New analysis from IHS Jane’s DS Forecast reveals that as militaries realize and exploit efficiencies gained through new Simulation and Training technologies, new current and future market opportunities have emerged.

1. IHS Jane’s
Analysis: Opportunities in the
Defense Simulation & Training Market
November 2012 ihs.com/jdsf
Introduction
KEY POINTS
The backdrop for the global defense industry today is that
As militaries realize and exploit efficiencies gained through new
of changing and uncertain threat scenarios combined with
Simulation and Training technologies, new market opportunities
tightening budgetary conditions. Responding to these have emerged, particularly in the medium term.
conditions and maintaining a force that is both effective
and prepared presents a major challenge for military
Advancements like these offer powerful solutions to many
leaders. It is critical that resources be used in the most
of the complex readiness and training issues that face
effective way possible to achieve the optimal end result.
militaries around the world.
At the same time, Simulation and Training technology
New analysis from IHS Jane’s DS Forecast reveals that as
continues to advance. For example, increasing fidelity in
militaries realize and exploit efficiencies gained through
the visual display area enables virtual training to be more
new Simulation and Training technologies, new current
immersive and realistic.
and future market opportunities have emerged.
Meanwhile, progress in synthetic environments opens up
greater possibilities to network simulators of different Market Analysis – Key Themes
types in various locations, involving participants from The global Simulation and Training market is projected to
multiple services for distributed mission operations (DMO) grow from approximately $22 billion in 2013 to a peak for
training. the current forecast period of about $23.5 billion in 2016,
© 2012 IHS 1 ihs.com/jdsf

2. IHS Jane’s Analysis: Opportunities in the Defense Simulation & Training Market
before declining over the out years with a 10-year percentage increases to an average of 56%, totaling over
compound annual growth rate (CAGR) of -3.2%. $50 billion.
Looking at the Simulation and Training market in terms of The Simulation and Training market covers a wide range
sales opportunities, however, shows a far more positive of technologies. The largest segment, Military Aircraft, is
picture. While 2016 represents the peak market value in related to specialized training aircraft, representing about
the current forecast window, the percentage of the market 35% of the total value of the blended market over the
represented by Stated and Derived Opportunities1 forecast period.
continues to increase beyond this.
Simulation follows a close second, comprising an average
In 2017, for example, approximately 45% of the Simulation of 33% of the blended market between 2012 and 2021.
and Training market value is comprised of opportunities;
When considering the Simulation market segment, the
but during the last half of the forecast period, that
growth projections are significantly more positive than the
market as a whole, with a 10-year CAGR of around 2%.
1
Stated Opportunities are those in which the contracting authority has Like the Simulation and Training blended market, the
stated that a program will be run; Derived Opportunities are those in which Simulation segment itself shows a great deal of sales
IHS analysts have identified a need based on analysis of current and
emerging threats, capability gaps, budgets and other related factors.
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3. IHS Jane’s Analysis: Opportunities in the Defense Simulation & Training Market
opportunities (an average of 80% of the market value
between 2017 and 2021).
Multirole simulation – comprised of programs covering
more than one functional segmentation category (such as
the FOCUS program discussed above) – is projected to
Some of these opportunities are in the form of large, multi- experience a CAGR of over 7% through the forecast
award contracts. A good example of this is the U.S. period.
Army’s Warfighter FOCUS contract, which involves many
suppliers and covers life cycle contract support services Likewise, the area of simulator support is projected to see
for training devices in addition to related operations, a CAGR of around 4% for the same timeframe.
maintenance and instructional support.
Conclusion
While these types of contracts lend themselves well to The use of simulators and simulations in a training
large businesses, opportunities exist across the spectrum regimen enables trainers to provide instruction for skills
of size and type of defense suppliers. that are costly to teach through live training alone; as a
The two areas within the Simulation market alone that general rule, the cost to practice a skill in a simulator is
most heavily impact the positive CAGR are multirole about 10% of the cost of operating the actual equipment in
simulation and training programs and simulator support a live training situation.
services.
© 2012 IHS 3 ihs.com/jdsf

4. IHS Jane’s Analysis: Opportunities in the Defense Simulation & Training Market
Furthermore, in the safe and forgiving virtual environment,
trainers can present scenarios that would be either too
dangerous or impossible to replicate in live training, and
advanced simulation technology effectively facilitates the
“suspension of disbelief”, increasing the realism of the
training.
All of these factors make simulation a logical growth area
for global militaries, and IHS analysis of the market
strongly suggests that over the coming years this sector
will provide significant increased sales opportunities for
defense contractors.
This analysis draws on market forecasts in the new
Simulation & Training blended market developed for IHS
Jane’s DS Forecast.
© 2012 IHS 4 ihs.com/jdsf

5. IHS Jane’s Analysis: Opportunities in the Defense Simulation & Training Market
About IHS About IHS Jane’s DS Forecast
IHS (NYSE: IHS) is a leading source of information and With over 100 years of history as Jane’s, IHS is the most
insight in pivotal areas that shape today’s business trusted and respected public source of defense and
landscape: energy, economics, geopolitical risk, security information in the world.
sustainability and supply chain management.
IHS Jane’s DS Forecast sets the standard in defense
Businesses and governments around the globe rely on the market forecasting, with expert analysts providing reliable
comprehensive content, expert independent analysis and ten-year views of over 20 key global defense markets that
flexible delivery methods of IHS to make high-impact enable business professionals to understand the shape of
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confidence. profitable growth.
IHS has been in business since 1959 and became a IHS Jane’s DS Forecast represents an invaluable
publicly traded company on the New York Stock business intelligence asset for commercial A&D
Exchange in 2005. Headquartered in Englewood, organizations of all sizes.
Colorado, USA, IHS employs more than 6,000 people in
more than 30 countries around the world. ihs.com/jdsf
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© 2012 IHS 5 ihs.com/jdsf