5 aerospace and defense industry trends for 2024

By: Louis Travieso

If life imitates art, one may view the 2022 success of Top Gun: Maverick as a harbinger of the aerospace and defense (A&D) industry’s economic rebound in 2023.

Employment and other key indicators within the A&D sector returned to pre-pandemic levels during the period, generating momentum that remains strong as a new year approaches.¹ However, optimism for the next 12 months will be tempered by ongoing talent shortages, economic uncertainty, continued supply chain challenges and growing security risks.

With no high-flying Hollywood movies on the horizon to generate excitement, here are five key trends to watch—and how to prepare for them—as the A&D industry prepares to soar in 2024:

1. Digital twin and digital thread technologies will accelerate

Digital twin and digital thread technologies will play a critical role in the sector’s continued technology evolution. Using digital replicas of products or systems, digital twins simulate situations and outcomes so you can understand how they’ll perform in real life.² Insights generated by digital twins enable faster iteration and optimization of product designs, speeding time to market.

Digital threads, on the other hand, provide digital representations of a product’s entire lifecycle, from design and production to implementation and maintenance.³ By providing a complete and transparent view of manufacturing systems, teams can collaborate more efficiently and make better decisions throughout the production process.

How to prepare: Develop a comprehensive digital transformation strategy that includes guidelines for measuring progress and meeting governance requirements. Decommissioning outdated infrastructure, optimizing your technology ecosystem and unlocking data in support of your business should be key elements of your plan.

2. Investments in edge computing and IoT will increase

Edge computing and IoT will take center stage in 2024 as A&D firms adopt hybrid multi-cloud platforms to boost enablement of connected worker and smart factory capabilities.⁴ These technologies and applications—coupled with connectivity on private 4G or 5G networks—create interconnected ecosystems that facilitate real-time decision-making, seamless data exchange and on-demand communication and collaboration.

Equipping frontline A&D workers with modern digital tools can boost productivity by enabling automation of redundant tasks and streamlining inefficient processes. Better workplace experiences, in turn, can help attract and retain talent and yield better business outcomes. Edge computing and private connectivity also improve security and resilience by incorporating security features into frontline devices while maintaining corporate security standards.

How to prepare: Seek new opportunities to harness edge computing and IoT devices to modernize applications and processes, support mission-critical workloads and deliver modern work experiences. After providing frontline workers with the appropriate tools and connectivity, offer training and support to ensure employees use the technology optimally.

3. Supply chain visibility and resilience will grow in importance

Labor shortages, residual impacts of the pandemic and military conflicts in Ukraine and Gaza will compel A&D organizations to focus more intently on supply chain visibility and resilience. Real-time visibility into your supply chain provides a complete view of your organization’s logistics, ensuring you maintain optimum inventory levels and have the data to improve supply control and effectively manage third-party risk.

To establish and strengthen supply chain resiliency, public and private sectors will need to work closely to establish local and regional sources for raw materials, parts and finished goods to avoid interruptions in global supplies. Alternative supply sources for essential products and services can help reduce supply chain complexity and better manage volatility.

How to prepare: Create a detailed map of all suppliers, manufacturers, distributors and customers involved in the production and delivery of your products and services. Use the blueprint to develop a risk management strategy to identify potential risks that could impact your supply chain and formalize contingency plans to minimize disruptions.

4. AI technologies will fuel innovation

Traditional AI and generative AI will fuel the most practical and far-reaching innovations within the A&D sector in the year ahead.

From a manufacturing standpoint, traditional AI can help companies streamline aircraft design processes and automate quality control procedures, making it easier to detect defects in components and increase production line efficiency. The technology can also be used to improve aircraft maintenance operations and enhance air traffic control and will eventually prove vital to the growth of autonomous flight and unmanned systems.

While still in the early stages of deployment, generative AI will open numerous frontiers in the A&D industry. The manufacturing subsector will benefit from faster prototyping and improved quality control, while future applications in the maintenance, repair and overhaul (MRO) subsector should boost predictive maintenance, enable virtual testing and simulation, bolster repair and maintenance capabilities and optimize supply chains.⁵

How to prepare: Publish an organizational policy outlining responsible uses of traditional and generative AI, paying particular attention to data quality, privacy and confidentiality, and ethical considerations. Once these guardrails are in place, you can begin training or sponsoring education for employees and identifying use cases for the technology within your company.

5. Cybersecurity will underpin all initiatives

Cyber incidents have been rising across the A&D industry over the past few years as more firms deploy cloud platforms and IoT devices to increase connectivity.⁶ With national security and literally billions of dollars at stake, cybersecurity will remain an area of intense scrutiny and continued investment in 2024 and beyond.

Leading the way is the U.S. Department of Defense (DoD), which published a strategy in late 2022 outlining its plan to reach zero trust compliance by 2027.⁷ Expect many A&D companies to follow suit in 2024 by implementing or reinforcing zero trust frameworks to strengthen their own cybersecurity posture and align with DoD efforts.

How to prepare: Establish strong security measures, governance frameworks and contingency plans to safeguard your mission-critical systems. If you haven’t already started, begin implementing zero trust protocols and continue educating employees about the critical role they play in protecting your organization—and, by extension, the industry—from cyber threats.

Climbing to new heights

For all the success the A&D industry enjoyed in 2023, there’s no guarantee the sector won’t lose some momentum or experience unexpected turbulence over the next 12 months. Even so, organizations that approach 2024 with both confidence and cautious optimism can climb to new heights.

Louis Travieso is the Aerospace and Defense partner for Kyndryl.

¹ AIA releases 2023 facts & figures data highlighting A&D industry’s return to pre-pandemic levels, Aerospace Industries Association, September 2023

² What is digital twin technology?, McKinsey & Company, July 2023

³ Digital thread: Definition, value and reference model, American Institute of Aeronautics and Astronautics (AIAA), June 2023

⁴ Digitalizing aerospace manufacturing, Aviation Week, November 2022

⁵ The potential of Generative AI in the MRO industry, Aerospace Defense Review, July 2023

⁶ Cybersecurity threats to aviation bolstered by efficiency, geopolitics, Aviation Week, April 2023

⁷ DOD to review agencies’ zero-trust proposals over the next few months, DEFENSESCOOP, September 2023