Western arms makers are setting up in Ukraine. Kyiv gets firepower, NATO gets lessons in war.

Business Insider

25-07-2025

More and more Western defense companies are opening up operations in Ukraine and working with local firms.
A Ukrainian industry body called it a "win-win."
Ukraine gets more weapons, and Western companies learn from local experience.
Western arms makers aren't just sending weapons to Ukraine these days; they're moving in. As Russia's war drags on, NATO defense companies are opening offices, setting up new production lines, and working closely with Ukrainian partners inside the country at war.
For Ukraine, the payoff is that it gets faster, more customized firepower. For the West, it's access to something money can't usually buy: real-time lessons in modern warfare.
Ukraine's defense industry is offering hard-earned insights, and NATO countries are able to bring those secrets home before they need to use them themselves.
Talking with Business Insider, representatives of Ukraine's defense industry described Western defense companies working in Ukraine as a "win-win" because it helps them learn from the war and Ukraine's industry while also aiding Ukraine's fight against Russia's invasion.
And Many European leaders have acknowledged that their own domestic industries have much that they can learn from Ukraine's booming defense sector.
Ihor Fedirko, the CEO of the Ukrainian Council of Defense Industry, an industry body that represents over 100 Ukrainian defense companies, said Western companies that open offices and produce in Ukraine gain experience "for our type of work." The war is a fast-moving conflict where new tech and innovations are substantially changing how wars are fought, with new developments in drone technology being among the most noticeable.
Western companies in Ukraine
Among the growing number of Western defense companies that have opened up facilities in Ukraine are the German drone and aerial intelligence company Quantum Systems, which said last month that it will double its production capacity in Ukraine, and KNDS, a French-German defense group opening a subsidiary there.
British multinational arms and aerospace company BAE Systems has also set up in Ukraine, and Norwegian defense company Nammo signed an agreement to work with a Ukrainian defense firm. German arms manufacturer Rheinmetall has plans for multiple factories in Ukraine, including an ammunition production plant to make the Lynx infantry fighting vehicle.
Even Western companies without production facilities in Ukraine are testing their products there, working with local companies and soldiers and adapting in real time.
Kuldar Väärsi, the CEO of Estonian defense company Milrem Robotics, which makes military robotic systems like the THeMIS and has some in Ukraine, told BI his company works directly with Ukrainian industry to keep its systems relevant as well as "to work collaboratively to get the lessons learned from the war in Ukraine and help to improve the European defense equipment."
He said that Europe needs to learn from Ukraine's industry, "what works, what doesn't work, what needs to be shifted."
And then domestic operations like Brave1, a Ukrainian government-run defense technology and innovation platform, are creating opportunities for foreign companies to test their combat tech on the battlefield in Ukraine.
Luke Pollard, the UK's armed forces minister, said in May that "if you are a drone company and you do not have your kit on the front line in Ukraine, you might as well give up."
These developments bring a lot of warfighting technology to Ukraine, which needs both innovative solutions and firepower mass to hold its own against Russia.
What the West can learn
Troels Lund Poulsen, NATO ally Denmark's defense minister, told BI in February: "I think we have a lot to learn from Ukraine." He explained that he wants Danish defense companies to learn from Ukrainian ones so that they can "get some of the lessons learned from the defense companies in Ukraine back to Danish defense companies."
He said that by helping Ukraine, "some of the lessons learned will come back to Denmark, and that's a win-win, in fact, both for Ukrainian defense companies and also for Denmark."
Some of those lessons are coming back to Denmark through the new way it is getting weapons for Ukraine, Poulsen said. Known as the Danish model because it was pioneered by Denmark, the model sees countries buying weaponry for Ukraine directly from Ukrainian companies, which means weapons get to Ukraine faster and cheaper, without adding to the production backlog that defense companies all over Europe are seeing.
Denmark's new connection with Ukraine's defense industry means that lessons from those companies can get back to Danish ones, Poulsen said. He said one of the key lessons Denmark needs to adopt is "the way to produce fast."
The West is bracing for a serious conflict, such as a war between Russia and NATO or a fight between the US and China, and defense budgets are soaring. The war in Ukraine is offering insights into modern warfare, specifically what weapons, tactics, and training are needed for the future fight.
A key realization from this war is that in a major war, there is a need to produce weapons and equipment quickly. Denmark's prime minister, Mette Frederiksen, said in February that it's a problem "if a country at war can produce faster than the rest of us."
"I'm not saying we are at wartime," she said, "but we cannot say we are at peacetime anymore. So, we need to change our mindset."
Fedirko said that speed is something other European companies can learn from Ukrainian ones: "We can say that what our defense complex is rich with is the ability to scale up manufacturing. That's what we are very good at. So we have a very brief period between R&D."
He said Ukrainian companies are also "very swift in terms of testing and finding out any shortcomings and then refining them, addressing them, and then getting ready a new product."
He added that Ukraine has shown how fast it can create and scale up new types of weaponry, like drones.
Fredriko, NATO defense leaders, and warfare experts have all previously warned that Russia's invasion shows that the West needs to get a larger number of cheaper weapons that it can make quickly, rather than just focusing on a smaller number of advanced pieces of equipment. There has to be a balance between cheap mass and exquisite firepower, they say.
Ammunition is also key. NATO's secretary general warned this month that Russia makes as much ammunition in three months as NATO does in a year. In the war in Ukraine, ammunition has at times been a decisive factor in battles.
Working in Ukraine, Western companies get greater insight and clarity into the demands of large-scale modern wars. Russia has been getting these lessons firsthand. This is proving an opportunity for the West to catch up.