Categories: ANALYTICS

Why is the Ukrainian defense industry not taking off?

Why is the Ukrainian defense industry not taking off? Yuriy Kasyanov‘s opinion on the example of drone production.

There is no unified state policy in the field of drones. There is no centralized control. Someone might argue that this is a good thing – different ideas are being implemented, different approaches, different drones… Yes. But the price of this diversity is very high.

Today, we need 5-10 models of drones (from small to large, for different tasks), but in large quantities, at a low price. And we produce 50 models of drones in Ukraine in small batches, with high overhead costs, and with little or no exchange of experience between manufacturers.

The production of drones is spread across all law enforcement agencies – each has its own manufacturers, and is dispersed among four ministries and agencies that are fighting among themselves for budgets and preferences.

The preference is given not to the drone (manufacturer) that won the competition (there are no competitions) or proved itself in combat, but to the one that was successfully demonstrated to the minister, the chief or the president.

Preferences are often given not to the company that has the best design, engineering, and production potential, and more efficient developments, but to the one that is closer to decision-making centers.

Mobilization right now, today, is bankrupting defense companies, depriving the Ukrainian army of drones, because the procedures for booking workers are written in such a way that they are either impossible to pass at all or impossible to pass quickly.

The convoluted bureaucratic system seems to be specially designed to promote corruption and unfair competition. In fact, the market for drone manufacturers is currently being redistributed by mobilizing competitors into the army.

There is too much PR and not enough real work. Everyone is responsible for the drone industry, and no one is specifically responsible. Therefore, there is no one to make claims, no one to judge, and no one to ask for help.

As before, drone manufacturers are relying more on public and media support to help Ukraine survive the war.

Ukraine Front Lines