and touch modalities. These simulators are used in ground training and vehicle maneuvering exercises where a highly immersive environment is not required. The African countries and others having limited military resource allocation also prefer simulators providing partially immersed simulation.
Based on application, the global military synthetic and digital training solution market is bifurcated into combat and personnel training, leadership and skill assessment, MRO training, and medical training.
The combat and personnel training segment owns the highest market share and is predicted to exhibit a CAGR of 9.75% over the forecast period. The combat and training segment is further divided into subsegments: personnel training, aircraft, vehicle, and vessel. The aircraft segment will capture the highest market share due to the rising demand for manned and unmanned aircraft simulators. Rising training requirements for personnel training and aircraft are the major market factors, allowing the segment to capture the highest market share. Further, increasing requirements to renew the existing contracts for training and simulation by major countries across the globe are generating long-term market opportunities.
Based on region, the global military synthetic and digital training solution market is bifurcated into North America, Europe, Asia-Pacific, and Rest-of-the-World.
North America is the most significant global military synthetic and digital training solution market shareholder and is estimated to exhibit a CAGR of 9.98% over the forecast period. North America region comprises the regional markets of the U.S. and Canada. The global market is dominated by the U.S., with massive investments and revenue expected to be generated from the several industry players operating within the vertical market. In addition, the demand for uninterrupted high-speed, high-fidelity simulation will likely rise in the coming years. The companies operating within the domain provide innovative products and solutions to meet market needs.
Furthermore, the growth of the technology is anticipated to create new markets to expand its operations and develop innovative, cost-effective solutions. The increasing defense budget allocation of the U.S. and the nation with one of the most robust and advanced military capabilities is one of the market accelerators. The U.S. alone contributes to more than 30% of the global defense expenditure. Similarly, investments and monetization done by government bodies of North America toward the research and development of advanced simulators will help generate market opportunities.
Asia-Pacific is anticipated to exhibit a CAGR of 9.62% over the forecast period. The major trend in the Asia-Pacific market is the onset of fifth-generation communication networks, resulting in high latency and bandwidth supporting immersive simulation experiences and increasing indigenous simulation development. In addition, government organizations promote small-scale businesses and start-ups within the military environment, which will help the market growth in the Asia-Pacific region. Limited regional players within the industry with a vast customer base make this region a lucrative marketplace for global players. The countries in the Asia-Pacific region have the workforce and resources to develop mass manufacturing capabilities. The region will witness notable growth with increasing expenditure toward military modernization and training, with countries like India and China demonstrating top military capabilities. Lucrative government initiatives of FDI toward the aviation and space sectors are also significant market accelerators.
Europe has a presence of companies such as Reiser Simulation and Training (RST) and Indra Sistemas, which are essential in defining the military simulation and training market. European companies focus on developing advanced simulation systems on a closed network to mitigate cybersecurity threats. The presence of various European associations to support the mass acquisition and sizable business contracts is the primary factor supporting the market competitiveness within the region. In addition, the presence of the ETSA has created a massive market for the military simulation industry in Europe. The European Training and Simulation Association (ETSA) provides a unified voice to the required European committee and corporates at an international level. With increased company investments in developing new technologies, the scope for developing advanced systems is high. Countries like Russia and Germany, with notable defense budget allocations, will also positively impact the market.
The Rest-of-the-World includes Latin America and the Middle East and Africa. The growth rate in Latin America is also low due to the transfer in fund allocation from military expenditure to medical expenses due to COVID-19. This region needs more financial resources for defense sectors, limiting the business potential. In addition, the Middle East will cater to a substantial market share due to the allocation of funds toward acquiring new military technologies. The continuous state of contradiction between several nations of the Middle East poses a requirement to have their military forces combat-ready at all times, supporting the market requirements. Although Africa has the required raw materials, it has budgetary constraints in procuring and developing the products. With the help of private players, Africans can develop products by using their vast resources of raw materials. This could be one of the driving forces for the companies to invest in this region in the future.
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