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NATO C5ISR Market Size, Share & Industry Analysis, By Type (Land, Naval, Airborne, and Space), By Application (Electronic Warfare, ISR (Intelligence, Surveillance, and Reconnaissance), Weapon Systems, Theater Command and Control, Information Security and Assurance, Computing, and Others), By Solution (Hardware and Software and Services), and Country-level Forecast, 2022-2029

Last Updated: May 06, 2024 | Format: PDF | Report ID: FBI106711



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The NATO C5ISR market size was valued at USD 69.50 billion in 2021. The market is projected to grow from USD 73.08 billion in 2022 to USD 110.85 billion by 2029, exhibiting a CAGR of 6.13% during the forecast period. The Russia-Ukraine war impact has been unprecedented and staggering, with the C5ISR experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels but failing to meet high demand due to supply chain disruption. Based on our analysis, the market exhibited a decline of 3.52% in 2020 as compared to 2019.


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C5ISR stands for command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance. It is an extended overall Command and Control (C2) framework that exercises authority, situational awareness, secure encrypted communication, and military directives by designated military commanders to assigned forces for mission accomplishments. C5ISR also assists in the real-time integration combat management and battlefield management systems for the navy and army. It also helps in integrating fire control radar and systems, weapon systems, encrypted communication, electronic warfare, and various network-centric warfare applications.

Adoption of unmanned vehicles, such as Unmanned Aerial Vehicles (UAV), Unmanned Ground Vehicles (UGV), and others, in military applications has increased owing to advanced technology and high investment from governments across the globe. With the increase in usage of unmanned vehicles for military operations, it has become crucial to enhance the communication system of a UAV to improve efficiency and increase the range of the connection.


Economic Impact of Russo-Ukrainian War is Hampering the NATO C5ISR Market Growth

The Russia-Ukraine war initiated in February 2022 affected various industries across the globe. Strict travel bans over the Ukrainian airspace have been announced worldwide. The Russia-Ukraine war has impacted the NATO C5ISR market in 2022.

  • The Russia-Ukraine war increases defense expenditure and strengthens defense forces from NATO countries. Most European countries have increased their defense spending due to Russia’s invasion. Germany increased its defense spending above 2% of GDP and allocated USD 109 billion, which is more than the total defense bill for 2021.

  • The U.S. and NATO intelligence, surveillance, and reconnaissance assets on NATO’s eastern flank provide tactical information to the Ukrainian Air Force. In March 2022, the U.S. and NATO countries provided substantial arms assistance to Ukraine in intelligence support.

  • The U.S. government approved USD 13.6 billion for humanitarian and security assistance. The U.S. will provide USD 800 million in weapons to Ukraine, including anti-aircraft systems, machine guns, small arms, grenade launchers, drones, and anti-armor systems.


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Embracing Cyber Electronic Warfare Technology and IoT and AI in Defense is a Prominent Trend in the NATO C5ISR Market Growth

Military operations depend on electronic and cyber warfare, information, and signals intelligence. These are set to dominate the characteristics of the electromagnetic spectrum. The emerging trend in the market is combining the capabilities of electronic & cyber warfare, information operations, and signal intelligence for both offensive and defensive purposes.

The new conception of cyber-EW can cover a broad range of the electromagnetic environment and cyberspace. Electronic and cyber warfare convergence seamlessly enables the warfighters to gain a strong defense and attack capacity. Due to the political conflicts and wars among rival countries, studying electronic and cyber threats has become essential to building an effective offense and defense.


Growing Cross Border Conflicts Among Different Countries to Drive the NATO C5ISR Market Growth

Different parts of the world, including several countries, witness the border dispute due to disagreement over land possession or control of the area between two or more states. For the past few years, the countries have faced territorial issues, including India, Pakistan, China, Nepal, Bangladesh, Iran, Afghanistan, Bhutan, Taiwan, Israel, Syria, and Russia. These countries are spending a lot of money purchasing command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance systems and solutions to enhance situation awareness by modernizing the patrolling of the border area. For instance, in January 2022, the tensions between Russia and Ukraine led to the war situation. NATO allies have put forces on standby and sent fighter jets and ships to bolster Europe’s eastern defenses due to increasing tensions over Russia’s military buildup near Ukraine.

Modernization of Conventional to Technologically Advanced Military Equipment to Augment NATO C5ISR Market Growth

With the change in warfare tactics and battlefield management, the need to modernize conventional military equipment has increased. Modernization is the key in keeping pace with technological progress on the battlefield. This demand for upgrading is expected to drive the growth of the market. Modernization aims to enhance quality, terminate the capability gap, and decrease the cost. It has been studied that there has been a rise in contracts between key defense companies and the U.S. government for up-gradation of military systems such as tactical radar systems, movable tactics, light weapons, sensor systems, communication, and network technologies, weapon systems, and others.

These factors are expected to fuel the growth of the market. Many countries are focused on upgrading their defense forces. For instance, in 2019, India planned to spend USD 130 billion in the next five to seven years to modernize its armed forces and enhance its combat capabilities.


COVID-19 Pandemic Slowed Down the Trade Activities Hampering Market Growth

The high cost of developing the command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance system is a prime factor hampering the market growth. This ecosystem consists of costly weapon systems and a governing ecosystem. The high installation and maintenance cost of the system restrains the market growth. In the case of the naval industry, the coronavirus outbreak harmed significant businesses across the world's naval platforms. Several companies witnessed significant supply issues, and this effect will continue to affect the maritime industry. 90% of the global trade activities have been carried out overseas.

According to the United Nations Conference on Trade and Development (UNCTAD) report 2020, the coronavirus pandemic led to 3% drop in global trade in the first quarter of the financial year 2020. This development indicates more than a 20% fall in commodity prices and 7.5% fall in the oil prices in March 2020. The direct effect of the COVID-19 pandemic on the naval industry has slowed down the production of naval vessels due to the decreasing demand for naval vessels and slowed down trade activities.


By Type Analysis

Land Segment to Dominate Due to Rising Demand for Military Autonomous Vehicles

The market is divided into land, naval, airborne, and space by type. The land segment dominated the market in 2021 with the largest market share. The rise in adoption of autonomous military vehicles by the U.S. Department of Defense and the presence of key manufacturers in the U.S. are anticipated to fuel the market growth in the U.S.

Airborne segment accounted for the second-largest market share in 2021. The market of NATO C5ISR is projected to grow at a significant CAGR during the forecast period. Rising procurement of small and tactical drones by countries such as Germany, France, and the U.K. to enhance ISR capabilities is expected to aid the market growth in NATO. Furthermore, in the U.S. in 2020, the U.S. DoD invested USD 0.9 billion to procure MQ-4 and MQ-25 Unmanned Aerial Vehicles (UAVs).

The space segment is expected to be the fastest-growing segment with CAGR. The rise in small satellite launches for satellite communication, navigation, and internet connectivity will boost the segment growth. The rising demand for network-centric C5ISR solutions to enhance electronic warfare capabilities boosts the segment growth.

By Application Analysis

High-Density Interconnect Segment to Drive the Market Growth

The market is classified as electronic warfare, ISR (intelligence, surveillance & reconnaissance), weapon system, theater command and control, information security & assurance, computing, and others based on application. The theater command and control segment dominated the market in 2021. This large share is attributed to the expansion of strategic critical infrastructure and infusion of modern naval and air assets in response to theater operational requirements. There are rising investments from NATO countries in command and control systems and improving military capabilities.

The electronic warfare segment held the second-highest market share in 2021. Growing development of command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance and defense-based vital players, such as FLIR Systems, Northrop Grumman Corporation, and Lockheed Martin Corporation, offer various combat operations such as electronic warfare, which is expected to aid the segment growth. The rising demand for advanced situational awareness capabilities for military operations to drive the segment growth.

The computing segment is estimated to grow at the highest CAGR through the forecast period. The growth is attributed to the government and OEMs' huge investment in the upgrading of computers and sub-systems technology. The growing introduction of advanced technologies such as Big Data analytics, artificial intelligence, and the Internet of Things (IoT) will enhance overall military operations.

The information security and assurance segment is projected to grow at a significant CAGR during the forecast period. Rising investment in cybersecurity and threat prevention systems is anticipated to be the fastest-growing segment.

By Solution Analysis

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Non-metal Segment to Propel the Market Growth Owing to High Demand for Polymer-core PCBs

The market is classified as hardware and software and services based on solution. The hardware segment is further segmented into sensor systems, communication and network technologies, displays and peripherals, and weapon systems. Software and services are classified into cybersecurity, computing and analysis, system integration and engineering, simulation and training, managed services, support services, and others. The software and services segment dominated the market in 2021 and will showcase remarkable growth with the highest CAGR during the forecast period. Rising investments in next-generation technologies such as artificial intelligence, big data analytics, and cybersecurity from the U.K., Poland, Germany, France, and other NATO countries will drive the segment growth during the 2022-2029 period. The development is due to increased spending on military communication and ISR capabilities.

The hardware segment held the largest market share in 2021. For instance, in February 2021, the German Armed Forces signed a contract with Motorola to deliver mission-critical communication networks. The new deployable mission-critical networks combine a Terrestrial Trunked Radio (TETRA) solution with an LTE for data transmission. The contract includes the delivery of 12,500 handheld and 4,000 mobile and fixed radios. This development will boost the growth of the market.


The market is segmented into the U.S. and NATO. NATO is further divided into the U.K., Germany, France, Spain, Italy, Poland, Turkey, Canada, and the Rest of NATO. The U.S. dominated the market in 2021 with a value of USD 47.50 billion and is projected to grow at a significant CAGR during the forecast period. According to the U.S. defense budget overview, the DoD invested USD 1.3 billion in 2020 to procure UAVs.

The market in NATO is projected to grow at the highest CAGR during the forecast period. There is scope to design and develop delivery C5ISR for military applications. Many companies are looking forward to strengthening their partnership with the governments to establish long-term contracts in the coming years. The defense sector is looking forward to replacing helicopters with cost-effective and lightweight drones for several applications.


Technological Advancements Implemented by Key Players to Propel Market Growth

The design of technologically advanced C5ISR solutions, using advanced technology equipment deployment, and developing new product enhancements are the upcoming trends in the market. Key market players in the industry, such as Lockheed Martin Corporation, ST Engineering, General Dynamics Corporation, Raytheon Technologies Corporation, CACI International Inc., and Elbit Systems, adopt strategies such as mergers & acquisitions, agreements, and partnerships for the company's growth.

Moreover, investment in the research and development of new command and control solutions is adopted by several key players to sustain their position in the market. A diversified product portfolio and innovative concepts accepted by key players are the major factors boosting the market.



  • February 2022 – Kratos Defense & Security Solutions Inc. announced that it has been awarded a contract value extension on an existing C5ISR program worth USD 50 million. Under this program, the company will facilitate comprehensive products, hardware, engineering, and other deliverables and services for the U.S. and its allies on airborne, ground, naval, and space platforms.

  • January 2022 – Collins Aerospace announced that it demonstrated its JADC2 as a part of the Pentagon’s initiative for CJADC2 (Combined Joint All Domain Command and Control), which facilitated that the systems help armed forces with actionable data and heightened situational awareness.


An Infographic Representation of NATO C5ISR Market

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The research report provides an in-depth technical analysis of the market. It focuses on key aspects such as leading market players, the Russia-Ukraine war's impact on the market, in-depth NATO command and control applications, and the research ideology of the weather forecasting devices. Besides this, the report offers insights into the market trends and highlights key industry developments & trends. In addition to the factors mentioned earlier, it provides multiple factors that will contribute to the market's growth during the forecast period.

Report Scope & Segmentation



Study Period


Base Year


Estimated Year


Forecast Period


Historical Period



Value (USD Billion)


By Type

  • Land

  • Naval

  • Airborne

  • Space

By Application

  • Electronic Warfare

  • Intelligence, Surveillance & Reconnaissance

  • Weapon Systems

  • Theatre Command and Control

  • Information Security & Assurance

  • Computing

  • Others

By Solution

  • Hardware

    • Sensor Systems

    • Communication and Network Technologies

    • Displays and Peripherals

    • Weapon Systems

  • Software and Services

    • Cybersecurity

    • Computing and Analysis

    • System Integration and Engineering

    • Simulation and Training

    • Managed Services

    • Support Services

    • Others

By Geography

  • U.S. (By Type, Application, Solution, Country)

  • NATO (By Type, Application, Solution, Country)

    • U.K. (By Solution)

    • Germany (By Solution)

    • France (By Solution)

    • Spain (By Solution)

    • Italy (By Solution)

    • Poland (By Solution)

    • Turkey (By Solution)

    • Canada (By Solution)

    • Rest of NATO (By Solution)


Frequently Asked Questions

Fortune Business Insights says that the NATO market size was USD 69.50 billion in 2021 and is projected to reach USD 110.85 billion by 2029.

In 2021, the U.S. market value stood at USD 47.50 billion.

Registering a CAGR of 6.13%, the market will exhibit steady growth in the forecast period (2022-2029).

The land segment is expected to lead this market during the forecast period.

Growing cross-border conflicts, rising terrorism, and political disputes among different countries drive the market growth.

Lockheed Martin Corporation, ST Engineering Ltd., General Dynamics Corporation, Raytheon Technologies Corporation, CACI International Inc., Elbit Systems Ltd., and L3Harris Technologies Inc. are the major players in the global market.

The U.S. dominated the market in terms of share in 2021.

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