In the aftermath of Russia’s full-scale invasion in 2022, Ukraine’s military and political leadership confronted a dire scenario arising from its Soviet-inherited defense industrial base. This sector was plagued by corruption, institutional inertia, and a culture that stifled innovation. Despite these profound deficiencies, it was evident that this aging industrial base was crucial for Ukraine’s survival in a moment of existential threat.
However, Ukraine did not engage in a gradual reform of its defense ecosystem; rather, it underwent a dramatic transformation against the backdrop of wartime pressures. In a span of just three years, it has forged a defense technology ecosystem that emphasizes agility and competitiveness, particularly in the field of unmanned systems.
Numerous interviews with Ukrainian officials, entrepreneurs, and military officers illuminate this remarkable shift, illustrating a unique adaptation that the United States and its allies should take heed of. The central takeaway is clear: modern warfare necessitates a defense industrial base that is radically decentralized, fosters bottom-up innovation, and is marked by competitive dynamism.
Key findings underscore that Ukraine institutionalized a ‘commercial-first’ defense market. This market is oriented predominantly toward innovative systems, particularly unmanned platforms. The strategy involved allocating a specific budget within defense spending dedicated to acquiring new capabilities from the commercial sector, simplifying and reducing acquisition rules significantly.
By distancing its acquisition processes from the traditional military-industrial complex, Ukraine saw a significant increase in the integration of commercial technologies. This included the establishment of streamlined electronic procurement procedures and a significant decentralization of procurement authority down to independent military units.
The commercial-first market in Ukraine, initially monochrome and focused predominantly on commercial drones, has significantly expanded. Technologies now encompass first-person view (FPV) drones, long-range strike drones, unmanned ground and naval vehicles, electronic warfare systems, advanced sensors, secure communication, and AI-enabled software for navigation and target recognition.
Currently, commercial technology accounts for nearly half of Ukraine’s defense procurement spending. Based on state budget allocations alone, commercial acquisitions constitute almost one-third of total weapon systems procurement. Considering additional funding sources such as reallocations from local budgets and volunteer-driven procurement activities, the share approaches fifty percent—a testament to the increasing reliance on commercially developed technologies in modern, high-intensity conflicts.
Ukraine has innovatively aligned its unmanned capability acquisition process with the commercial product development lifecycle. Efforts have focused on minimizing bureaucracy by removing unnecessary decision milestones and oversight mechanisms. By aligning acquisition timelines, language, and expectations between the government and industry, Ukraine ensures that real-world operational needs inform military capabilities.
Unlike cumbersome top-down directives relying on rigid specifications, military requirements are now framed in terms of actual battlefield problems. This has fostered a more direct communication line between frontline units and technology developers, allowing for agile responses based on real-time needs rather than bureaucratic forecasts.
Moreover, Ukraine has delegated early-stage research and development (R&D) responsibilities to the commercial sector. Drone manufacturers now independently fund and develop technologies up to a prototype stage, which means the military engages only when technologies reach maturity—often defined as a minimum viable product (MVP) or technology readiness level (TRL) 6–7. This model allows the military to allocate its resources effectively, focusing on testing and integrating already promising technologies into its operational framework.
Another significant reform includes the decentralization of defense procurement authority to individual military units. These units are now empowered to use allocated budgets to acquire necessary systems directly from an approved list by the Ministry of Defence (MOD). The result has been a marked improvement in responsiveness and agility in procurement, tailored to the real-time operational demands of the frontline.
Ukraine has also adopted secure and encrypted digital communication tools that have revolutionized military capability development. These tools hasten the communication of battlefield requirements to the industry and replace outdated paperwork processes with rapid digital mechanisms that foster collaboration.
In light of its successes in digital governance, Ukraine is extending this approach to its defense sector. Although a unified digital acquisition system is still under development, existing platforms have already revolutionized procurement and technology evaluation processes. They facilitate swift interactions between military end-users and technology providers, enhancing the nation’s defense innovation capability.
Despite operating from a distressing starting point, Ukraine’s defense technology sector is now viewed as an exemplar among Western nations, many of which possess far more expansive military budgets and technology resources. Analyzing Ukraine’s adaptation strategies may offer vital lessons in accelerating defense innovation and systemic responsiveness.
A critical literature review illustrates how recent research casts Ukraine as a model for agile industrial governance. Various analyses have noted the country’s innovative use of commercial drones and rapid procurement cycles, establishing Ukraine as a benchmark for contemporary military integration of commercial technologies.
The report argues strongly for dual acquisition systems—one that accommodates traditional arms manufacturers alongside a commercial-first approach that prioritizes speed and responsiveness to emerging battlefield technologies. Ukraine’s experience underscores the vital importance of adapting defense procurement strategies to leverage the commercial sector effectively.
The insights derived from Ukrainian success emphasize the urgent need for the U.S. Department of Defense (DOD) to rethink its current procurement frameworks and embrace a more flexible and responsive model.
Moving forward, the U.S. could benefit greatly from establishing dedicated budgets that emphasize rapid sourcing of unmanned systems and flexible procurement processes that enhance swift adoption of commercially developed technologies. Moreover, aligning mission efficacy with operational needs rather than stringent criteria could catalyze meaningful reform across the military.
Ultimately, leveraging insights from Ukraine’s defense transformation could guide the U.S. military in achieving notable progress against modern threats, enhancing national security through better integration with the rapidly advancing commercial technology landscape. The time is ripe for action, allowing the DOD to redefine its approach to procurement and capability acquisition amidst the challenges of a fast-evolving global battlefield.
image source from：csis
