Defence industrial collaboration with Ukraine. Still not enough
Defence industrial cooperation with Ukraine is on the rise but still faces major obstacles that prevent much greater gains, a new RAND report finds. Fewer barriers and bolder actions between Ukraine and the rest of Europe are needed to unlock its full potential.
Despite its impressive growth in recent years, Ukraine’s defence industrial base still urgently needs greater funding, investment, and technology from European allies to meet battlefield demands and continue developing.
European-Ukrainian collaboration
Across Europe, demand for defence industrial collaboration with Ukraine is strong and still growing, as shown by several recently signed cooperation agreements. Yet European countries are increasingly focused on their own rearmament, while the United States is clearly scaling back its support.
In this context, the Ministry of Digital Transformation of Ukraine recently asked RAND Europe to analyse the main challenges in defence industrial cooperation and explore possible ways to improve it.
The report finds that the two sides remain insufficiently integrated and still lack mutual understanding. European investors are deterred by wartime risks, corruption, limited information, and the resulting uncertainty. Meanwhile, their Ukrainian counterparts face regulatory and technical barriers when entering European markets.
The ideal solution would be a full integration of the European and Ukrainian defence markets, enabling cooperation to fully benefit both sides. However, the authors note that such reform remains a distant and uncertain prospect.
The report points out that there is still much Ukraine can do on its own to make cooperation more effective. In particular, it should provide European partners with more information about its defence procurement, ensure greater predictability, and continue reforms in line with EU standards. The report also proposes creating a joint European–Ukrainian unit to address existing market access barriers and facilitate mutual defence trade and investment.
"Danish model"
One of the most important forms of cooperation today is the so-called Danish model, through which European countries fund Ukrainian defence companies by purchasing weapons in Ukraine for both themselves and Kyiv. The report praises this framework and calls for its further development, while emphasising the need for greater private-sector involvement given potential shortages in national funding.
Ukraine offers a unique value proposition for Europe — a robust innovation ecosystem and a real-world testing environment. The report urges Kyiv to leverage these assets to expand R&D collaboration, allowing European firms to contribute while Ukraine defines capability priorities.
RAND’s report shows that Ukraine must intensify its efforts to embed itself within the European defence industry ecosystem and become an indispensable part of it. The broader and deeper the cooperation, the stronger Ukraine’s position will be in attracting further investment. In this regard, governments must continue to set both the example and the foundation for private actors, while providing incentives for greater engagement.
