Drones Win Battles, Components Win Wars

Few military developments in recent history have matched the scale and speed of Ukraine’s drone transformation. In just three years, Ukrainian production surged from an estimated 3,000-5,000 drones in 2022 to over 2.2 million by 2024, with projections reaching 4.5 million in 2025.Yet beneath this manufacturing success lies a critical strategic vulnerability.

Ukraine’s Drone Surge: Impressive, but Import-Dependent

Many essential drone components are not produced in Ukraine. A significant share originates from China, whose dominance in dual-use commercial drone subsystems has made it the de facto arsenal for much of Ukraine’s unmanned capability. Recent Chinese export restrictions have severely strained Ukraine’s production capacity and exposed the vulnerability of its supply chains.

This presents two major challenges. First, strategic dependency: Ukraine’s battlefield effectiveness rests on supply chains controlled by geopolitical rivals, raising questions about sustainability, resilience and the potential for supply disruption. Second, lost value creation: by outsourcing key components, Ukraine forfeits much of the economic, technological and sovereign value associated with innovation leadership. As drones become a central pillar of 21st-century military power, this lack of component-level mastery becomes a liability.

The Illusion of Platform-Centric Innovation

Despite the rapid evolution of warfare visible in Ukraine, NATO procurement systems remain heavily platform-centric, rooted in Cold War-era models where weapons systems were developed as integrated, monolithic platforms. These systems are treated as indivisible wholes, with procurement cycles often stretching over 10 to 20 years and upgrades requiring entire programme restructurings. This legacy approach treats innovation as a rare event rather than a continuous process.

By contrast, Ukraine has demonstrated an agile integration model. Its drone ecosystem, while dependent on imported parts, is characterised by the ability to rapidly test, modify and redeploy systems in weeks rather than years. Developers work closely with frontline operators. Feedback loops are short. Civilian parts are adapted for battlefield use. In this model, innovation is not the invention of a new platform, but the optimisation of how components work together.

Despite repeated policy efforts and growing awareness of the need for agility, NATO-aligned procurement systems have yet to translate modular or open architecture principles into meaningful operational outcomes. As recent Government Accountability Office analysis confirms, within the US Department of Defence implementation of modular open systems remains inconsistent, with fragmented planning, missing cost–benefit analysis and limited portfolio coordination. In essence, the intent to modernise exists, but the institutional machinery has not caught up.

Mapping the Realities of Modern Warfare

To understand where innovation occurs in modern warfare, and why NATO’s approach must evolve, it is helpful to move beyond platform thinking and analyse innovation at the component level. One way to visualise this is through a two-axis matrix: The horizontal axis distinguishes the origin of the component: civilian or military, while the vertical axis captures the innovation cycle: short or long.

This innovation matrix yields four zones, each with distinct characteristics and institutional requirements:

Zone A (civilian, short-cycle) includes fast-evolving components like sensors and batteries, critical to Ukraine’s agile drone systems.

Zone B (civilian, long-cycle) covers infrastructure like satellites, with indirect battlefield impact.

Zone C (military, short-cycle) involves adaptive systems like EW modules or agile drone software designed for frontline use.

Zone D (military, long-cycle) remains NATO’s core: warheads, encryption and hardened systems. Slow to evolve and no longer sufficient alone for battlefield superiority.

This matrix reveals a hard learning: battlefield relevance now depends on dominance in Zones A and C: the fast-cycle spaces. Yet these zones are where NATO is weakest. Procurement models remain too slow, risk-averse and siloed to absorb fast-moving technologies. Conversely, authoritarian adversaries and agile defence ecosystems like Ukraine’s have learned to operate across the matrix with modular flexibility.

The recent UK Strategic Defence Review recognises this shift. It calls for faster integration pathways, better use of dual-use technologies and modular procurement logic. The lesson is clear: NATO must adopt zone-specific strategies. Zone D still matters but future battlefield edge will come from the ability to integrate rapidly evolving components from Zones A and C. This requires new acquisition pathways, stronger industrial partnerships, and above all, cultural change.

Sovereignty, Speed and Strategy: Why Components Matter Most

As Stacie Pettyjohn, Director of the Defence Program at CNAS, recently stated: ‘We are really, really behind . . . Every single drone here is inferior in quality and costs more than DJI drones . . . We don’t have the industrial base that can produce those right now.’

Dependency on foreign suppliers, particularly from geopolitical rivals, creates a dual vulnerability: supply disruption and embedded surveillance. Components sourced from China are subject to export restrictions, supply chain manipulation and potential malware or backdoor risks. A single policy shift in Beijing could disrupt thousands of systems on the front line.

For NATO nations, relying on these supply chains is a strategic liability. Loitering munitions, small drones and expendable EW platforms now constitute the first strike and surveillance tools of modern war. If the West does not control the components within them, it risks losing both sovereignty and initiative.

Beyond the strategic risk, outsourcing drone components means forfeiting economic opportunity and industrial leadership. Ukraine’s drone industry, despite producing millions of units, generates limited domestic value capture because key components are foreign made. Similarly, Western nations that assemble drones using imported parts are failing to invest in next-generation domestic suppliers of inertial sensors, secure flight controllers and energy-dense batteries.

This failure echoes a broader industrial dilemma: fielding innovative systems while hollowing out the industrial base that sustains them. NATO countries must resist the temptation to chase short-term battlefield utility by importing ‘black box’ components at the cost of long-term capability sovereignty.

Controlling the component supply chain is not only a question of sovereignty, but also the foundation of innovation speed. When manufacturers rely on off-the-shelf, opaque components, they cannot easily iterate, modify or improve the system. In contrast, mastery of component-level technologies allows for: faster adaptation cycles, modular upgrades and resilience under stress.

As RAND observed in 2022, traditional procurement models often treat components as static elements within tightly managed platforms, rather than as potential levers for innovation. This disconnect hampers the ability to integrate fast-moving commercial technologies into operational systems. In today’s battlespace, the opposite is true: the component is the battlefield.

From Platform Control to Stack Mastery

NATO’s strategic response to drone warfare must begin with a conceptual shift: drones are no longer best understood as standalone platforms but as modular. Their battlefield relevance, adaptability and resilience increasingly depend on the stack of integrated subsystems within: optics, radios, guidance software, power systems, warhead and more. Mastery of this stack is now central to both operational and strategic success.

This means investing not only in national production capacity, but in the ability to rapidly certify, integrate and scale critical components. NATO’s procurement logic must evolve beyond awarding contracts for full systems toward creating more agile structures that allow competition, experimentation and iterative upgrades at the subsystem level.

Each subsystem has its own development dynamics. Some, like warheads and fuses, are slow to evolve and require stringent validation. But these long-cycle, high-certainty components can serve as ‘anchor-points’ around which faster-moving technologies can be integrated and iterated. Building NATO’s drone forces around these fixed, sovereign elements while allowing modular variation in other parts of the system offers both stability and speed.

Sovereignty, too, must be reframed. Ukraine’s current drone advantage depends on components largely sourced from abroad, particularly China. This leaves the country vulnerable to disruption and undermines longer-term industrial independence. NATO, by contrast, has the resources and alliances to build resilient supply chains for critical subsystems, if procurement logic and investment priorities are realigned accordingly. Doing so would also deliver long-term economic and technological benefits, anchoring industrial capacity in allied countries rather than outsourcing key technologies.

To keep pace with the speed of modern battlefield innovation, NATO must treat drones not as finished products to be acquired but as evolving architectures to be mastered. Qualification pathways for dual-use technologies, faster integration timelines, modular certification regimes and persistent battlefield feedback loops must all become standard. The goal is not just deterrence, it is to ensure that NATO remains innovation-ready in the domain of drone warfare, with forces capable of adapting as fast as the battlefield demands.

© Mirko Niederkofler, 2025, published by RUSI with permission of the author.

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