WASHINGTON DC – As Russia’s full-scale war against Ukraine drags toward another brutal winter, a new tension is coming into focus for Kyiv’s backers in Washington: Ukraine’s defense industry is finally firing on all cylinders – but the money to sustain it is running short.
At a Wednesday discussion hosted by the Center for Strategic and International Studies (CSIS), Ukraine watchers Max Bergmann, Maria Snegovaya, and Kateryna Bondar, joined by Carnegie Endowment’s Dara Massicot, mapped out the shifting balance between battlefield innovation and industrial capacity – and the hard fiscal math behind both.
Centralization dilemma: scale vs. speed
One of the panel’s defining themes was a clash of military cultures. Russia’s rigid hierarchy continues to grind forward, while Ukraine’s bottom-up, improvisational model is straining to scale.
“So it seems that both sides are trying to find this sort of sweet spot between centralization and decentralization,” said Bergmann, who moderated the discussion.
For Russia, that trade-off remains stark. “I think their disadvantage is that they are far more hierarchical and vertical, compared to the Ukrainian military and Ukrainian defense industrial base... That’s still a problem for the Russian military,” noted Massicot.
Ukraine, by contrast, has embraced a startup-style ecosystem – what Bondar called a “zoo of technology.”
The result is a burst of battlefield innovation, but also a lack of coordination. “What we see in Ukraine is a very decentralized system... it actually brings a lot of innovation, but what the government should do, and where it’s missing, is actually probably picking the champions,” she said.
The challenge now: turning that energy into industrial scale without choking the creativity that drives it.
Capacity without capital
The most jarring revelation came when Bondar described what she called Ukraine’s “industrial paradox.”
“If you listen to Ukrainian government officials and representatives of startups, for example, they all are saying that Ukrainian production capacity is exceeding buying capacity from the government,” she said.
In other words: Ukraine can build more weapons than it can afford to buy.
That imbalance is forcing officials in Kyiv to hunt for new financing models – from export contracts for battle-tested drones and munitions, to direct foreign orders placed with Ukrainian manufacturers. But wartime procurement carries its own hazards.
“And of course, there should be safeguards from corruption risks related to government procurement in Ukraine; they still exist. We have to acknowledge it, and it’s an issue,” Bondar cautioned.
Clash of systems
At a more strategic level, Maria Snegovaya argued that the war itself has become a contest of governance styles – one that mirrors the divide between the two armies.
“I have to say that I find it fascinating that the war that started as Putin’s effort to impose Russian-style governance on Ukraine in some ways also ended up being a competition between two modes of governance,” she said, contrasting Kyiv’s adaptive, decentralized approach with Moscow’s command-driven model.
Yet the question now, she warned, is whether adaptability alone can outlast authoritarian scale. The conflict, she said, “is now a war of attrition” – and history suggests that in such wars, centralized systems often hold the advantage.
“The strategic challenge,” Snegovaya said, “is whether this follows a Second World War model, where Russia suffers initial defeats only to regroup, learn, and push forward – or whether Ukraine’s decentralized, high-tech adaptation can fundamentally change the equation.”
The panel concluded by agreeing that Ukraine’s defense sector is proving it can innovate and produce. The question Washington is beginning to ask – and Kyiv cannot avoid – is whether it can afford to keep up.