The Rise of Ukraine’s Domestic Defence Industry: Innovation Under Fire

Since the outbreak of full-scale war in February 2022, Ukraine has undergone a remarkable transformation not only on the battlefield but also behind the lines. Nowhere is this more evident than in the country’s burgeoning domestic defence industry, which has evolved from a struggling post-Soviet relic into a critical pillar of national resilience and strategic autonomy. Under conditions of extreme duress, Ukraine is forging a new path—one marked by technological innovation, military necessity, and deepening ties with Western partners. Her success in this domain may ultimately prove decisive in shaping both the trajectory of the war and the security architecture of Europe.

Post-Soviet Inheritance and Pre-War Weaknesses

Ukraine entered independence in 1991 with a considerable share of the Soviet military-industrial complex. She inherited over 1,800 defence enterprises, a wealth of technical expertise, and an experienced engineering workforce. However the 1990s and 2000s were marked by economic dislocation, political instability and pervasive corruption. These factors, coupled with a lack of strategic vision, led to the fragmentation and underinvestment of Ukraine’s defence industry. The sector’s primary focus was export—most notably to Russia, China, and India—rather than domestic procurement or innovation.

Attempts to modernise the industry were sporadic and insufficient. The state conglomerate Ukroboronprom, founded in 2010, struggled with inefficiencies, poor governance and outdated equipment. By the time Russia annexed Crimea in 2014 and invaded Donbas, Ukraine’s military-industrial base was ill-prepared to support sustained armed conflict.

The Turning Point: 2014–2022

Russia’s aggression in 2014 exposed the urgent need for Ukraine to reorient her defence sector away from Soviet dependencies and towards Western integration. This shift was painful and uneven. The loss of key facilities in Crimea and Donbas, including naval and aerospace production sites, forced Kyiv to restructure what remained of her domestic capacity. Defence budgets increased, and efforts were made to replace Russian components in weapons systems, a process known as “import substitution”.

The years following 2014 saw incremental progress. Domestic firms began to develop new armaments—armoured vehicles, UAVs, small arms—but many remained prototypes, and bureaucratic hurdles stymied large-scale production. Still, a foundation was laid. Foreign partnerships, such as agreements with NATO member states, began to open new doors. Notably, Turkish-Ukrainian cooperation on UAVs and engines laid the groundwork for future advances.

Wartime Renaissance: Innovation Born of Necessity

Since 2022, the crucible of total war has forced a profound reinvention of Ukraine’s defence industry. Denied sufficient Western supplies in the early months of the invasion, Ukrainian engineers, technicians and volunteers responded with a burst of ingenuity. The transformation has touched nearly every domain of warfare.

1. Drones and Unmanned Systems

Perhaps the most visible success story is Ukraine’s rapid emergence as a major player in drone warfare. The domestic production of first-person view (FPV) drones, kamikaze UAVs, and maritime drones has multiplied exponentially. Grassroots workshops, private start-ups, and state-funded projects have converged to create a decentralised but highly effective production armaments production system. The “Army of Drones” initiative (in which soldiers gain points for uploading videos demonstrating effective drone hits, that they can use to "buy" new and better drones and equipment) exemplifies how public-private collaboration has turned Ukraine into one of the most drone-intensive militaries in the world.

2. Missile and Rocket Systems

Ukrainian engineers have revived and modified Soviet-era missile systems, such as the Tochka-U and the S-200, adapting them for precision strikes. Newer systems, such as the Hrim-2 short-range ballistic missile and indigenous cruise missile projects, demonstrate growing ambition and capacity.

3. Armour and Ground Equipment

Factories across Ukraine, many in undisclosed locations, are refurbishing damaged Western and Soviet vehicles, producing indigenous armoured personnel carriers (e.g., Kozak, Varta), and developing mine-resistant vehicles tailored to the frontline environment.

4. Electronic Warfare and Countermeasures

Ukraine has become a hub of innovation in counter-drone technologies, communications jamming, and signal spoofing (taking control of Russian drones, overriding their operators' controls). Small-scale developers, often former IT professionals, are now integral to the military effort, producing EW tools with rapid iteration cycles based on real-time battlefield feedback.

5. Ammunition and Logistics

Mass-scale domestic production of artillery shells, small arms ammunition, and anti-tank weapons is expanding. While Western supply remains vital, Ukraine has reduced dependence by rebuilding munition factories and repurposing civilian industry.

Institutional Reform and the Role of the Private Sector

Recognising that victory cannot be outsourced, President Volodymyr Zelenskyy’s government has prioritised defence industrial reform. In 2023, Ukroboronprom was reorganised into the Defence Industry of Ukraine (DIU), a joint-stock company with a mandate for transparency, efficiency, and international cooperation. The move aims to break the culture of secrecy and mismanagement that plagued its predecessor.

Meanwhile, the private sector has taken on an increasingly prominent role. Companies such as AeroDrone, Practika, and Infozahyst are producing dual-use and military technologies that often outpace state efforts in agility and innovation. This ecosystem is supported by the Ministry of Digital Transformation, which champions a tech-savvy approach to defence policy.

International Partnerships and the Birth of a European Arsenal

Ukraine’s defence industry is no longer just a national asset—it is becoming a strategic resource for the West. Joint ventures with American, British, German, Polish, Czech, and Turkish firms are blossoming. In 2023 and 2024, new agreements allowed Western companies to co-produce weapons systems inside Ukraine, reducing delivery time and boosting Ukrainian self-reliance.

Several countries now view Ukraine as a prospective long-term partner in Europe’s rearmament, both for moral and practical reasons. Her battlefield-hardened systems and tactical lessons are of immense value to NATO, and her geographical position makes her an ideal base for forward production and repair.

Challenges Ahead

Despite extraordinary progress, challenges remain. Ukraine’s industrial base is still vulnerable to Russian missile strikes, cyberattacks, and energy shortages. Export controls, bureaucratic inefficiencies, and occasional corruption still limit capacity. Human capital, too, is under pressure, as trained technicians are recruited to the front or flee due to the war.

Sustainable development will require stable investment, a clear procurement strategy, and post-war planning that integrates defence industrial capacity into Ukraine’s broader economic development. Balancing wartime urgency with long-term innovation is the great test ahead.

Conclusion: From Arsenal to Architect

Ukraine’s domestic defence industry has become more than a supplier of matériel. It is now a symbol of national resistance, technological ingenuity, and strategic vision. In building weapons to defend herself, Ukraine is also forging the tools of her future sovereignty and security.

The war has reshaped Ukraine into not only a recipient of Western support but a producer of value and knowledge for the democratic world. Her industry may not yet match the scale of Western arms giants, but in terms of creativity, responsiveness and moral clarity, it stands unmatched. As she continues to defend her freedom, Ukraine is also building the backbone of a European defence renaissance.