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Earlier this month I spent some time in Lviv, Ukraine, home to the country’s annual IT Arena event which serves as a showcase for what has become the world’s fastest evolving defencetech ecosystem. I could tell you all about how it’s an exceptional event in one of the world’s most beautiful cities (it really is on both counts), or how this year’s startup competition winners were an exceptionally sophisticated group (see Sirocco Energy, Zmiyar, Versi Bionics) or how the event attracts a large number of foreign defence investors (namely from Japan, Taiwan and the rest of Europe). But instead, let me tell you a short story that captures how the Ukrainian defencetech ecosystem has developed so quickly.
Back in the fall of 2022, I traveled to Lviv to film part of my first short documentary, Made with Bravery, about how Ukrainian entrepreneurs and others were adjusting to the effects of the full-scale invasion. At the time, there was no ‘defencetech’ present in Ukraine, just a handful (seven to be exact) of Dji drone suppliers and a couple of garage enthusiasts. However, by the time of my second visit in mid-2023, the country’s drone and UAV scene was quickly taking shape with hundreds of startups now iterating solutions for front line units. This story, and the role of the government’s exceptionally efficient Brave1 initiative, is well covered in many places.
However I’ll draw attention to one part of this story that captures what’s happened. In that original documentary, we featured an entrepreneur, Yaroslav Azhnyuk, who was working in the hardware space. His company, PetCube, used a combination of cameras, sensors and robotics to … throw pet food to and play with lonely pets. When we interviewed him he was still #pettech, albeit thinking actively about how he and his fellow entrepreneurs could contribute to the war effort.
A few months after that interview, the Brave1 initiative started to take shape through the use of small grants ($15-40K USD) to fund ideation and testing on the front line. Yaroslav was part of the group that set in motion what became Brave1. Not long after, he began to transition from consumer (ahem, pet) to defence applications through the creation of his new company ‘the Fourth Law'. This clip of Yaroslav at the Kyiv Security Forum earlier this year highlights the shift.
Companies like Yaroslav’s are now part and parcel of a defencetech ecosystem that counts over 2500 companies. And while the size of the ecosystem and its rapid growth is what gets most attention, perhaps more important is that in the span of just a couple of years, these companies have gone from sourcing nearly all of their components abroad (namely in China), to producing nearly 95% of components domestically. Amongst the many lessons from this conflict and the subsequent development of Ukraine’s defencetech sphere, is that a sovereign supply chain is a core requirement of the production capabilities necessary to defend oneself.
But that supply chain leads us to another challenge and lesson: production at scale during a conflict is … difficult. This is why Ukrainian UAV and other defence companies have been actively seeking international partners to whom they can shift production. Hamilton-headquartered drone startup SentinelR&D’s partnership with leading Ukrainian UAV producer AirLogix was the first of these for a Canadian company. Their success highlights the tremendous potential to accelerate the Canada-Ukraine partnership; Ukrainian defence companies need production capacity and investment, whereas more nascent Canadian defencetech companies need battlefield experience and the tested intellectual property that comes with it.
And so while every order of government in Canada, alongside nearly every ecosystem player, is pivoting to defence, we should be doing so in a manner that acknowledges how fast this space is moving. We should also acknowledge what we don’t know compared to our friends in Ukraine as well as in other front line Baltic and Nordic states that have moved more quickly out of necessity. Engagement and partnership with these sector leaders is an imperative to ensure that the billions being pushed towards defence in Canada are spent developing what’s next, and not what others are already in the process of solving.
Without making light of the deep losses suffered in Ukraine, we have much to learn from the living lab it has built to defend itself and advance defence technology for the world.
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