The Year of Breakthrough in Defence Tech: Highlights from a Large-Scale Study of the Ukrainian Defence Industry in 2024

The Ukrainian Institute for the Future and the Armament Manufacturers Council have published a major study on the Ukrainian defence industry in 2024. The document is freely available and contains more than 100 pages with the main results of Ukraine’s defence industry in 2024, the main problems of the industry, and the challenges for 2025. Defender has selected the study’s most interesting data related to defence innovation.

Technological breakthrough

Among the main trends in the Ukrainian defence industry in 2024, the authors of the study name the rapid development of defence technology in the state’s economy, the beginning of the active implementation of AI technologies in weapons and their production, and the scaling of ground robotic platforms (fire support, demining, logistics, evacuation).

“While in 2023 the main challenge was whether we could produce a sufficient number of UAVs – and we proved that we could – this year their quality has also improved: resistance to electronic warfare, communication, homing, and active work is underway to introduce artificial intelligence technologies,” the authors of the study note. They recall that drone production has been localised, and the country is already producing FPV drones from entirely Ukrainian components.

Key figures and facts on defence tech:

• The Ministry of Defence of Ukraine and the Ministry of Digital Transformation purchased 1.6 million drones of various types in 10 months of 2024 for over UAH 114 billion (2.75 billion USD);
• In 2024, Ukrainian-made drones accounted for 96.2% of all UAVs used by the Defence Forces;
• In 2024, Ukrainian enterprises manufactured and assembled more than 1.5 million FPV drones (in cooperation with the State Service of Special Communications and Information Protection of Ukraine), attack copters-bombers, kamikaze aircraft, and long-range Deep Strike drones;
• Commander-in-Chief of the Armed Forces of Ukraine Oleksandr Syrskyi noted that the supply of drones to the UAF increased 19 times in 2024, and the number of enemy targets hit and destroyed increased by 3.7 times;
• Last year, the Defence Procurement Agency financed contracts with 155 Ukrainian arms manufacturers. In particular, their share in UAV procurement exceeded 90% of the total contract amount and almost 50% of the total contract amount for electronic warfare.

What is expected from Ukrainian defence tech in 2025?

The study authors write that the MoD and MinDigit have already contracted 155,205 drones worth UAH 32.33 billion (770 million USD) for 2025. Drones are also being purchased by other units of the Ministry of Internal Affairs, the National Police, the National Guard, the Security Service of Ukraine, military units, and volunteer organisations.

According to analysts’ forecasts, in 2025, Ukrainian defence tech will focus on:

• strengthening missile and unmanned aerial vehicle programmes;
• innovative technologies and strategic partnerships with Western countries;
• further development of unmanned technologies, production of 30,000 long-range drones
• production of 3,000 cruise missiles and drone missiles.

About the market in general

The Ukrainian Institute for the Future notes that 2024 was a turning point for Ukraine’s defence industry. The industry showed six-fold growth, scaled up arms production, and significantly strengthened international relations. However, the key challenges – production volumes, financing, import substitution, and protection of production facilities – remain relevant.

Key figures:

• The defence industry’s production capacity increased 6-fold compared to 2023;
• The total volume of arms production in 2024 reached $10 billion (in 2022 – $1 billion, in 2023 – $3 billion);
• More than 800 state and private enterprises operate in the defence sector, more than 300 thousand specialists are involved;
• More than 1000 new models of weapons and equipment have been put into operation, half of which of which are Ukrainian-made;
• The share of Ukrainian production in the Armed Forces of Ukraine has reached 30%.

Analysts expect Ukraine’s arms production to grow at least threefold in 2025, to $30 billion.