97% of private manufacturers of weapons and military equipment expect the lifting of export restrictions in order to begin supplying partner countries, launching joint production facilities, and scaling B2B and B2G partnerships.
This comes from the analytical report by Tech Force in UA and the Better Regulation Delivery Office (BRDO) — “War-Driven: The Rise of Ukrainian Defence Tech and the Private Industry Behind It”, presented on August 28.
The report highlights key trends, needs, and expectations of Ukrainian defence technology producers in cooperation with international partners. The conclusions are based on a survey and in-depth interviews with Tech Force in UA (TFUA) member companies.
Key findings of the report:
- 97% of private defence industry producers expect the lifting of export restrictions. Most companies consider NATO member states as priority destinations for technology and arms exports. Among other potential export markets, producers also see countries in the Middle East and North Africa (MENA).
- Median production capacity utilization is 55%.
- 79% of surveyed producers see short-term government contracts as a growth blocker. Limited volumes of government procurement also hinder the industry’s development.
- One of the key growth drivers has been the increasing demand from military units, volunteers, and local authorities, which has made the market more competitive. These changes have improved equipment quality, accelerated innovation, and lowered prices.
- Buyer diversification is a critical growth factor. Today, 88% of surveyed companies sell through direct procurement by military units, compared to 64% participating in government procurement.
- The main production hubs are Kyiv and Western Ukraine. Most producers operate multiple sites, and the median time to set up a new production facility is 3 months.
- Commercially available Chinese components are being gradually replaced by higher-quality European, American, and Ukrainian ones. Currently, more than 28% of respondents use at least half of components made in Ukraine.
- The greatest need for arms producers is in attracting investment for R&D, scaling production, entering new markets, and developing new products.
“This is the first document to highlight the main driving factors for the growth of asymmetric arms producers. The report includes policy recommendations for EU institutions, EU member state governments, European defence industry representatives, and the Government of Ukraine. Its purpose is to advocate to European partners the importance of investing in Ukrainian defence technologies, opening access to programs and financial instruments, and launching joint production and technology exchange in order to strengthen Europe’s defence capabilities together,” said Kateryna Mykhalko, CEO of the Tech Force in UA.
“Producers of asymmetric weapons today demonstrate what traditional defence industries often cannot: the ability to rapidly find solutions and put them into serial production. If these technologies become part of Europe’s defence ecosystem, we will gain a joint security shield for Ukraine and its EU allies,” emphasized Oleksii Dorohan, CEO of BRDO.