JULY 2025
Unleashing U.S. Military
Drone Dominance
What the United States Can Learn from Ukraine
By Kateryna Bondar
Executive Summary
In the wake of Russia’s 2022 full-scale invasion, Ukraine’s military and political leadership faced the
grim reality that its Soviet-inherited defense industrial base was riddled with corruption, institutional
inertia, and a closed culture. Yet this legacy sector, despite its dysfunction, remained indispensable to
Ukraine’s survival in the face of an existential threat.
What followed was not a slow reform but a wartime transformation. In just three years, Ukraine has
cultivated a defense technoloy ecosystem focused on unmanned systems that is agile and competitive.
This report, based on dozens of interviews with Ukrainian ocials, entrepreneurs, and military ocers,
tells the story of how this shift occurred under the extreme pressures of war. More importantly, it draws
out the central lesson for the United States and its allies: Any serious eort to prepare for the wars of the
future must incorporate options for radical decentralization, bottom-up innovation, and competitive
dynamism within the defense industrial base. The Ukrainian case is not conclusive, but it is a crucial
example of how free societies should adapt their defense sectors to meet modern threats with speed,
agility, and technological ingenuity.
KEY FINDINGS
1. Ukraine institutionalized a distinct “commercial-rst” defense market focused primarily
on innovative systems—such as unmanned platforms—by carving out a separate and
parallel budget within defense spending and radically simplifying and reducing onerous
acquisition rules for this market. Rather than relying on its legacy military-industrial complex
for innovative capabilities development, Ukraine turned to the commercial sector. The country
allocated a dedicated portion of its defense budget for acquiring new capabilities, originating
from commercial sector and established a new regulatory framework to enable rapid acquisition
