A $500 attack drone costs millions to repel. It's an economic war, and the West is losing

Globe and Mail

4 days ago

Omar Saleh is the chief commercial officer at North Vector Dynamics
Paul Ziadé is the chief executive officer at North Vector Dynamics and an associate professor at the University of Calgary
Canada and its allies face a new kind of economic warfare. In early 2024, a US$2.1-billion U.S. Navy destroyer used a US$2.1-million SM-2 missile to shoot down a US$500 one-way attack drone launched by Houthi rebels over the Red Sea. It wasn't the first time. Over several weeks, the United States and its allies expended more than a billion dollars in high-end munitions defending commercial shipping lanes against threats that, in many cases, cost the enemy a few hundred dollars each to launch.
This isn't a tactical mismatch. It's an economic war – and we're losing it.
For more than a decade, Western defence procurement has drifted toward the exquisite. Precision, complexity and integration have become synonymous with capability. But in Ukraine, Gaza, Yemen and across every theatre of war now defined by drones, the shape of modern warfare has shifted. The most strategically disruptive systems aren't the most advanced – they're the most affordable, adaptable and numerous.
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And yet, most Counter-Unmanned Aerial Systems (CUAS) today are built to fight a different war. A war of doctrine, not of contact. A war where every engagement is clean, jammed signals mean safety and supply lines never break. Where the defender always has more – more equipment, more time, more missiles.
That kind of war doesn't exist any more.
Drones have flipped the battlefield. Every new drone engagement pushes the same question to the surface: how long can Canada and its allies outspend an adversary before the ledger becomes the real battlefield?
In Ukraine, US$39,000 Shaheds and US$35,000 Lancets have knocked out multimillion-dollar NATO tanks and air defence systems. In Gaza, rockets costing a few hundred dollars have triggered US$40,000–US$50,000 Iron Dome interceptors – and occasionally slipped through. In the Red Sea, low-end drones have forced the U.S. Navy to expend US$3-million missiles while still managing to strike commercial vessels. Across every theatre, the attacker's return on investment keeps improving. Even when intercepted, the cost ratio favours the offence. When not, the damage speaks for itself.
According to the U.K.'s Royal United Services Institute (RUSI), a British defence and security think tank, drones are now responsible for 60 to 70 per cent of all damaged and destroyed Russian equipment in Ukraine. Many of these are low-cost tactical drones operating within 10- to 30-kilometre ranges. A growing proportion are equipped with AI guidance, allowing them to autonomously lock on to targets even if radio frequency links are jammed. Research by CSIS shows that while human-piloted drones achieve 10- to 20-per-cent hit rates, AI-enabled systems can exceed 70 to 80 per cent, reducing the number of drones needed to destroy a target by a factor of four.
This means adversaries can now field smaller, cheaper and smarter swarms, making each engagement harder to detect, harder to track, harder to kill. And every step in that chain bleeds time, money and readiness.
And now the math is getting worse.
Sure, defence has always cost more than offence. That's not new. You spend more to protect something valuable than to destroy something expendable.
But the current dynamic goes well beyond asymmetry. These drones are not just nuisance threats. They're destructive, strategic tools of exhaustion. Their job isn't just to penetrate air defences. It's to exhaust them. It's to force defenders to burn through interceptors, reposition assets and respond faster than procurement cycles allow.
The goal isn't precision. It's volume. Time. Attrition.
This is not about one drone versus one missile. It's about the balance of industrial capacity and the economics of attrition. If the cost to stay in the fight keeps rising for defenders and falling for attackers, the outcome won't hinge on technology. It'll hinge on who runs out of options first.
Why, then, do we continue to field US$15-million truck-mounted CUAS to intercept drones worth less than a used iPhone?
The problem isn't capability – it's culture. The Western defence procurement ecosystem isn't built to reward cost-efficiency. It rewards integration, vendor relationships, program longevity and adherence to legacy doctrine.
Major defence firms still push gold-plated, monolithic systems built for complex and tightly controlled battlefields. And for high-end threats, this makes sense. But against swarms of cheap drones, this is like buying a luxury SUV to operate a motorcycle courier service – reliable, expensive and completely mismatched to the problem.
The result is predictable: exquisite systems deployed for every threat, until the cost-per-kill breaks the budget and operational tempo grinds to a halt.
This is where conventional military logic breaks down. If you design a missile to hit a drone with 98-per-cent reliability and a $100,000 price tag, you'll win every engagement. That is, until you run out of money, interceptors or political will.
That's not a strategy. That's a liability.
As Gen. Sir Patrick Sanders, former U.K. chief of the general staff, warned in late 2023, 'We are now in a race to mass. Wars of the future will be won by those who can deploy at scale, not by those with the most sophisticated single asset.'
This point applies far beyond Britain: mass, modularity and replenishment will define survivability in the drone age.
Modern CUAS architecture needs to do more than just bring down drones. It must bend the cost curve of battlefield survivability. That means building systems around a new set of assumptions: That sensing and targeting systems can be blinded or thrown off. That there may be nothing to jam, either because control runs through fibre-optic cable or because it's guided by AI that won't miss. That the next wave won't be the last one.
What's needed is a shift – from complex, centralized systems toward modular, distributed and affordable components that can degrade gracefully under fire, replenish quickly and keep operating without perfect infrastructure or exquisite command-and-control.
This isn't a call to abandon integration. It's a call to rethink where the centre of gravity is in CUAS architecture. And that is not in centralized control towers, but in distributed launch points. Not in high-profile weapons platforms, but in low-cost surveillance drones and expendable strike units.
Some defence firms are already moving in this direction. Others are still locked into exquisite, top-heavy systems – built to serve entire divisions, not squads – that can't deploy without weeks of preparation.
But the battlefield is no longer waiting for integration timelines or procurement cycles. It's defined by who can absorb losses, reconstitute quickly and operate without the illusion of perfect conditions.
Canada, with its $26.5-billion defence budget and 1.76 per cent of GDP spending – below NATO's 2-per-cent target – can't afford to fire million-dollar missiles at $500 drones. Modernizing NORAD and meeting NATO commitments demand affordable, scalable defences against this growing threat.
Procurement agencies must prioritize systems that can be deployed by platoons, resupplied in hours and purchased in volume. The future doesn't belong to the side with the most expensive defence system. It belongs to the side that can afford to keep fighting – and defend long enough to win.