Fast-paced, iterative, gritty and incredibly successful innovation is sustaining Ukraine’s defence against Russia’s invasion. The country’s latest defence industry revolution is the Brave1 Market, an e-commerce platform launched in April that builds on the Brave1 military defence cluster established in 2023.
Together the online market and the cluster provide a new blueprint for improving defence and industry policy, and Australia needs to learn from it.
Ukraine has rightly won acclaim for its new battlefield technologies and their skilful use, but the redesign of military procurement underpinning it has received less attention. Ukrainian defence policy emphasises innovation and consistently creates qualitative battlefield advantages. Achieving this has required an overhaul of procurement, logistics and the relationship between Ukraine’s Ministry of Defence and private industry.
Ukraine established the unorthodox Brave1 defence innovation cluster in April 2023. A representative of the organisation outlined its key details in an interview conducted by email for this article.
Brave1 has supported rapid growth in the number of Ukrainian defence companies from a few dozen to more than 1500. Many of the companies are necessarily small to medium-sized enterprises, highly specialised, and they focus on integrating research and development into production.
While Ukraine benefits from the small, skilled defence industry it had before full-scale Russian invasion began in 2022, the sector was maintenance-focused and shrinking. It is now transformed, integrating non-traditional skillsets, accessible funding and competitive domestic procurement.
Ukraine’s Army of Drones bonus program, also called a ‘points for kills’ system, was the foundation for the new e-commerce platform. It is a window into the secrets of Ukraine’s innovative governance approach. At its core is a triangular feedback loop sits that brings together industrially produced cutting-edge drone technology, enhanced logistics for soldiers and real-time battlefield intelligence.
The feedback triangle. Source: author.
Each corner of the triangle plays its role. Ukrainian military command dictates strategy, controls the ePoints system by setting the values of targets, analyses intelligence and pays the industry for products. Soldiers score kills, upload videos to verify them (also providing excellent battlefield intelligence) and use points they thereby earn to order more equipment. They can even leave user reviews. The industry creates the technology and innovates in design, integrating new ideas and feedback received from the front.
Brave1’s work spans the entire cycle, ‘from analyzing needs of frontline troops, to developing and deploying solutions on the battlefield,’ says the representative, who cannot be named.
The ease with which soldiers and manufacturers directly communicate is enormously valuable and crucial to sustaining the pace of innovation. Brave1 says that, thanks to technology and effective policy design, new designs using battlefield experience can ‘move from concept to battlefield implementation in months, sometimes weeks.’
This complex system is underpinned by directly linking procurement, logistics, and targeting. Points are an economic incentive to maximise operational productivity by focusing on priority targets. The public leaderboard publicising units’ achievements, notably adds extra incentive.
The market’s invisible hand also improves equipment distribution. Unproductive units earn fewer points and therefore get less equipment. Productive units earn more points and can buy more of the equipment they think they need. Concentrating the right resources in the right hands.
Similarly, the government and industry receive real-time market intelligence on in-demand equipment to guide procurement and development. The invisible hand also improves strategic decision making: if, despite point-incentives, drone units are not scoring high-value kills, the military command will see that drones are ineffective and look for other solutions.
Points are also adaptive. The military command can adjust target values to reflect strategic objectives. For example, if Russian units are using tanks very effectively, the point value of tank kills can be increased to incentivise drone units to target them. If drone units need or prefer specific gear to achieve this, they use their points to order straight from defence manufacturers. Logistics systems then quickly bring them their order. Equipment preferences may change due to a range of factors, and direct communications between military personnel and manufacturers—including through a new secure online messaging platform—facilitates rapid adaptation.
Ukraine isn’t stopping with drones. Brave1 Market now extends across defence technologies. Participating companies have submitted more than 3,600 ‘tech solutions’ to the platform, the representative says. In classic start-up fashion, some companies even created wholly new markets by developing wholly new systems, including naval drones and equipment for close-range electronic warfare.
This new e-commerce platform, as described by Deputy Prime Minister for Innovation, Education, Science and Technology Development Mykhailo Fedorov, will be ‘like Amazon for the military’. Ukraine’s defence forces will be able to quickly access new priority technologies, including weapon systems, logistics, drones, cyber security services, demining equipment and medical equipment. Easy access to newly available technologies is an important asset of the platform, helping to bridge the typical information gap between government and industry.
Importantly, the strength of the Brave1 marketplace is the innovativeness of its industry network. These businesses completely contrast with the much larger and well-entrenched defence industry firms.
Most Brave1 companies are start-ups established since 2022, supplemented by a few larger ones who trace their origins to 2014. Modestly sized firms are naturally well suited to innovation, better specialising and integrating R&D into their business model. In contrast, long-established and larger enterprises, such as defence prime contractors, may have dedicated R&D divisions with large separate budgets, but their siloed arrangement, hierarchy and large contracts can push research efforts aside and slow down innovation.
Clusters of smaller companies also benefit from innovation-boosting network effects, including specialisation, cross-firm pollination, competition and even collaboration. In theory, this can be furthered through geographic closeness, integration with research institutions and shared digital infrastructure—hence the creation of Brave1 Market.
The Brave1 cluster now includes more than 500 companies focused on uncrewed aircraft, more than 200 on uncrewed ground vehicles and more than 280 on electronic-warfare and signals-intelligence companies.
Ukraine’s government has supported much of this growth through remarkably small investments. Under current policies, the government typically offers grants ranging from US$13,000 to US$210,000, enabling companies to design and test prototypes and prove concepts before attracting private or other capital. Instead of picking only a handful of winners, the government is diversifying investment and growing the entire sector, shaping the market instead of controlling it.
Brave1 is set for further growth. Since mid-2023, Brave1 companies have received 540 grants totalling 2.2 billion Ukrainian hryvnia (A$87 million). In 2025, Ukraine’s total budget for defence technology innovation is 2.9 billion hryvnia (A$107 million).
In contrast, Australia is planning to spend A$3.4 billion through the Department of Defence’s Advanced Strategic Capabilities Accelerator over the next decade. Its investment strategy commits significant funding to relatively few companies pursuing few and expensive capabilities.
Australia and its allies should learn from the Ukrainian model, diffuse their investments and build a more competitive, more innovative and more effective defence technology sector.