Ukraine's defense technology industry (defence tech) is facing challenges that could prove fatal to its development. According to experts, the main threat is not a lack of production capacity or high competition, but chaotic financing and a complete absence of long-term order planning.

This issue was highlighted by Victoria Kulchytska, Commercial Director of Trypillian, in an interview with RBC-Ukraine. According to her, without a clear forecasting horizon, it is impossible to effectively manage resources, purchase necessary equipment, and retain qualified teams.

The problem of working capital and logistics

The creation and maintenance of production for unmanned aerial vehicles and other weapons require colossal investments. As Kulchytska noted, this involves thousands of jobs and complex infrastructure. Ensuring their operation without long-term contracts guaranteeing the inflow of funds is practically impossible.

The situation is exacerbated by the complex logistics of component supply. Due to the need to bypass sanctions and operate under wartime conditions, delivery routes become long and unpredictable. Component suppliers require constant prepayment, forcing companies to keep significant amounts of capital in circulation. Without stable financing, such a maneuver becomes an insurmountable burden.

Survival factors in conditions of uncertainty

In current realities, only those enterprises that have managed to balance several critical factors survive in the market:

  • Strict adherence to serial production discipline.
  • The ability to quickly modernize the product in response to changing tactical tasks.
  • Flexibility in resource management.

However, as the head of Trypillian emphasizes, even these qualities cannot fully compensate for the lack of state procurement planning. Predictability of demand is necessary for the stable operation of the entire industry.

Export as a solution: clear rules are needed

One of the ways to solve the problem of financing and industry development, experts see in opening up the export of military products. However, according to Victoria Kulchytska, clear and transparent rules of the game must be created for this.

The main condition is equal opportunities for all companies operating in the market and the priority satisfaction of the needs of their own armed forces. Only by adhering to these principles can Ukraine's defense industry move from a survival mode to sustainable development.