New Global Arms Race Begins: Who Wins Trillion-Dollar Defense Boom? | Juno Industries

David Lin (0:00)

The world is undergoing one of the largest military buildups in decades. Japan is now considering a massive $500 billion defense buildup over five years, nearly doubling its previous spending plan. Germany aims to build Europe's strongest conventional military by 2039, with annual defense spending projected to reach 181 billion euros by 2029 Meanwhile, Poland is allocating nearly 5% of its GDP to defense one of the highest levels from NATO countries. China has increased its official military budget to approximately $280 billion, as countries around the world pour enormous sums into weapons, missile defense systems, drones, and artificial intelligence.

From the ongoing wars in Iran and Ukraine, to rising tensions over Taiwan and Southeast Asia, the world's major powers are preparing for an increasingly uncertain security environment. But now, a potentially historic diplomatic meeting could change the geopolitical landscape. President Trump says he expects to meet Chinese President Xi Jinping and Russian President Vladimir Putin next week to discuss ending the Iran War and nuclear arms control. Could these three leaders negotiate an end to some of the world's most dangerous conflicts, or are we entering a new era of military confrontation between the world's major powers?

And as countries raise to modernize their armed forces, what will the next generation of warfare actually look like? Joining me today are Harjit Sajjan, Canada's former Minister of National Defense from 2015 to 2021, and currently Executive Chairman and co-founder of Juno Industries, joined by his co-founder and CEO Hunter Scharfe. Juno went public on the TSX Venture Exchange under the ticker symbol JUNO on October 22nd. This video is disseminated on behalf of Juno Industries. Gentlemen, good to see you. Welcome to the show.

Harjit Sajjan (1:54)

Good to see you again.

Hunter Scharfe (1:54)

Thanks for having us, David.

David Lin (1:56)

Harjit, I like to start with you and talk about what you think are the national priorities for Canada's and largely NATO's defense plans, given what you see today with the Iran war that's ongoing, the Ukraine war that's ongoing, and specifically starting with the recent news that I referenced in the introduction, the APEC meeting that may see a historic meeting between Trump, Xi Jinping and Putin. Are we potentially seeing a new kind of alliance between those three major military powers?

Harjit Sajjan (2:27)

Well, first of all, it is quite sad that we're in this state, that nations have to significantly increase their defense budgets because of the security situation around the world.

And I think all leaders need to look at, especially the leading powers of the decisions that have been made by their leadership, that's led to this situation when it comes to deterioration of the rules-based order.

So I'll be honest with you, I don't have a lot of hope in the meeting that's taking place. Other meetings have taken place in the past. Not much has come out of it, but I am an optimist, and I'm hoping that there'll be some type of discussion that leads to normalization of some step of stability, let's put it this way. But I don't see President Putin slowing down in his war efforts in Ukraine and the aggression that's taking place. The tensions that take place also in Pacific Ocean is still quite high. But having said that, it's always good for a dialogue to take place. We never know what can happen. But given what I've seen in the past, I just don't put a lot of hope to this right now.

David Lin (3:47)

Harjit, I'll come back to you and talk about Canada's defense and the future of Canada's defense. Hunter, when you look at how weapons systems have evolved during the Ukraine war and especially the recent ongoing Iran war, what can you, I guess, expect countries around the world, the industrialized countries, to prioritize when developing their defense plans over the next five years? Japan, I referenced, Poland, Germany, China, all building up their militaries, all increasing the military budgets. What are they likely going to spend money on in the next five years? I'm talking about specific weapons defense systems that you think will be especially relevant in our current times.

Hunter Scharfe (4:29)

Yeah, I think I think the highlight here and what shocked people all over the world is just the pace of innovation, something that is used in the field today can be obsolete in less than six weeks.

Really, the first thing that needs to change across all these countries that you're mentioning is the speed of procurement and the ability to buy new things faster and the ability to invest in R&D, have larger risk-taking appetite in the R&D category and being able to work with small and medium businesses in order to procure advanced technology very quickly that responds to whatever the latest threat is. I do really think that that theme of innovation is critically important for any military that's looking to modernize around the world. Then when it comes to specific systems, I think we've become accustomed and familiar to hearing about autonomous systems and artificial intelligence being used on the front lines. But this is such a new concept. A lot of countries like Canada are really only now investing in these areas, and so that's what's been demonstrated as being on the front lines of conflicts around the world, and it's what's going to be the primary focus for R&D budgets for countries like Canada. And I would also say, the term modernization of the armed forces in Canada, and this is again, to your point, is happening all over the world. This is everything from communication systems, sensor systems, digital systems that are used to communicate data.