In the op-ed, Yaniieva compares Ukraine's path with the experience of the US, Israel, Japan, South Korea and Türkiye
Kyiv — The decisions Ukraine makes about its defence industry now will determine whether the sector becomes the base for a wider technology economy or repeats the fate of the Soviet defence complex, Daria Yaniieva, President of Defence Builder, writes in an op-ed for the Kyiv Independent titled "Ukraine's defense industry gets a second chance".
In 1991, Ukraine inherited the second-largest defence industrial complex of the Soviet Union, including Pivdenmash, which built intercontinental missiles, and Antonov, which produced the world's largest aircraft. Within a single generation much of that capacity disappeared, and by 2014 volunteers were carrying much of the burden of supplying the army. Today Ukraine is building its defence industry for the second time, from the bottom up, with private money and in open competition between manufacturers, Yaniieva writes.
"The longer I work inside the sector, the more convinced I am that the real question is what kind of Ukraine this industry will make in 10 years," she writes.
Yaniieva describes two scenarios. In the United States, Silicon Valley grew out of military radar labs and Pentagon contracts, and in Israel and South Korea the defence sector became the basis for a technology economy and record exports. The Soviet defence complex absorbed 15–20% of the economy by Western estimates, and none of its civilian production lines survived without state orders once the market opened.
According to the op-ed, five structural forks separate these scenarios, and Ukraine is passing them now.
The first is whether military technologies, people and engineering culture move into the civilian economy. Ukrainian technologies in autonomy, communications, robotics and electronic warfare have civilian applications in agriculture, space and other sectors, and this spillover depends on intellectual property rules, education and dual-use mechanisms.
The second is openness. Japan banned its own arms exports and its defence industry withered, while South Korea and Türkiye built their industries for export from the start. In July, the Ukrainian government formalised a mechanism of controlled exports. By KSE Institute's preliminary estimate, 156 international defence partnerships have been launched, and a quarter of them have already stalled. According to Yaniieva, openness becomes an industry only together with service, standards, financial instruments and constant work on foreign markets.
The third is competition. In 1993, the Pentagon urged the largest US defence contractors to merge, and 22 years later William Perry, who hosted that meeting, admitted that the consolidation had turned out badly. Ukraine's defence industry is being built on open procurement in which hundreds of manufacturers compete for contracts, and that competition gives Ukrainian defence tech its speed of innovation, Yaniieva writes.
The fourth is specialisation. In 1987, Israel cancelled its Lavi fighter programme and moved engineers and budgets into avionics, air defence, unmanned systems and electronics. Ukraine will also have to decide what it will not build, Yaniieva writes, and its advantages lie in unmanned systems, electronic warfare and combat data.
The fifth is whether the defence industry pulls a component base, machine tools, engineering education and capital markets along with it, as it did in South Korea, where defence developed together with shipbuilding, the car industry and electronics within a single industrial policy.
"These forks will have to be passed through institutions — rules of the game, education, standards, capital instruments, validation, and analytics infrastructure," Yaniieva writes.
The full op-ed is available on the Kyiv Independent website: https://kyivindependent.com/ukraines-defense-industry-gets-a-second-chance-2/
