Rising Civil Unrest Fuels Demand for Crowd Control Tech: Why Defense Contractors Are Poised to Profit

The surge in domestic civil unrest and federal troop deployments has created a new frontier for military contractors: the market for non-lethal crowd control tools and urban security infrastructure. With bipartisan support for enhanced public safety spending and a bipartisan fear of societal instability, companies like L3Harris (LHX), Raytheon Technologies (RTX), and Axon Enterprise (AXNX) are positioned to capture long-term demand. This analysis explains why these firms are primed for growth—and why investors should act now.

The Rising Demand for Crowd Control Solutions

The past three years have seen record levels of protests, from the January 6 Capitol siege to ongoing demonstrations over police reform, inflation, and climate policy. In response, federal and state governments are prioritizing investments in infrastructure that can withstand civil unrest. According to recent policy directives, funding for non-lethal crowd control tools, surveillance systems, and urban resilience upgrades is accelerating.

For example, Texas's FY 2025 Urban Area Security Initiative (UASI) mandates that 35% of homeland security grants be spent on Law Enforcement Terrorism Prevention Activities (LETPA), including counter-drone systems, cybersecurity for election infrastructure, and “target hardening” for schools and transportation hubs. This shift isn't isolated: the Biden administration's Infrastructure Investment and Jobs Act (IIJA) allocated $1.2 trillion for projects like broadband expansion and grid modernization—key enablers of urban security.

Policy Drivers and Funding Trends

The IIJA and the Building Resilient Infrastructure and Communities (BRIC) program are reshaping demand for defense contractors' products. Key areas of growth include:

1. Surveillance and Interoperability:
2. L3Harris dominates in AI-driven surveillance systems and secure communications infrastructure, critical for real-time threat detection during protests.

4. Non-Lethal Crowd Control:

5. Axon Enterprise (via its Dedrone acquisition) leads in counter-drone technology, a must-have for securing crowded urban areas. Axon's Taser body cameras paired with Dedrone's AI systems create a closed-loop surveillance ecosystem.

6. Raytheon's drone-based surveillance platforms and cybersecurity tools for critical infrastructure further cement its role in this space.

7. Cybersecurity for Critical Infrastructure:

8. Both RTX and LHX are expanding cybersecurity offerings to protect election systems, utilities, and transportation networks—targets during civil unrest.

Key Companies to Watch

• Axon Enterprise (AXNX):
• Why Buy: Axon's Dedrone systems and body-worn cameras are irreplaceable for law enforcement in protest-heavy cities. Its $2 billion backlog in public safety contracts signals sustained demand.

• Risk: Regulatory backlash over surveillance overreach could delay adoption.

• L3Harris (LHX):

• Why Buy: Its secure communications networks and AI analytics tools are critical for interoperability between federal and local agencies.

• Risk: Overexposure to defense budgets could hurt margins if Pentagon spending slows.

• Raytheon Technologies (RTX):

• Why Buy: RTX's pervasive cybersecurity suite and drone surveillance systems are being integrated into smart city projects.
• Risk: High debt levels and merger integration costs remain concerns.

Investment Considerations and Risks

• Bipartisan Funding Backing:
  Both parties agree that civil unrest and cybersecurity threats require immediate action. The Texas UASI example highlights how state-level mandates are creating recurring revenue streams for contractors—regardless of federal election outcomes.

• Competitive Moats:
  The market for specialized crowd control tech is highly concentrated. Few companies can match Axon's surveillance stack or L3Harris's communications expertise, creating pricing power.

• Risks to Watch:

• Economic slowdowns could pressure municipal budgets.
• Regulatory pushback over privacy concerns (e.g., facial recognition bans) may limit growth in some areas.

Conclusion: Buy Now, Play the Long Game

The $50 billion crowd control and urban security market is set to grow at a 12% CAGR through 2030, fueled by geopolitical instability and climate-driven crises. Investors should prioritize AXNX, LHX, and RTX for their irreplaceable technologies and locked-in contracts.

For broader exposure, consider ETFs like the iShares U.S. Aerospace & Defense ETF (ITA), which holds all three companies and offers diversification across defense and tech sectors.

In a world where civil unrest is becoming the “new normal”, these contractors aren't just profiting from chaos—they're building the infrastructure to manage it. The time to invest is now.