Autonomous capabilities market set for Growth.

• Position: Budget Matters

* Pentagon investments in unmanned and autonomous capabilities are expected to grow as the Defense Department tries to stay ahead of advanced adversaries, according to a new report by big data analytics firm Govini, which tracks government spending trends.

"Autonomous capabilities ... are uniquely positioned to solve intractable problems that exceed current manual capabilities for reasons of technical limitation and human safety, among others," said the report titled, "Third Offset Strategy: Autonomous Capabilities Standard Market Taxonomy."

"With the growing role of machines, operational concepts will be profoundly reshaped, resulting in opportunities for industry," it said.

The Defense Department has reduced spending on existing unmanned aerial vehicles in the past year, with a 4.4 percent decline to $3.5 billion in fiscal year 2016 compared to the average of the previous five years. But that is because the Pentagon is focusing on research and development for next-generation platforms, the report said.

"Recent increases in UAV R&D spending is yet another sign that the market is in transition," it said.

The unmanned ground vehicles market is also poised for a rebound, it noted. Pentagon spending in this area declined by 6.5 percent to $1 billion in 2016 compared to the average of the previous five years. But Govini anticipates a compound average growth rate of 10.2 percent in UGV investments through fiscal year 2021 as mission sets shift from explosive ordnance disposal to intelligence, surveillance and reconnaissance.

Unmanned undersea vehicles are expected to be in higher demand as great power competition between the United States and China in the Asia-Pacific...