Ukraine's defense innovation boom has been driven largely by startups - small, agile firms that emerged after Russia's full-scale invasion and built products at a pace that legacy defense contractors cannot match. But many of these companies now face a dilemma: the European partners who want their technology are also potential competitors, and sharing know-how could mean losing the very edge that makes them valuable.
That tension threatens to slow the defense integration that both sides need, Elina Ribakova and Lucas Risinger argue in Foreign Affairs, as "Hvylya" reports. Ukrainian companies, particularly the younger startups, lack the resources and experience to navigate cross-border regulations. They fear that entering partnerships with larger European firms will cost them their intellectual property without adequate legal protection.
The concern is not unfounded. Ukraine's legal frameworks governing technology transfers are not yet harmonized with the EU, creating uncertainty on both sides. European firms, for their part, struggle to conduct basic due diligence in Ukraine - opaque ownership structures and inconsistent financial accounts make it difficult to verify financing and legal compliance.
The authors propose a two-track solution. Kyiv should harmonize its technology transfer laws with EU standards and educate Ukrainian firms about the contractual protections already available under existing law and international arbitration frameworks. At the same time, the government should help Ukrainian enterprises standardize their financial planning and governance structures so European investors can verify what they are buying into.
On the European side, governments need to do more than issue political declarations. Procurement guarantees, insurance backstops, and tax breaks are essential to make joint ventures attractive for private firms. European defense companies are profit-driven: access to Ukrainian battlefield technology is attractive, but not attractive enough to justify the capital expenditure of a joint venture without some assurance of demand. European armed forces also need to start treating drones and unmanned systems as standard infantry tools rather than specialized assets, placing consistent procurement orders that give companies confidence to invest in joint production.
The stakes are high for both sides. Ukraine needs the capital to unlock its idle defense production capacity - estimated at $25 billion to $40 billion. Europe needs the technology and battlefield expertise that Ukraine has spent four years developing under fire. The regulatory and financial barriers standing between them, the authors argue, are solvable problems - but only if both sides treat defense integration as an economic priority, not just a political aspiration.
Also read: Why ammunition supply chains cannot keep pace with modern defense demands.