Objective developed a sophisticated defence economic forecast tool for the international strategic research sector, enabling users to project a country’s defence budget for the next 15 years and analyse up to 10 years of historical data.
Context
Organisations in the international strategic research sector provide governments, armed forces, private sector clients, and academics with unbiased insights into global security, conflict, and defence economics. Using advanced analytics, these organisations help stakeholders assess military capabilities and financial planning in a data-driven way.
The Challenge
The sector required a defence budget forecast tool that could integrate multiple datasets, account for complex macroeconomic and geopolitical factors, and deliver accurate, actionable insights. Users also needed the ability to adjust the forecasts for alternative scenarios, providing flexibility for strategic planning.
The Solution
Objective’s data analytics team designed the defence budget forecast tool using a Bayesian network-based econometric model. The process included:
- Reviewing and cleaning historical defence and economic data.
- Feature engineering to identify the most relevant variables.
- Statistical data modelling using R to develop and evaluate multiple forecasting models.
- Selecting the optimal data model in collaboration with sector experts.
The tool incorporates up to forty-five variables—including macroeconomic factors, defence-economic data, regime type, and international relations dynamics—to generate reliable projections. A user-friendly interface allows subscribers to view trends for key global markets and modify forecasts by ±25% to explore positive or negative scenarios.
The Results & Benefits
- Long-term planning – Forecasts provide a 15-year projection of defence budgets alongside historical trends.
- Scenario analysis – Users can adjust forecasts to explore different outlooks.
- Accessible insights – Subscribers from government, armed forces, private sector, academia, and media can access the tool.
- Data-driven projections – The tool uses robust statistical methods and sector expertise to provide actionable insights while acknowledging that forecasts are subject to change.