Unmanned aerial vehicles are one of the top priorities for additional funding of Ukraine’s Defense Forces. Private investment can play a critical role in scaling up defense manufacturing, especially if foreign governments provide protection against wartime risks.
Dan Rice, an American military expert, West Point graduate, and current president of the American University Kyiv, said this in an exclusive comment to Ukrinform.
” Drone technology is clearly reshaping the warfare. The militaries and non-state actors all over the world are learning from what’s going on in Ukraine – both from the Russian side but also from the Ukrainian side. Unfortunately, what we’ve seen is the Russian and Chinese manufacturing these uncrewed aircraft, uncrewered seaborne and land-based units. Their manufacturing capacities have been increasing so our enemies are getting bigger and stronger in this area,” Rice said.
On the other hand, he stressed that Ukraine is a global leader in this area, particularly among democratic nations.
“Ukraine is leading from the democratic side in terms of all areas of drone technology – the building, the design, R&D, the implementation stage, strategy and tactics,” he said.
Rice believes it would be highly beneficial for the West if Ukrainian experts trained colleagues in Latvia, Lithuania, Estonia, Poland, and Finland — countries also under threat from Russia. He stressed the need for Western countries to invest actively in technologies invented by Ukraine.
“Why would Estonia need to go through all R&D and come up with its own sea-based, land-based or airborne unit if they can just buy 10,000 or 20,000 units from Ukraine?” Rice said.
He praised Ukraine’s success in adapting existing drone platforms.
“In Ukraine, a lot of the frontline units are already adapting whatever is sent to them. They have little R&D labs all across the frontline with experts that know what’s working best in the local area. Once you standardize major platforms that have already been proven, like the Sea Baby or Magura, you can add different components to them, including electronic warfare, sea-to-air missiles to shoot down Russian aircraft, and so on,” Rice said.
Despite these strengths, Rice acknowledged that foreign private capital is still limited, primarily due to financial risks associated with the war.
“Currently a lot of defense production is being funded by private Ukrainian capital but it’s not seeing a lot of international capital flow, and that’s the important part that I think we need to see change,” he said.
To unlock global capital, he believes governments must step in to guarantee private investments — such as through the U.S. International Development Finance Corporation (DFC):
“Like the DFC, the Development Finance Corporation, which is the U.S. government arm. We’ve been working trying to get the DFC to invest in defense within Ukraine. If we can do that, this would eliminate downside risks for the private sector, and then private money comes in,” Rice said.
He explained that in an ideal world, we would see that one dollar from DFC would bring them three dollars from private sector.
“So a massive amount of capital will start to flow – that’s the concept behind DFC. It’s to help entice private sector investments, not just in defense but usually in areas like hotels, universities, etc. So I believe that DFC is taking a serious look at this and that will help,” he added.
He also urged other foreign governments to follow suit and invest in Ukraine’s defense sector.
“Ukraine can be a major defense industry to export to the U.S. and to all of Europe, to build out a lot of serious things that Ukraine approved and perfected on the battlefield,” he said, emphasizing the importance of protecting Ukraine’s intellectual property.
He said it was important that Ukraine retains intellectual property of the designs for each of their major unmanned platforms and components.
“Take the Baba Yaha quadcopter, the Magura sea drone, ground vehicles for evacuation of the wounded – those are very important technological advances that can save lives, not only for Ukraine but all across NATO,” Rice said.
He said one of the things Ukraine offers NATO is real world experience in the most modern war there is, and being able to teach others the lessons Ukraine learned the hard way.
On July 31, President Volodymyr Zelensky signed a law increasing defense spending, including funds for drone production.
Law No. 4561-IX “On the State Budget of Ukraine for 2025” provides for an increase of UAH 412.3 billion for the defense sector.
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Source: Drone production: Military expert explains role of private capital, government guarantees
