This became particularly evident following the large-scale attacks by Iranian drones in the Middle East. According to military officials currently assisting partners from the US and Arab countries in the region in countering such attacks, intercepting a single Shahed drone, costing $70,000, sometimes requires up to eight Patriot air defence missiles, costing $3 million each, or even THAAD anti-missile systems, which cost tens of millions. Such interception costs are forcing many countries to seek cheaper solutions, and this is where interest in Ukrainian approaches, particularly interceptor drones, comes in.
The world very quickly realised that the Ukrainian experience is not just about specific aircraft. It is about tactics, the speed of engineering changes, adaptation to a complex and highly dynamic electronic warfare environment, the organisation of the mass deployment of UAVs, operator training, and a rapid modernisation cycle. In fact, a new industry has emerged here, bringing together manufacturers of drones, electronics, communications, software, optics, munitions, and training centres.
But any industry faces a simple problem: it cannot develop steadily if it works for just one customer — even if that customer is its own state during wartime. Government contracts depend on the budget, procedures, and priorities, and often come in unevenly. For a manufacturer, this means a constant shortage of working capital, difficulties in production planning, and limitations on development. The main casualty of this approach is R&D, as it is unrealistic to test new components without even minimal investment, and without constant research and testing of new products, the entire equipment upgrade cycle goes off the rails, depriving the troops of their technological advantage on the battlefield.
This is precisely why, for defence companies in the hi-tech cluster, entering foreign markets is not a matter of super-profits, but a matter of stability and growth. Exporting allows production to be utilised, investment to be made in new developments, enterprises to be scaled up, and spare capacity to be created.
The problem is that in the field of defence technologies, time is of the essence. It can take a year or more from the first meeting with a potential customer to the signing of a contract. If a company does not start negotiations today, the market may already be occupied by other suppliers a year from now. In this sector, a simple rule often applies: whoever is the first to deliver a fully functional system will secure not just one contract, but a series of contracts for years to come. If the system is also combat-proven, that is a real jackpot.
Whilst Ukrainian companies are wasting time on approvals and permits, foreign companies are actively attracting investment and capturing the market.
For example, the German company Quantum Systems has attracted around €160 million in investment and is actively expanding production, having opened a factory in Ukraine, testing its equipment, and incorporating Ukrainian expertise.
The German company Helsing has attracted approximately €600 million in investment and achieved a valuation of around $12 billion, building its business on next-generation defence technologies.
Merops, the company founded by former Google CEO Eric Schmidt, has organised the production of thousands of interceptor drones for the Middle Eastern markets. Where, meanwhile, are the hundreds of Ukrainian manufacturers? They are watching from the sidelines, unable to export, as visitors to the country reshape the drone technology market.
The result is a paradoxical situation. Ukraine is the place where new approaches to drone warfare are being developed, but large-scale investment, global companies and major contracts often materialise in other countries. In other words, the expertise is developed here, but the big money is made elsewhere.
This has direct economic consequences. Fewer international contracts mean less foreign exchange revenue, lower tax revenues, slower production growth and fewer jobs in the high-tech sector. Furthermore, companies are gradually beginning to relocate part of their operations abroad, opening offices, production facilities and legal entities there to gain access to customers, components, financing and the simplest possible logistics. In the long term, this means that technology and engineering teams will move abroad alongside the companies. Once the war is over, jobs, highly qualified specialists, top-class pilots and instructors will head abroad, followed by their families.
It is worth noting separately that the global criminal underworld is not standing idly by when it comes to drone technology, and some specialists may well end up on the dark side.
One often hears the argument that opening up exports could harm the supply of one’s own army. But in practice, the opposite is often the case. Export contracts give companies the opportunity to increase production, purchase equipment, and build up stockpiles and financial reserves. If necessary, this allows for the quicker provision of supplies to one’s own armed forces.
Another popular argument is that if exports are permitted, companies will simply move production abroad. In reality, companies begin to relocate their production activities precisely when they cannot grow within the country. Business is always looking for opportunities to grow. If it cannot grow at home, it begins to grow in another jurisdiction.
The global market for unmanned and robotic systems is still in its infancy. Roles are currently being defined, future leaders are emerging, and long-term alliances are being formed. In ten years’ time, this market will be consolidated, and it will be much harder to enter. In just four years’ time, by 2030, the global UAV market is estimated to be worth $90 billion. By way of comparison: in 2024, the market was worth $32.2 billion. A threefold increase in six years.
Therefore, the issue of defence technology exports is actually much broader than it seems. It is not merely a question of selling drones or other equipment. It is a question of where companies will be based, where engineers will work, where taxes will be paid, and which country will become one of the hubs of the new defence technology industry.
In fact, what is being decided today is not just the issue of exports. What is being decided is whether Ukraine will become a centre for defence technologies, or whether it will remain a place where these technologies are tested, after which they are scaled up and sold by companies in other countries.
Therefore, the phrase “you cannot ban exports” is not just a play on words. This is a matter of the economy, technology, defence capability and the country’s place in the world for the coming decades. And the main question here is not even whether to allow exports. The main question is whether we will manage to secure our place in this market whilst it is still taking shape.
There is another aspect that is rarely discussed. The export of defence technologies is not just about money and companies. It is also about international ties, military-technical cooperation, access to technology, joint development and a state’s political clout. Because states that supply defence technologies automatically become part of their partners’ security systems. This is a different level of relationship than simply trading in civilian goods.
In fact, defence exports create long-term alliances. If a country buys drones, communications systems, software or ammunition from you, it will depend on you for years for servicing, modernisation, training and spare parts. This means ongoing cooperation, joint exercises, the exchange of expertise and, often, political support.
Therefore, defence technologies are not merely an economic sector. They are a tool of foreign policy and influence.
Ukraine currently finds itself in a unique situation, one that no other country has experienced in recent decades. On the one hand, there is real-world experience of modern warfare, the widespread use of drones, electronic warfare, and a rapid cycle of innovation. On the other hand, there are hundreds of engineering teams and companies that have learnt to develop new solutions very quickly. This is effectively a new industry that has emerged in just a few years.
But no ‘window of opportunity’ remains open forever. Other countries are already investing billions in unmanned systems, autonomous platforms, artificial intelligence in the military sphere, “drone swarm” technology, interceptors, and robotic platforms at sea, on land and in the air. In a few years’ time, competition will be much fiercer, and combat experience alone will no longer be such a unique advantage.
So the question is very simple: either Ukrainian companies enter global markets now, occupy a niche, set up joint ventures, open service and training centres, and sign long-term contracts, or in a few years’ time this market will be occupied by others, and breaking into it will be much harder.
And then a paradoxical situation may arise: the state that was the first to demonstrate to the world the effectiveness of the mass deployment of combat drones will end up purchasing certain systems from large international defence companies that have grown precisely on the back of the experience of this war.
It sounds strange, but this has happened many times in the history of technology. Those who first invented or applied a technology do not always become the ones who profit most from it. The biggest profits go to those who have managed to scale up production, enter global markets and build large companies.
Therefore, the debate about exports is not really a debate about permission to sell a few thousand drones abroad. It is a debate about whether large, world-class defence technology companies will emerge in Ukraine. It is a discussion about where engineering centres will be located. It is a discussion about taxes, jobs and technological development. It is a discussion about whether Ukraine will become one of the hubs of the world’s new defence industry.
Because Ukrainian drones are no longer just about war. They are about the economy, about technology and, more broadly, about the country’s place in the world.
And if we do not change our approach now, in a few years’ time it may turn out that Ukraine has become the country that taught the world how to wage war with drones, but the main money, companies and global markets have ended up elsewhere.
And then the argument that ‘to export or to ban’ will shift from a debate to an acknowledgement of a missed opportunity.