COVID-19 is spreading at an unprecedented rate globally. Supply-chain cycles of a majority of the industries have been significantly hit. While some of these industries such as FMCG, pharmaceuticals, insurance, and many more, are expected to recover soon, however, certain sectors such as aviation, automobile, tourism, oil and gas, defense, and others, are anticipated to take longer to come out of the crisis.

Following are some of the questions that the defense industry analysts at BIS Research answered on major concerns of the impacts of coronavirus on the defense industry.

Q: How has the pandemic influenced production facilities and supply chains in the defense industry?

A: Although majority industries have suffered an imbalance in their global supply and demand cycle, the short-term contracts in the defense industry are expected to suffer a greater impact. Due to the government-to-government (G2G) links, long-term contracts, and extensive testing and assessment of defense equipment, the probability of this pandemic impacting the existing business deals is low. Industry experts have been comparing the impacts of this pandemic with the global financial crisis of 2008, and have predicted that the sector is expected to regain its momentum by 2023 while maintaining a low profile over the next five years.

Regions such as North America and Europe are expected to suffer more than the rest of the world, due to the greater intensity of coronavirus outbreak and limitations on the import and export of raw materials and military equipment in these regions.

Q: Given the increased spending on the healthcare infrastructure, are governments around the world deprioritizing their spending and budgets on defense and military?

A: In these times of global crisis, countries are focusing on improving their healthcare infrastructure and increase their supply of medical supplies to meet the needs of the population. Due to this attempt, several countries are working on cutting their defense expenditure and withdrawing their short-term contracts and demand orders for military equipment. The global defense spending fell by 9% or $110 billion between the years 2010 and 2013 as the result of post-crisis reductions. As of now, the coronavirus outbreak is expected to result in a fall of 4% or $60-70 billion in the global spending for defense. Among the NATO members, the overall spending on defense is expected to drop down by $120 billion. In European nations such as Greece, Italy, Portugal, and Spain, debt and budget constraints are estimated to scale the severe impact on this industry.

Q: How are companies in the defense and aerospace sector responding to the coronavirus pandemic and helping the healthcare industry?

A: Several manufacturing companies around the world are coming together to provide immediate assistance for medical supplies in their own way. For instance, Lockheed Martin has initiated the production of personal protective equipment, and face shields apart from providing engineering support for initiatives to accelerate the personal protection equipment (PPE) production. The Defense Research and Development Organization (DRDO) in India is aiming to manufacture PPE and five-layered N99 face masks and is producing approximately 200,000 masks every week.

Additionally, governments are also invoking laws for utilizing the production lines of companies to provide the necessary medical equipment. US President Donald Trump has recently invoked the Defense Production Act, which directs the companies to facilitate the supply of ventilators and other medical equipment required during the treatment. Several companies, such as General Electric, Hill-Rom Holdings, Medtronic, Resmed, Royal Philips, and Vyair Medical, have been instructed to assist in the supply of ventilator materials. Even the Israeli Defense Ministry has announced the initiation of manufacturing ventilators with the Israel Aerospace Industries and Inovytec, a medical firm. Several companies that manufacturing rockets and satellites such as SpaceX, Virgin Orbit, and Blue Origin, have also started to produce medical devices and protective equipment in response to the shortages in hospitals across the United States.

Q: Do we have any next-generation or smart technology that can be utilized for fighting against this novel coronavirus?

A: International organizations such as the United Nations and countries all across the globe are looking for innovative ways and technologies that might help in minimizing the impact of this pandemic on human lives. In this attempt, companies are modifying the existing novel technologies and equipment to be used in these times of global crisis. Thermal-imaging cameras, which are utilized to detect heated areas during firefighting, can be installed at airports and public facilities to monitor the body temperatures of people visiting these areas. Unmanned devices, such as robots and drones, can also be considered for spreading public awareness, transferring medical supplies and daily needs, and maintaining sanitation in quarantine facilities. Also, such surveillance techniques can be helpful in keeping track of global coronavirus hotspots.

To know more about the impact of COVID-19 on various sectors, explore the COVID-19 Resource Center, and stay updated on the related information.