The United States remains by far the largest player in global defense, but that dominance is expected to wane over the next eight years, according to analysis by IHS Jane's Defence.
"Two things are happening: Budgets are shifting East, and global arms trade is [seeing] increasing competition," said Paul Burton, senior manager of IHS Jane's defense forecast. "This is the biggest explosion in trade the world has ever seen."
The trade is booming. The report says trade grew from $56 billion in 2008 to $73 billion last year, much higher than previously thought: "At this rate, defense trade between countries will have more than doubled by 2020."
However, the landscape is shifting. "The West's edge on technology will erode this decade as Asia outspends the USA and Europe," the report said. "(The) rise of Asia Pacific exports threatens US dominance of global defense industry."
While the Pentagon cuts spending, China's defense budget has grown 64 percent in four years to $207 billion, and Russia's has grown 80 percent to $106 billion, according to the analysis.
The United States continues to dominate the export market, with 39 percent share, more than twice the No. 2 player—Russia—which has 15 percent.
The largest export programs are military aircraft, "the hardest segment to develop locally." That is the primary reason the largest supplier in the global market is Lockheed Martin. IHS Jane's said Lockheed's exports jumped 65 percent in four years to $6.4 billion. Boeing is in second with $5.6 billion in export sales last year, followed by Russia's United Aircraft ($4 billion), Raytheon ($3.7 billion), and BAE Systems ($3.7 billion).