November 28, 2023: The Ukrainian government has allocated billions of dollars to encourage Ukrainian weapons manufacturers, and not just existing firms, but startups as well as small operations that never considered the possibility of a large expansion. This is nothing new for Ukraine, which has been a center for weapons development and production for over a century. When Ukraine was still part of the Soviet Union before 1991, a disproportionate share of Soviet weapons development and manufacturing took place in Ukraine.

Since its independence in 1991, Ukraine continued to be a major arms exporter of weapons, ranking among the top 12 or 14 arms exporters worldwide. When Russia first attacked Ukraine in 2014, and took Crimea and portions of two other provinces, Ukraine realized that they had to export less Cold War surplus and concentrate on developing improved and new types of weapons. Ukraine is one of the new countries in the world that can do that besides the top five arms exporters (the U.S., Russia. China, Germany and Italy.) While the top three tend to remain the same, number four and five tend to change a lot. For example, South Korea has been expanding its arms production since the 1990s and now, because of demand from NATO nations that sent a lot of weapons to Ukraine, South Korea is poised to enter the Top Five.

Ukraine first began exporting arms immediately after the Soviet Union collapsed in 1991 because it was where the Soviets stored huge quantities of weapons the Soviets planned to use to reinforce an invasion of Western Europe. That invasion never happened but all those weapons were still in Ukraine and the Ukrainians made the most of it by finding export customers. That included offers to upgrade or customize exported weapons when the customer requested it and was willing to pay for it. In 1993 Ukraine was the 19th largest arms exporter but a decade later they were number 8 and, after the first Russian invasion in 2014, Ukraine fell to 13th place and by 2022 had dropped to 25th place.

Ukraine was developing and producing weapons but since Russia became more of a threat, the weapons were retained to deal with the Russians. After the 2022 Russian invasion there was also a huge increase in the activity of Ukrainian weapons developers who saw the need for new as well as improved existing weapons. The government responded with a program that had billions of dollars available to start or expand production of successful new weapons, notably UAVs. Many of these innovative and effective new weapons were developed by individuals or small groups. The success of these weapons, even in handmade prototype form, was enough to obtain cash for mass production.

The Russians often come up with countermeasures eventually, but the Ukrainian entrepreneurs are ready so that no Russian countermeasure remains effective for long. In this way, Ukrainians use their innovative and creative problem solving to obtain an edge in fighting the Russians. That justifies the billions Ukraine is now investing in its inventors and entrepreneurs.