THE Stockholm International Peace Research Institute (Sipri), the world’s leading think-tank tracking global military expenditure, on Dec. 2 released new data on revenues earned by the 100 largest companies dealing in weaponry and military services. What’s that got to do with Travel & Tourism? Everything.
The shocking statistics and trends unveiled in the report show clearly that global wars and conflict, led by the ongoing hot wars in Ukraine and the Middle East, plus simmering tensions in Asia, have now become a mainstream business, an economic driver, job creator and generator of corporate shareholder value. They all but guarantee that there will be no global peace for at least another decade.
Consider the implications for the future of Travel & Tourism, the so-called “Industry of Peace.”
The Sipri top 100 arms-producing and military services companies, 2023
Lorenzo Scarazzato, Nan Tian, Diego Lopes da Silva, Xiao Liang and Katrina Djokic
Here are some key points of the report, for the benefit of tourism policy- and decision-makers who have the sense to recognise the looming risks and threats, and the wisdom to start asking relevant questions (such as those which follow later in this post).
(+) Revenues earned by the 100 largest companies selling weapons and military services reached $632 billion in 2023, a real-terms increase of 4.2% compared with 2022. Arms revenue increases were seen in all regions, with particularly sharp rises among companies based in Russia, Israel, Korea and Japan. Note that this figure only covers the Top 100 companies. If more companies are added, the figure would be vastly higher.
(+) US-based companies are the biggest beneficiaries, comprising 41 of the companies in the Top 100. They recorded arms revenues of $317 billion, half the total arms revenues of the Top 100 and 2.5% more than in 2022. Since 2018, the top five companies in the Top 100 have all been based in the USA.
Figure 3. Share of the total arms revenues of companies in the Sipri Top 100 for 2023, by country
Note: The Top 100 classifies companies according to the country in which they are headquartered. This means that the arms revenues of an overseas subsidiary are counted towards the total for the parent company’s country. The Top 100 does not encompass the entire arms industry in each country covered, only the largest companies. The category ‘Other’ consists of countries whose companies’ arms revenues comprise less than 1.0% of the total: Canada, Czechia, Norway, Poland, Singapore, Spain, Sweden, Taiwan, Türkiye and Ukraine. Percentage shares may not add up to a total of 100% due to rounding.
Source: SIPRI Arms Industry Database, Dec. 2024.
Annex 1. The Sipri Top 100 arms-producing and military services companies in the world, 2023 Revenue figures are in millions of constant (2023) US dollars and are rounded to the nearest $10 million.
(+) The figures for 2024 are expected to be even higher, thanks to the intensified conflicts. According to Lorenzo Scarazzato, a researcher with the Sipri Military Expenditure and Arms Production Programme, “The arms revenues of the Top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales.”
(+) Large companies like Lockheed Martin and RTX (formerly Raytheon) recorded a drop in revenues, not due to lower demand but because their range of products includes aeronautics and missiles which often depend on complex, multi-tiered supply chains, making them more vulnerable to supply chain challenges in 2023, according to Dr. Nan Tian, director of Sipri’s Military Expenditure and Arms Production Programme.
(+) The combined arms revenues of the 27 Top 100 companies based in Europe (excluding Russia) totalled $133 billion in 2023. This was only 0.2% more than in 2022, the smallest increase in any world region. However, the Sipri data pointed out, European arms companies produce complex weapon systems which have longer lead times. As a result, they were mostly working on older contracts during 2023 and their revenues for 2023 do not reflect the influx of orders.
(+) Demand linked to the war in Ukraine has benefitted companies in Germany, Sweden, Ukraine, Poland, Norway and Czechia, particularly for ammunition, artillery and air defence and land systems. For instance, Germany’s Rheinmetall increased production capacity of 155- mm ammunition and its revenues were boosted by deliveries of its Leopard tanks and new orders, including through war-related ‘ring-exchange’ programmes (under which countries supply military goods to Ukraine and receive replacements from allies).
(+) The two Russian companies listed in the Top 100 saw their revenues increase by 40% to reach an estimated $25.5 billion. This was almost entirely due to the 49% increase recorded by Rostec, a state-owned holding company controlling many arms producers, including seven previously listed in the Top 100 for which individual revenue data could not be obtained. The Sipri report admits that the actual figures are much higher and the continued Russian offensive in Ukraine has required increased production of combat aircraft, helicopters, UAVs, tanks, munitions and missiles.
(+) 23 companies in the Top 100 are based in Asia and Oceania. They recorded 5.7% revenue growth, to reach $136 billion. Four South Korea-based companies recorded a combined 39% increase to reach $11.0 billion. Five Japanese companies rose by 35% to $10.0 billion. A policy of military build-up in Japan since 2022 drove a flurry of domestic orders, with some companies seeing the value of new orders increase more than 300%. South Korean firms are also trying to expand their share of the global arms market, including demand in Europe related to the war in Ukraine.
(+) Six of the Top 100 arms companies were based in the Middle East. Their combined arms revenues grew by 18% to $19.6 billion. Due to the war in Gaza, revenues of the three companies based in Israel in the Top 100 reached $13.6 billion. This was the highest figure ever recorded by Israeli companies in the Sipri Top 100. Israeli arms producers are booking many more orders as the war in Gaza rages on and spreads. The three companies based in Türkiye saw their arms revenues grow by 24% to $6.0 billion, benefiting from exports prompted by the war in Ukraine and from the Turkish government’s continued push towards self-reliance in arms production.
CAPTIONS:
Top: This handout photo courtesy of the US Department of Defence taken on Dec. 14, 2021 shows the US Army conducting live fire tests of the Army Tactical Missile System (ATACMS) at the White Sands Missile Range in New Mexico. Photo: AFP/John Hamilton/DoD and published by CNA
Front Page: Thick smoke and flames erupt from an Israeli airstrike on Tayouneh, Beirut, Lebanon, on Friday, Nov. 15, 2024. Photo: AP/Hassan Ammar and published by CNA
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