According to Fortune Business Insights™, the global smart weapons industry was valued at USD 18.99 billion in 2023 and is projected to expand from USD 20.20 billion in 2024 to USD 45.24 billion by 2032, registering a CAGR of 10.61% during the forecast period. Growth is driven by rising global defense budgets, increasing military modernization programs, and the growing demand for precision strike capabilities in modern combat environments.
The global defense landscape is rapidly evolving, shaped by geopolitical tensions, cross-border disputes, and asymmetric warfare. Militaries are prioritizing precision, flexibility, and reduced collateral damage, which has accelerated the adoption of smart weapons systems worldwide.
Smart weapons—including guided bombs, cruise missiles, directed-energy weapons, and satellite/laser-guided systems—provide superior accuracy, extended operational range, and improved mission success rates compared to conventional arms.
In 2023, North America led the market with a 33.86% share, supported by high U.S. defense spending and the presence of leading contractors such as Lockheed Martin, Northrop Grumman, and Raytheon Technologies.
Increasing Need for Precision Weapons
Rising warfare activities and cross-border disputes are boosting the demand for highly accurate and cost-effective weapons. Precision-guided systems offer enhanced range, minimal training requirements, and higher mission efficiency.
Surging Defense Budgets
Defense spending continues to rise globally. For example, the U.S. allocated USD 732 billion in 2020, while China, India, Russia, and Saudi Arabia collectively invested hundreds of billions more. These budgets directly support procurement of advanced smart weapons.
Modernization Programs
Ongoing replenishment and modernization initiatives are driving contracts for advanced systems. In March 2020, Raytheon Technologies signed a USD 110 million contract with the U.S. Navy to upgrade radar-guided gun systems.
https://www.fortunebusinessinsights.com/smart-weapons-market-104058
Stringent Regulations
Strict firearm and weapons regulations in countries such as India, New Zealand, Australia, and the U.K. hinder market growth. For instance, New Zealand banned semi-automatic weapons in 2019 after the Christchurch attacks.
By Product:
The missiles segment is projected to dominate the guided weapons market, driven by increasing defense budgets and the strategic need for advanced long-range precision strike capabilities. These systems are crucial for modern military operations, providing accuracy, speed, and lethality. Munitions are expected to record the highest growth rate, as militaries worldwide increasingly adopt precision-guided bombs and artillery shells to minimize collateral damage during counter-terrorism operations and cross-border conflicts. Additionally, segments such as guided projectiles, guided rockets, and directed energy weapons are experiencing steady adoption due to technological advancements, operational versatility, and integration into modern combat platforms.
By Platform:
The land segment is anticipated to be the fastest-growing, fueled by growing army procurements and modernization programs. Ground forces are investing in next-generation guided missiles, rockets, and munitions to enhance battlefield effectiveness and mobility. Air platforms are also experiencing significant growth, supported by air force modernization initiatives and the deployment of precision air-to-ground weapons that improve strike accuracy and operational efficiency. The naval segment, while holding a moderate share of 23.33% in 2023, is seeing rising interest in directed energy weapons and missile systems to enhance maritime defense capabilities against modern threats, including unmanned surface vessels and incoming missile attacks.