← Back to Publications

Ukraine's Existential Innovation and the Pentagon's Procurement Trap

By Nathan Balis

June 8, 2025 | Military Technology | Ukraine

The Problem: Adapting to the New Drone Battlefield

Russia's invasion of Ukraine marked a turning point in the evolution of drone warfare. What had once been dominated by expensive, long-endurance platforms like the MQ-9 Reaper or RQ-4 Global Hawk, has shifted toward small, low-cost, attritable drones used for intelligence, surveillance, and reconnaissance (ISR), targeting, and kamikaze strikes. These systems, many adapted from commercial quadcopters, have become indispensable on an electronic warfare (EW)-saturated battlefield.

Legacy unmanned aerial vehicles (UAVs), while still useful in permissive environments or counterinsurgency missions, have proven ill-suited for high-intensity conflict where air superiority cannot be achieved. In Ukraine, survivability, modularity, and the ability to adapt rapidly to enemy countermeasures have outweighed endurance or sensor sophistication. The battle has become one of iteration over optimization, where new drone variants are deployed within weeks in response to frontline needs.

Early American-made platforms sent to Ukraine struggled to meet this challenge. While advanced in engineering and secure by design, they were often too expensive, insufficiently modular, and insufficiently resilient to jamming. Their performance exposed a deeper mismatch between U.S. drone development practices and the realities of modern war.

Recognizing this, the Department of Defense (DoD) launched the Replicator Initiative in August 2023 --- an ambitious program aimed at fielding thousands of attritable drones in short timelines. The goal is clear: to outpace adversaries by deploying swarms of intelligent, affordable systems at scale. But the initiative faces systemic headwinds in culture, bureaucracy, and supply chains.

Ukraine's Wartime Innovation Engine

No military in recent history has overhauled its procurement system as radically or as rapidly as Ukraine's. Since Russia's full-scale invasion in 2022, Ukraine has transformed its defense innovation model from a slow, state-dominated relic of the Soviet era into a de-centralized, start-up-driven ecosystem designed for speed, adaptability, and direct battlefield feedback.

This transformation was born out of necessity. On the frontlines, the use of drones has exploded --- from off-the-shelf quadcopters to first-person view (FPV) kamikaze drones and long-range one-way attack (OWA) systems. Ukrainian engineers, working in close contact with soldiers, have developed a constant feedback loop that enables design changes on the scale of days or weeks. Innovations such as fiber-optic communication lines, vision-based targeting, and anti-jamming systems have been implemented and iterated in real time. The result is an ecosystem where drones are not only expendable but evolvable.

This stands in stark contrast to Ukraine's pre-war defense model. Inheriting a Soviet-style procurement apparatus, Ukraine's defense industry was long dominated by the state-owned conglomerate Ukroboronprom. Plagued by bureaucracy, corruption, and inefficiency, R&D was centralized, opaque, and slow. Private-sector innovation was limited, and end-users had minimal influence over what was developed.

The war radically changed this. Faced with a crisis of survival, Ukraine outsourced procurement programs to private firms, streamlined regulation, and empowered engineers to work directly with combat units. According to CSIS, R&D and acquisition timelines were slashed across every phase, from requirements generation to contracting and deployment. This shift allowed for faster iteration and greater relevance: systems were often co-developed directly with soldiers.

Importantly, this shift was as much institutional as it was technological. Ukraine's government had to relinquish centralized control in favor of a more distributed, risk-tolerant model. The result has been a wartime innovation engine: responsive, modular, and purpose-built for the dynamic demands of the battlefield. It has enabled Ukraine to offset a massive personnel disadvantage and keep pace in the aerial domain.

While this transformation emerged under existential pressure, it offers critical lessons for larger militaries. Ukraine has proven that meaningful adaptation is possible by breaking down institutional barriers between engineers and soldiers, de-centralizing authority, and embracing short-cycle experimentation as a strategic asset.

The American Acquisition Problem

The U.S. defense acquisition process remains a major obstacle to fielding fast, affordable, and adaptive military technology. Officially, it proceeds through five structured phases:

  • Materiel Solution Analysis

  • Technology Maturation & Risk Reduction

  • Engineering & Manufacturing Development

  • Production & Deployment

  • Operations & Support

In principle, this system is designed to ensure accountability, technical rigor, and long-term sustainability. In practice, it is slow, rigid, and poorly suited to the pace of modern innovation. Requirements are shaped by bureaucratic reviews, influenced by political mandates, and translated into lengthy Requests for Proposals (RFPs) that emphasize compliance over creativity. From there, private contractors bid, contracts are awarded based on price and risk, and progress is monitored through milestone reviews and oversight bodies.

These issues are well-documented. As the Niskanen Center outlines, defense contracts frequently exceed budgets and miss deadlines. Cuts to in-house R&D, the elimination of overlapping development, and the addition of bureaucratic hurdles have contributed to stagnation. Strict penalties for deviating from contract specifications discourage innovation, while the contract model itself rewards firms for lobbying over engineering. Additionally, nearly all products are built-to-order, making it difficult to develop new technologies whose future applications are inherently unpredictable.

Compounding this are the dynamics of industry consolidation. Five dominant "prime" firms --- Lockheed Martin, Boeing, Raytheon, Northrop Grumman, and General Dynamics --- have consolidated the U.S. defense industry since the 1990s. While increasing the barriers to potentially disrupting and innovating firms, these primes are also hindered by inefficiency as a result of their sheer size. R&D stages that would otherwise take months in productive start-up environments end up taking years. This has seen frustrated engineers flock towards leaner engineering start-ups in recent years.

Firms like Anduril Industries have been vocal critics of the Pentagon's procurement model. In their 2023 report, Rebooting the Arsenal, Anduril argues that the DoD continues to underutilize software relative to hardware in its acquisition priorities, despite the growing importance of autonomy, AI, and networked systems in modern warfare. While Anduril's critique reflects its own software-centric product lineup, its core argument remains valid. Software development cycles are typically faster, more flexible, and lower-cost than those of traditional defense hardware. Especially in the context of drone warfare, where mission requirements can change quickly and systems must adapt to evolving countermeasures, the ability to iterate on code rapidly is essential to operational relevance.

To be clear, not every platform can or should be built like a software product. Systems such as submarines, aircraft carriers, or intercontinental missiles rightly require years of planning, testing, and risk management. But smaller Group 1 drones used for ISR, loitering munitions, or kamikaze missions operate on a different timescale. Their effectiveness depends less on long-term perfection than on short-term responsiveness. The current acquisition system, built to ensure stability and oversight, is fundamentally mismatched to this type of iterative development.

UAVs: Modularity, Speed, and Secure Sourcing

The war in Ukraine has demonstrated that low-cost, attritable drones succeed because they are both cheap and adaptable. These systems evolve in short cycles, often responding to battlefield feedback in a matter of days. That speed depends on two things: modular engineering and a procurement ecosystem that allows for real-time design changes. In Ukraine, that ecosystem emerged under duress. Engineers and soldiers work side-by-side, often integrating new payloads, navigation methods, or counter-EW technologies based on frontline needs. This process demands that drones be modular by design. Components like FPV cameras, fiber-optic spools, or radio links are swapped or upgraded without requiring total re-designs. Prototyping is fast, messy, and often successful not because it's elegant, but because it's responsive. In contrast, the Pentagon remains tied to an acquisition system that favors stability over speed. Modifications must pass through multiple layers of oversight. Narrow compliance, lengthy documentation, and milestone-based contracts make rapid iteration nearly impossible.

That model may suit billion-dollar aircraft programs, but not the realities of attritable drone warfare, where cycle speed directly defines battlefield relevance. In a high-intensity conflict, such as one over Taiwan, this gap could become fatal. Drones would play a central role in surveillance, denial, and targeting operations along the island and maritime zones. In the face of EW, decoys, and evolving enemy countermeasures, American UAVs will need to adapt just as quickly as Ukraine's. Without modularity and a way to shortcut red tape in times of urgency, even the most capable designs may underperform when it matters most.

But even when modular design principles are followed, American firms face a second major challenge: cost and sourcing. While several domestic companies --- including small UAV start-ups --- have developed capable quadcopters and fixed-wing platforms, many still cost tens of thousands of dollars per unit. The reason is simple: American-made, MIL-SPEC components aren't cheap. Key subsystems such as flight controllers, electric motors, data links, gimbals, and onboard computers are often produced by Chinese suppliers, whose manufacturing advantages remain unmatched. To counter this, the Pentagon established the Blue UAS list: a set of approved drone platforms that meet cybersecurity, operational, and sourcing criteria. This list bans components from China, Russia, Iran, and North Korea, including everything from microcontrollers to networking chips and ground control software. While this policy strengthens long-term resilience, it comes at a cost. Replacing globally sourced electronics with secure, American-made alternatives significantly drives up both unit costs and development lead times. Manufacturing advanced radio modules, vision systems, or secure processors in-house remains prohibitively expensive for most drone makers.

In short: the very security measures meant to safeguard American systems have made it harder to field them at scale and cost. Meeting the challenge of attritable drone warfare, then, requires more than just smart engineering. This process demands a structural shift: faster acquisition, modular design, and deliberate investment in secure, scalable domestic supply chains. The industrial logic needs to see fundamental, intentional change.

Roadmap for Reform: A Strategic Hypothesis

Stepping back, it becomes clear why the U.S. has struggled to produce a truly low-cost, attritable drone at scale. Two primary constraints --- the rigidity of the defense acquisition process and the high cost of secure domestic sourcing --- have hampered progress. Solving this is not just a question of engineering talent or manufacturing capacity, but of institutional architecture. If the U.S. is to compete in the future of drone warfare, key guiding factors are needed at both the design and policy levels.

Pentagon Level

  • De-centralize Acquisition: The single most important factor driving Ukraine's success in rapid drone development has been the direct feedback loop between soldiers at the front and the engineers designing their drones. In contrast, U.S. acquisition remains top-heavy, bureaucratic, and slow-moving. While the scale of the DoD makes full replication of Ukraine's model unlikely, combatant commands must be granted more autonomy, such as control over procurement budgets and authority to approve near-term design changes. The closer the design feedback loop gets to the end-user, the more adaptive U.S. systems can become. In a fast-paced conflict, such as one over Taiwan, delays of weeks or months could be operationally decisive.

  • Integrate Start-Ups: The U.S. possesses an unparalleled pool of technical talent, much of it concentrated in the start-up ecosystem. These firms are not only more agile than traditional defense primes but are often better suited to the iterative and adaptive nature of modern warfare. Rapid prototyping, flat hierarchies, and willingness to accept risk give them a unique advantage that the Pentagon must capitalize on. Start-ups should be urgently integrated into the core acquisition pipeline as potential lead developers.

  • Reduce Design-Change Barriers: Modular systems evolve quickly, meaning the approval, testing, and integration pathways must evolve with them. In Ukraine, battlefield feedback can be incorporated in a matter of days; in the U.S., it can take months just to formalize the need for change. Compliance reviews, testing requirements, and funding approvals form bottlenecks that innovation cannot rapidly pass through. The Pentagon should create wartime or contingency protocols that allow approved engineering teams to make design modifications with minimal administrative friction, especially for systems intended to be modular.

  • Commit to Scaled Production: Low-cost drones only become viable through economies of scale. Yet too often, defense firms delay scaling production because of uncertain contracts or slow-moving approvals. During the Ukraine war, European suppliers hesitated to ramp up manufacturing without long-term commitments --- a hesitation that constrained supply. The Pentagon must provide clear scale guarantees that allow companies to manufacture at volume with confidence. These guarantees can reduce marginal costs and incentivize domestic sourcing even when individual components are initially expensive.

Design Level:

  • Maintain Modularity: At the design level, modularity will remain a central aspect that will enable fast-paced changes without complete re-designs. Drone platforms should allow for easy swapping of payloads, sensors, communication modules, and even control systems. Non-essential components should be designed for rapid replacement or reconfiguration. This requires forethought at the conceptual stage, including clear architecture understanding of how future components might be adapted.

  • Ruthlessly Prototype: Good ideas must move from conceptual CAD to real-world testing as fast as possible. The Ukrainian drone ecosystem has relied on a mix of additive manufacturing, COTS integration, quick-turn machining, and DIY electronics to accelerate development. The U.S. must cultivate similar prototyping environments. While American systems must meet higher durability and interoperability standards, the culture of waiting for perfection must move more closely to one of learning-by-deployment. Ukrainian engineers have demonstrated the value of unleashing modular systems that have only been designed and tested in days. Real-world feedback is worth more than theoretical optimization.

Conclusion: Learning from Ukraine

Ukraine's defense of its territory has come at staggering human and material cost. Facing an existential threat, it has turned necessity into invention by transforming its procurement system and creating a model of military innovation defined by speed, modularity, and frontline feedback. The recent operation that disabled over 30 percent of Russia's strategic bomber fleet did not rely on expensive legacy platforms, but on cheap, attritable drones adapted to battlefield needs. These systems were improvised, stress-tested in combat, and shaped by the urgency of survival.

This model was not born out of preference but out of desperation. It has succeeded because the stakes for Ukraine are existential. Every delay in design or deployment has a cost measured in lives and territory. The creativity and resolve of Ukrainian engineers have proven that adaptive design can deliver meaningful strategic gains, even against a superior force.

The United States, by contrast, enjoys time, distance, and resources --- but cannot rely on these indefinitely. Its acquisition system, still dominated by legacy firms and rigid requirements, is poorly suited for the pace of modern conflict. If it waits for a similar crisis to spark reform, it may find that its systems arrive too late, too expensive, too inflexible, and ill-suited.

Reforming acquisition, de-centralizing decision-making, and empowering the engineering talent that already exists within America's start-up ecosystem are strategic necessities. Ukraine has shown what is possible when innovation is a matter of national survival. The U.S. should not need the same conditions to learn the same lesson.

Sources: