Northrop Grumman CEO Kathy Warden predicts that the defense sector will see more mergers and acquisitions over the next two decades as a result of the push to rapidly develop new defense technologies, Defense News reports.
“As a result, I believe the industry will look different in terms of its composition. There’ll be more consolidation,” Warden said recently to the Center for Strategic and International Studies. “There will also be more new entrants, and so it’s hard to say there will be fewer players, but the ones that exist today will likely continue to consolidate as we have seen in recent years and we’ve seen in other cycles.”
In particular she pointed to the rising importance of cyber and artificial intelligence for command and control, as well as military intelligence.
Defense news reported that in Kathleen Hicks’ confirmation earlier this month, the deputy defense secretary warned of increasing consolidation in the defense-industrial base.
“Extreme consolidation does create challenges for innovation,” said Hicks. “We need to have a lot of different, good ideas out there. That’s our competitive advantage over authoritarian states like China, and Russia. And so if we move all competition out, obviously that’s a challenge for the taxpayer, but it’s also a challenge in terms of the innovation piece.”
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