The term avionics was not in general use until the early 1970s. Up to this point instruments, radios, radar, fuel systems, engine controls and radio navigation aids had formed individual (and often mechanical) systems.

In the 1970s, avionics was born, driven by military need rather than civil airliner development. Military aircraft had become flying sensor platforms, and making large amounts of electronic equipment work together had become the new challenge. Today, avionics as used in military aircraft almost always forms the biggest part of any development budget. Aircraft like the F-15E and the now retired F-14 have roughly 80 percent of their budget spent on avionics. Most modern helicopters now have budget splits of 60/40 in favour of avionics.

The civilian market has also seen a growth in cost of avionics. Flight control systems (fly-by-wire) and new navigation needs brought on by tighter airspaces, have pushed up development costs. The major change has been the recent boom in consumer flying. As more people begin to use planes as their primary method of transportation, more elaborate methods of controlling aircraft safely in these high restrictive airspaces have been invented. With the continued refinement of precision miniature aerospace bearings, guidance and navigation systems of aircrafts have become more exact.