Industries · Industrial
Defence and space
How defence companies and space businesses work: governments as the main buyer, budgets and NATO spending targets, European rearmament, long contracts and backlog, contract types, export rules, and the space economy from launch and satellites to satellite broadband and Earth observation, including why reusable rockets changed the cost of reaching orbit.
Key takeaways
- Defence has one main customer, the government, which decides what to buy, how much to pay and who else the product may be sold to.
- Defence profit comes from winning long programmes, pricing the risk correctly and delivering on time; the margin is steady but rarely huge.
- Defence and space cases turn on government decisions: budgets, export rules and who is allowed to buy from whom.
- Explain the defence value chain from government budget to prime contractor, suppliers and decades of support
- Tell fixed-price and cost-plus contracts apart and work out who carries the risk of a cost overrun
- Read backlog and turn it into years of revenue cover
- Explain the space value chain and calculate why reusable launch lowers the cost per kilogram
- Crack typical cases on capacity ramp-up, bids, exports, and satellite business models
Lessons
How the defence and space industries work
Who buys, who builds, how governments procure, the contract types, and the parts of the space economy.
Defence and space economics: contracts, backlog and reuse
Work out who carries a cost overrun, how many years of work a backlog covers, what a higher spending target adds, and why a reusable rocket cuts the cost per kilogram.
Defence and space: players, trends, rules and cases
Who the players are by region, the spending surge of 2024 to 2026, export rules, satellite broadband and Earth observation, and typical case prompts.
Worked cases in this module
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Key terms