This report briefly examines the factors limiting the developing of defence-industrial collaboration between Ukraine and its allies, and how collaboration can be improved.

Tooling up together

How Europe and Ukraine can improve defence industrial collaboration

John Kennedy, Stuart Dee, Daniel Hill

ResearchPublished Dec 1, 2025

This report examines how Ukraine can improve its international defence industrial collaboration with allies. Although such collaboration has increased since February 2022, it remains insufficient relative to Ukraine's enormous needs. Ukraine cannot sustain its defence spending at the current level without allied support and must find ways to collaborate with allies to produce the advanced military equipment it needs. We offer two main findings. First, there is widespread support for further developing defence industrial collaboration in principle, and support for investment and partnership with Ukraine continues to increase, especially at the government-to-government, multilateral and European Union (EU) levels. In other words, there is no shortage of will for partnership with Ukraine. Second, however, there are numerous practical issues at a company level — including uncertainty, negative perceptions, bureaucracy, lack of resources, costs and structural disincentives — that hinder investment and collaboration, despite the efforts made by Ukrainian ministries to attract partners. A range of blockers also prevents Ukrainian companies from developing their businesses in Europe. As a result, defence industrial cooperation has been deterred in both directions, and the potential gains from collaboration have not been fully realised — not least the chance to hasten Russia's defeat. A joint approach to defence industrial collaboration that combines Ukraine's and its European partners' materiel requirements, entailing greater alignment of Ukraine's materiel requirements with Europe's emerging rearmament plans, is the optimal solution. However, since this policy shift remains an aspiration for now, this report sets out practical and ambitious measures that could facilitate more collaboration in the meantime.

Key Findings

What is Ukraine not doing well in terms of defence industrial cooperation? In brief, the research revealed that:

  • Wartime risks are a significant concern for European investors.
  • Corruption is deterring cooperation with European investors, and the Ukrainian business environment is considered opaque.
  • European investors need more information about Ukraine's defence procurement reform.
  • European investors perceive Ukraine's procurement processes to be uncoordinated.
  • European investors are uncertain about what Ukraine wants to acquire from and produce in cooperation with its partners.
  • Ukrainian investors face regulatory and technical barriers to accessing European markets, and their prospects depend on the development of EU defence market integration.

Recommendations

How can Ukraine improve its defence industrial collaboration with its partners? How can it improve its attractiveness to partners? In brief, the Ukrainian government should:

  • Ensure that the defence procurement process functions as intended, following the creation of the Defence Procurement Agency (DPA) and Strategic Logistics Operator (DOT), and the recommendations of the Strategic Defence and Procurement Review (SDPR).
  • Ensure predictability by outlining procurement requirements across the military domains in investment plans.
  • Communicate defence equipment needs and plans effectively and clarify specific opportunities for working with international partners.
  • Continue improving the business environment.
  • Propose the establishment of a joint unit with European partners to practically address the barriers to collaboration.

What are the possible models for improving co-production in Ukraine? In brief, the Ukrainian government should:

  • Prioritise the continuation and expansion of the 'Danish model' of procurement and seek to attract more private capital to support defence industrial expansion.
  • Ukraine should continue to pursue joint ventures (JVs) and licensing agreements, leveraging its appeal as a test bed for battlefield innovation to develop partnerships.

How can Ukraine improve its defence collaboration in terms of innovation and Learning and Development (L&D) to meet its battlefield needs? In brief, the Ukrainian government should:

  • Create a programme that attracts and enables European companies to test and evaluate new weapons.
  • Offer L&D based on defence industrial innovation expertise and battlespace management experience.
  • Create a new strategic Research and Development (R&D) campaign to address the outstanding challenges hindering the Russian defeat.

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Kennedy, John, Stuart Dee, and Daniel Hill, Tooling up together: How Europe and Ukraine can improve defence industrial collaboration. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA3833-4.html.
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