Is Ukraine a partner, a testing ground, a customer — or perhaps even a competitor? As Kyiv fleshes out new rules allowing exports of drone technology, Ukrainian companies are still figuring out what role they’ll play in rearming Europe.
Drone technology is changing rapidly. In Ukraine it’s spread across hundreds of different companies and dozens of models, some of them seemingly simple but with significant battlefield experience.
European competitors are meanwhile well-funded and increasingly bringing their own models to the battlefield.
Yaroslav Azhnyuk, founder and CEO of autonomous drone company The Fourth Law, says Ukrainian drones may look “lower-tech” with regard to their engineering.” But as far as production and its ecosystem is concerned “there’s actually a very good case to be made for Ukraine companies to be providing this capability as a service to our European partners,” he told DW.
Unique battlefield experience
Flexibility has defined Ukraine’s success with drones in the war against Russia thus far. Producers have turned to commercially available components, often combining imported drones or drone parts with simple onboard computers, open-source programs and even 3D-printed parts.
The use of so-called first-person-view, or FPV, drones has allowed operators to create a class of lethal “kamikazes,” steering an explosives-laden device with a headset and guiding it into a far more valuable target like a tank.
Other drones can drop explosives or mines, while some provide traditional surveillance. So-called deep-strike drones, a focal point for deployment in recent months, fly deep into Russian territory.
Companies say they’re now importing fewer drone parts, increasingly building their own components and refining technology such as battlefield telemetry. They’re also reaping a wealth of data on battlefield conditions such as Russian countermeasures.
Still other companies, like The Fourth Law, say they’re at the front edge of the field.
But while Ukraine’s production capacity has grown, its budget hasn’t kept up. In June, President Volodymyr Zelenskyy said the country could only afford to fund 60% of the defense products it was capable of manufacturing.
Hitting the wall
Meanwhile competitors like German manufacturer Helsing, which is building artificial intelligence-powered drones, have attracted significant international investments. The company is able to build its drones outside of Ukraine while still deploying inside the country.
Industry groups have warned for years that Ukraine’s drone sector will hit a wall if kept within its own boundaries.
Speaking with DW, Kateryna Mykhalko, director general of Tech Force in UA — a coalition of more than 70 tech-related defense businesses — demands that “the system should be balanced.”
“If a company could produce more than the government could buy, they should have this chance to work internationally,” she said.
From an industry perspective, the ability to export attracts new investment and makes joint ventures with outside firms possible.
“If we will restrict exporting and restrict technology transfer, in three, five years we will discover that all the newest solutions, all the [intellectual property] for newest solutions will belong to foreign companies,” Artemm Vyunnyk, co-founder and CEO of drone-maker Athlon Avia, told DW.
Vyunnyk’s company currently builds a surveillance drone, the Furia. It’s working on a new loitering munitions drone called Silent Thunder, which Vyunnyk says could be produced outside of Ukraine to protect production from Russian attack.
The prospect of building outside of Ukraine, something made easier through a joint venture, is attractive to other producers in the country.
Oleksandr Yakovenko, founder of TAF Drones, which builds FPVs, says the first thing he does in the morning is check his telephone to see “if there were any missile attacks on my facilities in Ukraine.”
“Because in this way I can have a lot of losses and not make the government contracts, and it’s a big issue,” he told DW.
What does Europe want?
Kyiv has consistently rejected export requests from its defense companies, preferring to focus on battlefield deployment.
But its need for heavier weapons, including longer-range missiles, also appears to be weighing on the government, experts say. European capitals have refused to provide those weapons directly, but export fees could create a funding source to develop its own.
“These are quite long and resource-heavy development processes,” says Melania Parzonka, who has studied the issue for international think tank Chatham House. “And you need funds for that.”
Zelenskyy’s announcement last month that Ukraine would loosen export rules prompted cheers — and questions about implementation. The Ukrainian parliament is still working on legislation.
Companies wonder which technologies Kyiv could choose to restrict from export and what quotas would apply.
Another question is exactly what European militaries and defense companies want from Ukraine’s drone sector.
With the war still in progress, and with technology changing so rapidly, drone makers say it’s unlikely any Ukrainian company would immediately produce physical supply for another military.
Instead, they could establish joint ventures to produce for Ukraine initially and then later for other militaries. The EU has already earmarked €150 billion ($175.7 billion) in lending for defense partnerships involving Ukraine and European countries.
TAF Drones founder Yakovenko, says he’s fielding inquiries from firms in the UK, Denmark and New Zealand.
Another option is visible in the UK, whose government has announced that Ukrainian drone builders will provide battlefield data for British manufacturers, who would then send their drones back to the frontlines.
The deal supports both Ukraine and “British jobs,” a government press release boasted.
That kind of partnership addresses two realities, drone manufacturers say — that European nations face pressure to support their own defense industries and that Ukraine isn’t a safe production location.
But it may not create the level of partnership that some Ukrainian drone makers wish for in a tie-up.
“I think combining our experience, our understanding of tactics and trends in the battlefield and with connection with foreign companies who have quite mature technologies and solutions, I think it can give both sides some value,” said Athlon Avia CEO Vyunnyk.
What’s clear is that Ukraine has become the focal point for all European drone makers, so that “you can’t have a drone company that doesn’t get battle-tested in Ukraine,” Parzonka from Chatham House told DW.
Drone makers in Ukraine argue it’s their companies that will inevitably have the most experience and knowledge over battlefield integration.
Azhnyuk says that’s why he’s optimistic about the future of the sector. Companies will begin to grow once they have an export ability, winners will emerge and they’ll benefit from their special knowledge.
He believes companies will eventually be able to offer drone-services as a complete platform for European countries, handling not only manufacturing but training, software and hardware updates.
“The uniqueness of Ukraine’s situation and the strategic advantage that Ukraine has in the world now is that we’ve been at war with Russia for 11 years,” he argued, which is why it would be difficult for any European country to “provide that kind of service on a level that’s comparable with what Ukrainian companies can provide.”
Edited by: Uwe Hessler
