Ukraine is rapidly emerging as a centre for defence and dual-use technological innovation, accelerated by the ongoing war, according to Maria Repko, deputy executive director at the Centre for European Strategy (CES).

From autonomous systems to first person view (FPV) drones and cyber defence tools, the conflict is forcing Ukrainian engineers and tech firms to innovate at unprecedented speed, Repko told bne IntelliNews. 

“The war has made Ukraine a real-time testing ground for battlefield technologies,” Repko said. “R&D cycles are measured in days, not years. It’s cheap, fast and brutally effective.”

Repko noted that Ukraine’s innovation is not limited to military applications. “Ukraine combines several strategic advantages: a large, educated workforce (over 30mn people today, and nearly 40mn pre-war), abundant and cheap green energy — particularly from nuclear and renewables — and geographic proximity to key European markets,” she said. These factors, she added, make Ukraine a potential hub for high-value manufacturing and nearshoring once the war ends.

Real-time laboratory

According to Repko, the country’s rapid adaptation to wartime needs has fundamentally shifted how defence and dual-use technologies are developed. “Critically, Ukraine is now also a leader in dual-use and defence innovation,” she said.

A CES report, titled “Europe’s next frontier: why Ukraine matters now”, describes Ukraine as an “indispensable contributor to the continent’s defence”. Ukrainian innovations in drones, autonomous vehicles, and cybersecurity are increasingly attracting international attention, offering a model for how smaller economies can leapfrog traditional R&D timelines under urgent conditions.

“Even beyond defence, the skills and technologies developed in Ukraine have broad commercial applications,” Repko said. “Cybersecurity, AI, and advanced engineering developed under wartime pressures can feed into European tech and industrial sectors in peacetime.”

EU integration 

Ukraine’s integration with European supply chains is already deepening. The CES report argues that full economic and industrial integration into the EU could boost Europe’s competitiveness, industrial resilience, and energy security.

Before 2014, Ukraine’s economy remained largely tied to post-Soviet supply chains. But since Russia’s annexation of Crimea, trade patterns have shifted dramatically. The DCFTA agreement with the EU laid the groundwork for deeper integration, a process accelerated by wartime migration, which has created new personal and professional links across Europe. “Many European firms already source from Ukraine, and Ukrainian companies increasingly operate to EU standards,” Repko said.

She noted that EU accession is “crucial” for long-term investor confidence. “EU accession acts as a magnet for investment because it signals long-term market integration and legal stability,” she said. “The prospect of joining the EU Single Market is what transformed investor confidence in countries like Poland. Ukraine is following a similar path—just compressed into a much shorter timeline. Progress on EU chapters is already solid.”

The country has a highly educated population, a strong industrial base, and sectoral strengths that align with European needs. Advanced manufacturing, metallurgy, engineering, and IT form a robust foundation for future reconstruction and industrial expansion.

In the IT sector alone, Ukraine has more than 360,000 professionals, ranking eighth in Europe by workforce size. The country has developed reputations for cybersecurity, software development, and AI applications. “Ukraine has built strong reputations in cybersecurity, AI, and software development,” Repko said.

Wartime conditions 

Ukraine is operating under wartime conditions, meaning its potential in many areas cannot yet be fulfilled. Repko stresses the need for robust air defence and war-risk insurance to protect investors, assets, and goods. Workforce mismatches, both territorial and skills-related, require investment in mobility and training. Legal and institutional improvements are also necessary to reduce bureaucratic risks and strengthen the business climate.

The CES report highlights the synergy between Ukraine’s industrial capabilities and Europe’s strategic needs, from clean energy and green metallurgy to advanced R&D. It argues that post-war reconstruction could be a catalyst for relocating higher-value operations to Ukraine, boosting both local development and European competitiveness.

Repko considers “realistically” this will be mostly after the war. “High-value operations — from clean energy infrastructure and green metallurgy to advanced R&D — can and should be relocated to Ukraine once reconstruction begins and the security environment stabilises. The talent is there. The industrial base is there. And the alignment with EU needs—from green transition to defence innovation—couldn’t be clearer,” she told bne IntelliNews.

The CES report also points to Ukraine’s energy resources as a key advantage. Nuclear power, renewables, and natural gas could help reduce European dependence on external suppliers while supporting decarbonisation goals. Repko said that, with strategic investment, Ukraine could evolve from being an energy importer to a supplier of affordable, sustainable energy for Europe, further enhancing its role in regional competitiveness.

Overall, Repko and the CES report argue that Ukraine’s wartime innovations and industrial capabilities are helping to position it as a strategic partner for Europe. “If Russia is treated as a long-term threat—and many now do—then Ukraine's defence-tech ecosystem will remain highly relevant for decades,” she said.

By combining defence innovation, a skilled workforce, strong industrial sectors, and EU integration, CES analysts  consider Ukraine could not only rebuild after the war but also emerge as a key contributor to European competitiveness and security.

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