For three years, Ukraine has been teaching the world a lesson that many governments are slow to absorb: in modern war, innovation does not usually come from committees. It comes from people close to the problem, under unbearable pressure, trying something, failing, trying again, and finding the thing that works.
That lesson matters now because Europe is spending billions to help Ukraine defend itself. The intention is admirable. The execution is often less so.
“The major annoying thing we’ve been working with over the last year,” said Tymofiy Mylovanov, President of the Kyiv School of Economics, during a recent interview in Kyiv, “is that most of the funding from allies, Europe and the United States, comes with a preference for buying weapons from their own countries.”
The problem is not that Western weapons are useless. Some are indispensable. The problem, as Nataliia Shapoval, President of the KSE Institute, added, “Their weapons systems are more expensive than what Ukraine can afford,” she said. “And second, it prevents the development of what we need right now on the front line.”
That “right now” matters. A drone jammer that works today may be obsolete in three weeks. A cheap naval drone can challenge the logic of a billion-dollar ship. A unit testing five competing systems may learn faster than a ministry spending a year selecting one.
Mylovanov and Shapoval propose a better solution: joint ventures between Ukrainian companies and European or American partners.
The idea sounds simple. Pair Ukraine’s battlefield knowledge and fast-moving defense engineers with Western capital, manufacturing capacity, components, and access to markets. Let Ukrainians assess what the most urgent problems are. Let European and American firms bring production discipline and scale. Let both sides share risk and reward.
“We see the solution as financial instruments for joint ventures,” Mylovanov said. “More joint ventures, where Europe can spend on their producers, but also on joint projects between Ukraine and Europe.”
In theory, this is exactly what should be happening. In practice, it is legally and politically difficult. There are a few publicly known examples. Ukraine has not created a fully open, workable framework, and legally establishing these ventures can be hard. Governments are often more comfortable dealing with a handful of large defense contractors whose approach they understand.
Yet according to KSE research described in interviews for this story, these joint ventures are already happening. Quietly. Often below the radar. KSE researchers say they have identified more than 150 functioning joint ventures involving Ukrainian and foreign defense-related companies. They do not publicize the full list, in part because much of it is sensitive, and in part because some of these arrangements appear to exist in gray zones where the law has not caught up with battlefield reality.
“We went on a mission to prove that this is already happening,” Shapoval said, “because we want to stimulate more of it happening.”
The work, she said, involves talking with governments, companies, and analysts, then checking what can be verified through open sources. “Everyone is interested in what everyone else is doing,” she said. “Governments tell us where to look.”
That should not surprise anyone who has watched Ukraine’s war economy evolve. When people face an existential threat, they do not wait for perfect legal architecture. Engineers, soldiers, entrepreneurs, and financiers find one another because they have to. A unit needs a capability. A Ukrainian company can design part of it. A German, British, American, Polish, or Baltic company can supply another part. A working relationship begins. If it delivers, it grows.
This is the opposite of the “forced marriage” model, in which governments announce a partnership, designate companies, sign memoranda, and expect innovation to emerge.
The headlines can be impressive. The results can be thin. Bureaucracies are good at producing memoranda. They are not necessarily good at battlefield adaptation.
The most interesting finding from the KSE work is that the successful partnerships are often not led by the largest companies. Many involve small and medium-sized firms, including firms in Germany and other European countries that may be more agile, hungrier, and less protected by old procurement habits than the big defense “whales.”
“Even in Germany, it is not only the largest companies,” Mylovanov said. “Inside every European country, there are innovators competing with the larger companies. They are often more aggressive, more efficient, and better at what is needed now.”
War strips away illusion. A system either works or it does not. A drone either gets through or it does not. An electronic warfare device either protects a unit or it does not. Ukrainian soldiers and engineers are not interested in the procurement theater. They are interested in survival.
Russia has a different model. Its defense production draws on Soviet-era capacity and large state-directed enterprises such as Rostec. That model gives Moscow scale. “Ukraine is faster at coming up with something that works,” Shapoval said.
Joint ventures can bridge the gap between imagination and scale.
They are also a bridge between Ukraine’s war and Europe’s own defense awakening. European militaries are beginning to see that many of their doctrines were built for a different age. Expensive ships, armored platforms, and command systems must now be tested against cheap drone swarms, electronic warfare, and real-time targeting.
The lesson is not merely “buy Ukrainian drones.” The deeper lesson is: experiment faster, procure faster, learn faster.
The next stage requires Ukraine’s partners to resist the temptation to over-control the very innovation that has helped Ukraine endure. The hidden joint ventures are telling us something important. The market has already found a path.
Ukraine’s defense advantage is not only courage. It is not only Western aid. It is the astonishing speed with which private actors, small firms, soldiers, engineers, and entrepreneurs solve problems under fire.
The smartest policy now is not to force innovation into old procurement channels. It is to go with the flow of what already works. Joint ventures are not a side issue. They may be one of the most important ways Ukraine, Europe, and America can build the arsenal of the future while winning the war of the present.
Mitzi Perdue is a Senior Fellow at the Center for European Policy Analysis (CEPA) and Co-Founder of Mental Help Global.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
