Pressure for Affordable Defense Spending: Taylor

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Nov. 26 (Bloomberg) -- Trevor Taylor, Research Fellow of Defence at the Royal United Services Institute, discusses worldwide military spending and the possible impact by the Iran, U.S. nuclear agreement. He speaks on Bloomberg Television's “The Pulse.” (Source: Bloomberg)

To the stories we have been covering the last few days.

I. when you look at where defense spending is likely to be, clearly, the u.s., the defense budget is going to be significant.

Companies are looking for a big pickup in the gulf and asia.

Is iran going dampen those expectations?

Do we see a peace dividend come there you go?


i think it is positive and encouraging.

It is just the first step.

It will be a long time.

The rivalries between iran and the arab companies are decades, centuries old and will not go away.

When you look at what expectations are going to be going forward, the clear expectation is that the defense budgets both in north america and western europe are going to go down.

How much are the middle east, the d.c.c. and asian buyers like south korea going to be able to compensate?

Many of these countries in asia want their own defense industries.

How do you penetrate those markets?

Do you envest?

How do you actually get into these markets in ways that the asian country also -- will find acceptable.

It is going to be the packages around them.

You have had a big export deal, a big offset deal.

You haven't seen these industries stepping up, though.

You don't see a significant aerospace sympathy the middle east and asia as well.

Asia is slightly doimpt the middle east.

The south korean ambitions are very clear.

They brought their trainer aircraft over and showed off how well it would perform.

I think south korea, india, these are very different markets to markets in the gulf.

Even in the gulf, they are interested in industrial development.

They are looking beyond oil.

Anyway company that can offer them a similar -- is in a good position.

How do the companies stay ahead of the game when you look at the recent deals done with south korea, get vrg close to buying f-35's? a much more advanced aircraft to the f-15, f-16. how much sort of capability is there within the north american industry and the european industry to stay ahead over the curve?

How defense technology is going is a fascinating and long-standing equipment.

Tpwhe the west can afford only small numbers.

These are the questions affecting the new markets in asia.

Initially, south korea, the typhoon and the f-35 exceeded the budget they made available.

They are having to rethink about what they are going to do in order to get the technology that they want.

So i think we have an interesting question about whether or not there is going to be a move towards more affordable technology, perhaps in the u.a.v. area.

The u.a.v. area in aerospace is relatively mature and i think there could well be pressure to put on companies to produce affordable systems.

There is a debate in the u.s. about whether they can go for a low-tech aircraft which will operate on the assumption that a few expensive aircraft to make our air space safe.

The question where we're going with technology and defense is not necessarily that we're going to continue on the same path because the same path is made of more and more expensive systems.

Europe has a drone program but still has a series of aircraft manufacturers.

You have b. a, e. systems.

Too many aircraft makers.


I think that is why they recognize that if you like the aircraft front, we need to have something similar to what it has been moving towards pretty much there in the weapons area.

Nbda has brought together most of europe's aircraft ability.

Unfortunately 1980's, we missed the chance for an integration of british and french and german combat air and of course the swedes only decided soon after that that they would sort of give up their ambitions for industrial autonomy.

All of those aircraft are very good acraft.

As we move into the drone arena and we have a project that is looking like it has got legs here in europe, it is almost massive that we have all of o these aircraft manufacturers?

There is a possibility of almost pressing the restart button on these industries.

People just don't know how emergency operations are going to develop.

It is possible that many of the roles will be taken over.

They will be operating on very different price codes.

The most sophisticated aircraft are the same prices it is a manned aircraft.

What about the areas underneath?

You perhaps wouldn't worry so much about losing a system because it doesn't have a person onboard.

We'll have to leave it there.

Francine, back over to you.

Now this is what is coming up.

Brazil is gearing up for the spotlight as it prepares to host

This text has been automatically generated. It may not be 100% accurate.


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