The deputy minister of digital transformation is working to cut red tape and attract foreign investors to homegrown defense startups.
Russia’s war on Ukraine may last another ten years, according to a Ukrainian official who described his ministry’s effort to attract investment in defense start-ups working on everything from drones to AI.
“I think when the war is over, probably a decade from now, Ukraine has the perfect chance to become one of the leading countries in the world when it comes to defense equipment,” Alex Bornyakov, deputy minister of Ukraine’s Ministry of Digital Transformation, said Wednesday during a panel at the Defense One Tech Summit.
Bornyakov, a 41-year-old former entrepreneur, is practically an old man in his four-year-old ministry. His boss, Mykhailo Fedorov, is 32.
- The ministry was originally founded to digitize Ukraine’s government services. Since the start of the war, it has pivoted to security, including supporting the acquisition of military drones and schools that train soldiers to use them.
“The First World War was an artillery war, the Second World War was a motor war, and this is a drone war,” said Nataliia Kushnerska, the chief operating officer of Brave1, a new government-funded incubator for defense tech.
- Bornyakov’s ministry launched Brave1 on April 26, and now works with companies developing electronic warfare, navigation, geo-location, demining, artificial intelligence, Kushnerska said.
- Already, Ukraine’s Defense Ministry has certified three products for use by its forces.
“I would call it an intermediary success,” said Bornyakov.
- Among the Ministry of Digital Transformation’s priorities is radically reducing the bureaucracy needed to get weapons in the hands of the troops who needed them.
- Before the war, fielding a new technology might take three to five years. Now, their goal is to make it take as little as three months, Borynakov said.
Speeding up the process requires the Ministry of Digital Transformation to change laws, as they’ve done with drone-import regulations, as well as finding the right cadre of bureaucrats.
“There's a huge problem with people that are in a place, and for some reason they could keep paperwork for months,” Borynakov said. “Our goal is to win, and we cannot afford to lose so much time.”
Bornyakov’s ministry seeks to remove those who are unwilling, and promote more savvy managers. Among their employees are Ukrainians who have combat experience. “They have a natural motive to fight the enemy,” he said.
In addition to helping start-ups navigate the Ministry of Defense’s contracting process, Brave1 also gives grants, with 100 million hryvnias ($2.7 million) in capital so far. The first grants will be given in the next two to three weeks, Kushnerska said.
The Ministry of Digital Transformation is also seeking private investment to develop these new technologies. The Ministry has two funds funded by foreign capital worth around $50 million each, and it wants more.
- “Most of the well-known funds are out of the picture,” said Bornyakov, due to their unwillingness to invest in defense products.
- Ukraine is also in talks with NATO’s Defence Innovation Accelerator for the North Atlantic, or DIANA; he said he had a “good conversation” with them.
- Ukraine is also interested in working with the investment arms of major U.S. defense providers such as Lockheed Martin, but Bornyakov described little progress so far.
Russia, meanwhile, has nearly the opposite problem, said Sam Bendett, an analyst at CNA who follows the use of drones in the Russia-Ukraine war.
While Ukraine’s state has embraced start-ups as key to defense, Russia’s goliath defense industry is uninterested in ceding way to upstarts pitching cheaper platforms like the quad-copter drones that have dominated Ukraine’s battlefields.
“A lot of people in the Russian military are not interested in very cheap and expendable solutions,” Bendett said. “When a massive defense company like Almaz Antei wants to build a quad-copter, it’s going to build its own quad-copter.”
Russia’s slow-moving defense industry isn’t necessarily a battlefield liability it might seem though, Bendett cautioned, noting Russia’s widescale and effective use of Iranian suicide drones like the Shahed.
The Russian military “still is rather objective and realistic when it comes to adopting other technologies which already exist,” Bendett said.
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