Vast in size and exceedingly complex in scope, the U.S. aerospace and defense (A&D) industry is increasingly impacted not only by economic forces, but by a changing political structure, continuing global conflicts, supply chain issues, and talent and production shortages that have redrawn its very guidelines and focus.
Despite the challenges it faces, industry analyst Deloitte’s research indicates that the industry is experiencing growth and progress in these areas with worldwide attention on aerospace technology and its potential energized by Space X’s successful Falcon 9, Star Shield, and Starship programs.
Encompassing the development and manufacture of a vast array of products from drone systems and communications satellites to unmanned vessels and commercial passenger aircraft, all of which are undergirded by thousands of smaller suppliers who manufacture a myriad of products including aircraft hydraulics, complex operations software, fasteners, helicopter rotor blades, laser systems, and countless other sub-assemblies and components.
“As geopolitical tensions continued, pushing countries to increase defense spending. Per the Stockholm International Peace Research Institute, approximately 59 countries were at war in 2022, up by 27 countries compared to 2019. As a result, global defense expenditures surpassed $2.4 trillion in 2023,” it states in its 2025 Defense and Aerospace Industry Outlook report.
That trend, it adds, “are expected to continue into 2025, with the potential for broad-based operationalization of many technologies, from artificial intelligence and advanced air mobility (AAM) to unmanned systems.”
AI
Over the past year, it continued, “AI has seemingly become ubiquitous, potentially indicating that companies in the sector are growing more and more comfortable with the technology. In 2025, AI is likely to help accelerate progress in various areas, including enhancing aftermarket services and optimizing supply chain.”
According to a recent Deloitte survey, 81 percent of respondents in the A&D industry reported that they are already using or plan to use artificial intelligence and machine learning (AI/ML) technology.
Responses from aftermarket companies also indicated that AI/ML, generative AI, and extended reality “are the major focus technologies for the next one to three years. The AI/ML and digital revolution is helping to revamp sustainment practices, with an emphasis on enhancing both operational efficiency and customer experience.”
As AI applications improve in the MRO space, “the industry could expect to see a simultaneous improvement in customer experience,” the survey said. “By aggregating data from various sources, AI can provide a comprehensive view of an aircraft’s status and maintenance needs. MRO service providers can explore customer-specific AI-driven user manuals that provide real-time updates and recommendations based on the actual usage of the aircraft.”
Such actions, it concluded, “can improve operational efficiency and customer satisfaction by carrying out maintenance activities seamlessly and making aircraft available when needed.
Examples of partnerships of all sizes aimed at improving the “customer experience” abound: Lockheed Martin recently formed a subsidiary to assist U.S. defense companies incorporating artificial intelligence into their operations.
At the same time, a pair of California-based companies – Anduril Industries and startup Impulse Space – recently formed a strategic partnership to develop advanced, AI-enhanced in-space maneuvering capabilities. The companies plan to pursue military and defense contracts for space missions that involve complex orbital maneuvers.
The collaboration calls for Anduril to integrate its Lattice AI-enabled software platform to operate Impulse’s Mira space vehicle, allowing a single operator to control and maneuver multiple spacecraft simultaneously.
Advanced Air Mobility
Ushering in a new chapter in the history of aviation, advanced air mobility involves innovative air transportation systems that integrate new aviation technologies, such as the design and operation of heliport-like ‘vertiports’ and the development of electric vertical takeoff and landing (eVTOL) aircraft.
Such aircraft can transport passengers or cargo at low altitudes in rural, urban and suburban areas, and assist with firefighting and search and rescue operations.
A growing number of firms are becoming involved in the development of advanced air mobility (AAM) systems for both commercial and military applications.
Vermont-based Beta Technologies, for example, is working on an electric aircraft charging network that will position the company in the western U.S. under a new partnership with the state of Utah and 47G, Utah’s 161-member aerospace and defense association. The partnership aims to lay the groundwork for an AAM ecosystem in Utah ahead of the 2034 Winter Olympic Games in Salt Lake City.
Under the new partnership, Beta and 47G will work with the Utah legislature to identify ideal routes for future electric aircraft operations and begin deploying charging infrastructure. They will also examine possible locations for flight demonstrations and pilot training activities, according to Beta.
Vertiport designer and developer Skyway provides eVTOL manufacturers, and commercial developers, including vertiport airspace and airfield management, with infrastructure development and AI-integrated technologies and neural network solutions.
Oakland, California-headquartered Vertiport has partnered with MatrixSpace, an AI-enabled sensing platform, with plans to advance the integration of intelligent air traffic management and unmanned aircraft detection systems. The collaboration aims “to redefine safety, efficiency, and scalability in the advanced air mobility and unmanned aerial systems sectors.”
Unmanned Combat Systems
On land, sea, and in the air, unmanned combat systems (UCS) have come a long way since 1888 when Nikola Tesla tested a remote-controlled torpedo in New York harbor.
In the decades since, the development of such systems, combined with AI, has revolutionized defense strategies and capabilities with the goal of achieving mission success by significantly reducing casualties.
- Early last year, the Pentagon’s Defense Innovation Unit announced that it awarded deals to Anduril and Denver, Colorado-headquartered Palantir Technologies to develop software system integration architectures to aid the Army’s Robotic Combat Vehicle program’s data readiness and processing capabilities.
- Southern Command/U.S. 4th Fleet advanced the U.S. Navy’s Hybrid Fleet Campaign with the deployment of long-dwell robotic surface vessels, small robotic interceptor boats, and vertical take-off and landing robotic air vessels to its Southern Command, which covers the Caribbean and South America. U.S. 4th Fleet operationalized the unmanned systems through integration with U.S. Coast Guard cutters at sea and operations centers at 4th Fleet and Joint Interagency Task Force South headquarters in Key West, Florida.
- The U.S. Marine Corps is working with San Diego, California-based drone designer Kratos to perfect the XQ-58A Valkyrie, a high-performance tactical drone capable of operating without a runway and undertaking long-distance flights at high subsonic speeds.
- In a similar vein, the U.S. Air Force is reportedly conducting mission-level modeling for the next increment of its Collaborative Combat Aircraft (CCA) program, while options are being considered including the development of large drones that don’t require runways to be launched. The CCA initiative envisions “using highly autonomous uncrewed systems to serve as robotic wingmen for manned fighter jets and to perform other missions. The service plans to develop and field new iterations of these types of platforms over time,” according to one source.
- California-based Firestorm Labs has been awarded a $100 million contract by the Air Force for the development and delivery of small unmanned aerial systems. The project involves the integration of the company’s flagship drones, associated support services, and research and development for various applications, aimed at enhancing military innovation and operational flexibility.
- The U.S. Army’s Future Tactical Uncrewed Aircraft Systems (FTUAS) Product Office has officially received the Textron Systems’ MK 4.8 HQ Aerosonde system. The system is the result of an intensive two-year development process aimed at enhancing the Army’s tactical reconnaissance and surveillance capabilities through innovative unmanned systems. The Textron Systems’ MK 4.8 HQ Aerosonde features uncrewed Vertical Take-Off and Landing (VTOL) aircraft specifically designed for tactical reconnaissance and surveillance in modern combat environments.
- RapidFlight, a designer and additive manufacturer of mission-customized, mass-producible drones, recently successfully demonstrated its ability to rapidly design, manufacture, and deploy the SPX, a customizable, autonomous, fixed-wing aerial vehicle, to Autonomy Prime specifications in less than 90 days. The demonstration was a first deliverable under the Manassas, Virginia-based company’s $10 million contract with the U.S. Air Force.
The Talent Search
Despite a surge in growth, aerospace and defense firms are facing a serious challenge in matching the increasing demand for qualified workers with the existing talent supply.
According to the latest research data compiled by consultants McKinsey & Company, while the aerospace and defense sectors has surged at an unprecedented rate, “the talent supply and demand gap continues to cause substantial strain on employers, and the value at stake has never been higher.”
Rising to the challenge, a growing number of collaborations have been launched to alleviate the problem by educating a new generation of workers well-suited to tackle the challenges of an increasingly technical, highly specialized, and multi-dimensional industry sector.
Some examples…
- NASA’s Office of STEM Engagement at Johnson Space Center in Houston offers students a unique gateway to opportunity through the High School Aerospace Scholars (HAS) program. The initiative provides Texas juniors with hands-on experience in space exploration, working on projects ranging from rocket building to problem-solving in collaborative teams.
- Louisiana Tech University is entering a groundbreaking partnership with Archem, LLC, a Shreveport-based leader in advanced fuel solutions for aerospace applications. The collaboration, which combines innovative research, specialized equipment, and industry partnerships, is set to expand innovation in aerospace engineering while providing invaluable opportunities for students and faculty alike. The partnership emphasizes teamwork across multiple stakeholders, including faculty in Louisiana Tech’s College of Engineering and Science, the University’s Innovation Enterprise, and Barksdale Air Force Base, as well as the Ruston Regional Airport.
As part of the partnership, Louisiana Tech will receive a custom-designed jet engine test platform. This mobile facility, developed with Onyx Aerospace—a commercial and government defense contractor—includes fuel management systems, controls, data systems, and sensors to measure performance. Students will gain hands-on experience by working with faculty and industry professionals to explore the future of advanced fuels and propulsion systems. - Since 2015, more than 40 aerospace-related facilities have located or expanded operations in Georgia, creating more than 2,500 jobs. The presence of several global leaders in aerospace manufacturing there creates a diverse mix that includes OEMs, R&D, MRO, transportation services, hypersonics, cyber security operations and unmanned aerial vehicles produced by global industry leaders such as Gulfstream Aerospace, Pratt & Whitney, Raytheon, Archer Aviation, and StandardAero. The state’s Technical College System offers a variety of aerospace-related degree and certificate programs to both develop a pipeline of qualified workers and enhance the skills of existing workers. Programs include two-year degrees, one-year diplomas, and fast-track certificates in many relevant fields.
- Oklahoma’s FY2025 competitive aerospace and aviation education program grant allocations that support a wide range of educational and workforce development initiatives including funding for extracurricular STEM activities, hands-on learning in coding and aeronautical principles, training for pilots and technicians, and drone building/racing. Significant support will also enhance STEM learning at major events like the annual Tinker Air Show and provide resources for innovative educational programs. As part of these allocations, 98 grants totaling a record $731,128 were awarded to various programs across the state. These initiatives “are set to impact tens of thousands of students throughout Oklahoma, with the aim of inspiring them to explore employment opportunities in the aerospace field,” according to the Oklahoma Dept. of Aerospace and Aeronautics.
- The University of North Dakota’s John D. Odegard School of Aerospace Sciences recently entered a one-year partnership with Vigilant Aerospace Systems to utilize the company’s drone safety software and airspace management system FlightHorizon. As part of the agreement, Vigilant Aerospace will provide training for UND Aerospace students and faculty, with full integration of its FlightHorizon into the program’s operations and research expected by summer. FlightHorizon utilizes NASA-patented technology to integrate multiple sensors, machine learning, and data sources to deliver real-time situational awareness that allows drone operators to proactively identify nearby aircraft and avoid potential collisions.
- A five-year, $5 million grant from NASA is funding the operations of a new aerospace engineering research center at the University of Houston (UH). The IDEAS2 center is a collaborative effort between UH, Texas A&M University, Stanford University, Houston Community College, San Jacinto College and industrial partners Boeing, Axiom Space, Bastion Technologies, and Lockheed Martin. The vision of the IDEAS2 Center “is to become a premier national innovation hub that propels NASA-centric, state-of-the-art research and promotes 21st-century aerospace education,” says Karolos Grigoriadis, head of the new Center and director of the Aerospace Engineering Graduate Program at UH. The Center’s research-integrated educational activities “will encompass graduate, undergraduate, and middle and high school students, providing opportunities for research, experiential learning, and STEM engagement in aerospace to excite their imagination, enrich their education and promote their pathway to aerospace careers.”
A New Renaissance
If the year 2025 for the aerospace and defense industry could be defined in a single word, it would be “renaissance.”
Just like the 15th and 16th Centuries served as a period of revolutionary cultural and technological shift from the Middle Ages to a New Age of ideas, achievement, and challenges.
Experiencing transformation on an almost daily basis that’s fueled by technological advances which stagger the imagination, aerospace and defense companies of today are undergoing their own renaissance as they race to keep pace and integrate the latest in research, development, manufacturing, and production tools into their operations to reach new heights only dreamed of just a few decades ago.
Bio: Michael D. White is a published author with four non-fiction books and well more than 1,700 by-lined articles on international transportation and trade to his credit.
