Industrial Roadblocks: Producing at Scale and Adopting New Technologies

Commentary by Cynthia R. Cook

Published September 16, 2025

This commentary is part of a report from the CSIS Defense and Security Department entitled War and the Modern Battlefield: Insights from Ukraine and the Middle East.

Russia's full-scale invasion of Ukraine in February 2022 was the starting point for a long-overdue refocus on defense industrial base issues. The United States led the allied effort to supply Ukraine with systems and weapons that it could use for self-defense against Russian aggression. Within the first year of the war, this support illuminated worrisome vulnerabilities in the U.S. and European defense industrial bases, especially in terms of preparedness for sustained conflict generally and in munitions production specifically.1 Russia similarly began the fight without understanding the likely strains on its industrial base and the need to ensure adequate stockpiles and production capacity. Along with limitations on defense production, the war has revealed constraints throughout the supply chain and in the production workforce. It has also demonstrated the benefits of working with allies and partners, which has sustained both Ukraine and Russia during the long conflict. The risks of potential adversaries controlling key supply chain inputs, including China's dominance of critical minerals processing, have become clearer. And the speed with which both sides have incorporated innovation in what they bring to the fight suggests that the industrial base, along with the government bureaucracies that set and fund requirements, must be agile enough to ensure that equipment delivered to the battlefield incorporates updated technology that refreshes at the rate of weeks or days, not years.

A rethink of industrial posture is necessary-not just to ensure peacetime readiness but to be able to sustain and surge to support combat operations against a near-peer adversary in the case of protracted war.

A clear lesson has emerged: Defense industrial readiness needs to be in sync with the possibility of high-intensity, prolonged conflict in which there is rapid technical refresh.² The industrial base needs to be robust, resilient, and ready to surge, especially given the risk of lengthy conflicts. There is a renewed understanding that "production is deterrence."³ Thus, investments in production and in surge capability and capacity throughout the supply chain, especially for munitions, will be necessary to support future war. The challenge of surging production means that nations must be willing to produce for stockpiles in times of peace to have the capabilities they need ready in case of conflict. Equally important is working with allies and partners to build a more integrated and resilient industrial base through coproduction, shared stockpiles, and coordinated supply chains. A rethink of industrial posture is necessary-not just to ensure peacetime readiness but to be able to sustain and surge to support combat operations against a near-peer adversary in the case of protracted war. This posture needs to include considerations of the possibility of economic warfare, whereby potential adversaries control the production of and withhold inputs to necessary-to-manufacturing defense components.

Future war will require the industrial base to be responsive to the unprecedented, persistent innovation loop of technology on the battlefield. Russia's war in Ukraine has showcased a level of technological integration whereby lessons from the front lines are shaping what is produced within days or weeks. The war has demonstrated the efficacy of dual-use technologies, such as drones that are widely available on the commercial market and simple enough to build in small factories; an increased use of electronic warfare, requiring the continual evolution of system technologies; and an increased availability of intelligence, surveillance, and reconnaissance (ISR) technologies (both drone- and space-based), removing the element of surprise. All of these factors will require updating acquisition approaches for any nation working to maintain its warfighting effectiveness. Slow and deliberate processes that prioritize cost efficiency will not deliver capabilities at the pace of warfighting necessity.

Lessons from Current Wars

The Importance of Production

Russia's war in Ukraine has resulted in staggering levels of materiel consumption. Both sides have burned through artillery shells, precision-guided munitions, drones, and other equipment at rates that dwarf peacetime forecasts. Similarly, Israel's operations in Gaza since late 2023 in response to Hamas's October 7, 2023, attack have demonstrated the pace at which a modern military can expend munitions, even in a small geographic area, and risk depleting national munitions stocks.⁴

The challenge of ensuring adequate stockpiles is also a significant finding from wargames, including those examining a potential conflict over Taiwan. In these simulations, forces often run out of critical munitions-particularly long-range precision weapons-within days.⁵ For the United States, demand in these scenarios often exceeds current industrial capacity, suggesting the need for a significant reimagining of stockpiles and surge capabilities. Analysis shows that rebuilding U.S. inventories for some systems provided to Ukraine will take years.⁶ European industry has worked to build capacity, but it still faces supply constraints.⁷ Russia has invested in growing its industrial base to meet the demands of its war but has still benefited from imports of dual-use components.⁸

Surging manufacturing is not merely a matter of sending orders to prime contractors, or of increasing orders at government owned factories. Entire defense supply chains need to be ready to expand production.⁹ Supply chain complexity muddles this effort, since prime contractors may not even know who supplies components at the lowest level of supply chains, with the additional risk that adversaries may control production of necessary inputs, such as critical minerals.¹⁰ The defense industrial bases of most major powers are not incentivized for resilience during peacetime and will face challenges surging during wartime, especially during initial phases. Market-based defense industries prioritize efficiency and profit, rather than excess capacity, which increases costs. Nations with centralized planning-like China and North Korea-are the most able to direct sustained defense production in peacetime.

China's industrial policy has supported its development into the world's manufacturing powerhouse, with as much as 50 percent of its manufacturing potentially dual-use.¹¹ It has invested heavily in its defense industrial base, including in munitions and shipbuilding, with some analysts assessing that the nation's defense industrial base is on a "wartime footing."¹²

China also dominates in a number of necessary sub-tier parts of the supply chain, including critical minerals processing, which raises the question of supply chain security. Industrial readiness requires attention to a production ecosystem that includes both systems integrators and suppliers. Component, subcomponent, and material suppliers face the same challenges of expanding manufacturing as prime contractors, including workforce and facility constraints. Complex supply chains may have 10 levels or more, so it may be difficult to assess risks, including risks posed by single-source suppliers or dependencies on unreliable international sources.¹³ Investments in readiness must apply to the entire supply chain, and a consistent focus on supply chain illumination to identify and remediate sources of risk needs to be part of an industrial base strategy.

The Need to Overcome Inertia and Invest Consistently

The importance of the defense industrial base is not a new concept, but many nations have underinvested in capability and capacity. Even before the end of the Cold War, one analyst offered that "the US defense industry in 1988 bears little resemblance to the 'Arsenal of Democracy' that turned out tanks and airplanes in legendary numbers during World War II. American industry today cannot meet surge or wartime mobilization needs. It even has difficulty with peacetime defense requirements."¹⁴ The reasons stated then remain familiar today-increased outsourcing, workforce challenges, and smaller defense budgets.

More recently, the 2010 Quadrennial Defense Review included a call to revitalize the defense industrial base.¹⁵ During the first Trump administration, Executive Order 13806 called for an assessment on how to strengthen the defense industrial base, which was published in 2018.¹⁶ Even before Russia's invasion of Ukraine, the Biden administration published a report on the security of defense-critical supply chains, highlighting limitations in kinetic capabilities, among other inputs.¹⁷ Repeated warnings about defense industrial base challenges have yielded some action, including the development of the first ever National Defense Industrial Strategy in 2023.¹⁸

Most of the rest of the world has similarly underinvested in production capacity over time. One analysis found that "the uncomfortable truth emerging from the ongoing war on European soil is that European countries have barely prepared for war at all. Russia's war of aggression against Ukraine has revealed significant shortcomings in the capacity of European NATO governments to supply and arm a neighbouring partner, much less fight a major war themselves."¹⁹ Many European nations focused on social spending instead of investing in their national defenses at the NATO target of 2 percent developed in 2014, and only after Russia began its attack on Ukraine did the number of nations at that target increase from 6 in 2021 to 23 in 2024.²⁰ The European Union issued a defense industrial strategy in March 2024, with the goal of enhancing defense industrial capacity by 2024, hoping to address challenges of "fragmentation and limited collaboration, exacerbated by EU Member States' dependency on non-EU defence equipment."²¹

The Australian government's relatively small requirement has meant that maintaining consistent production over time has been difficult.²² It released a Defence Industry Development Strategy in 2024 to address long-standing production challenges.²³ Until recently, Japan banned defense exports, which limited industry to Japan's small defense market and made the country less well-postured to surge.²⁴ In contrast, South Korea's defense industry grown over time, with investments spurred by the proximity of nuclear-armed North Korea and enhanced by strong government partnerships with industry.²⁵ South Korea's strong industrial base has postured the country to win contracts with new customers, such as Poland.²⁶

One nation has followed a dramatically different approach. Over the last decade, China has visibly expanded its defense industrial base and made investments in capabilities, such as shipbuilding, that have dual-use potential.²⁷ Chinese production of key platforms and munitions now far outpaces that of the United States, reinforcing that planning for a short war is a gamble unless the U.S. industrial base is transformed.²⁸

Not all the industrial base lessons from Russia's war in Ukraine are stories of persistent challenges and unaddressed gaps. One takeaway is that conflict generates the urgency for putting an industrial base on a wartime footing. Russia has pivoted its economy toward the production of weapons, and while its industrial base has been assessed as a continuing weakness, one recent analysis suggests that Russia's economy has been resilient.²⁹ Ukraine has vastly expanded its network of factories, drawing on the labor of women of all ages, along with some men who are able to work in defense factories rather than serving on the front lines.

Allies and Partners as Force Multipliers

Even beyond offering second sources of supply and the potential for surge capacity, current conflicts have highlighted the importance of allies and partners. In Russia's war in Ukraine, both sides have relied on material and technical know-how provided by other nations. Materiel provided by allies and partners sustained Ukraine in the early part of the war even more than its own industrial base, which had been underinvested in before the invasion.³⁰ A Ukrainian economic nongovernmental organization reported that $118 billion of aid has come from abroad, with the United States and EU nations being the most important sources.³¹ The United States and NATO allies have a wide range of offensive and defensive systems, including ammunition, artillery, bombs and rockets, air defense systems, ground vehicles, drones and aircraft (including F-16s), and a range of other systems.³²

Russia has also benefited from being able to access the industrial bases of other nations, following a more transactional approach. China, Iran, and North Korea have made components, capabilities, and other forms of support available to Russia, which has strengthened its supply chain and its ability to sustain its war against Ukraine. A statement from U.S. Indo-Pacific Command in the spring of 2025 suggests that China has provided 70 percent of the machine tools and 90 percent of the legacy chips that Russia needed to reset its industrial base and ramp up production.³³ Iran initially supplied Russia with drones and then later provided Russia the technical and production knowledge necessary to expand its indigenous production of military drones.³⁴ Iran has also supplied Russia with short-range ballistic missiles.³⁵ North Korea has provided millions of rounds of ammunition, at least 100 ballistic missiles, and "elements of three brigade sets of heavy artillery, including DPRK-origin 170mm long range self-propelled artillery pieces, 240mm long-range multiple rocket launchers, more than 200 total vehicles, self-propelled guns, multiple rocket launchers, and reload vehicles for both types of weapons," according to an multilateral monitoring body.³⁶ In return for this support, Russia has provided its more advanced military technologies to its partners.³⁷ Along with insight into how their equipment performed on the battlefield, China may get advanced equipment and technology, including relating to aerospace; Iran is getting a range of equipment, including helicopters, radars, and fighter aircraft; and North Korea is accessing information on missiles and satellite technology.³⁸

The Role of Innovation

Russia's war in Ukraine has showcased a level of technological integration that marks a step change in modern warfare, with implications for the industrial base. Ukraine has pioneered a variety of innovations in what has been termed "the first full-scale drone war."³⁹ Even early in the war it was clear that "Ukraine's widespread and successful use of newer systems [was] placing emerging tech into the military mainstream."⁴⁰ Ensuring that warfighters have capabilities that are keeping pace with the evolution of adversary systems requires an approach to acquisition that is fast, flexible, technically informed, and able to work with a range of defense contractors-from traditional primes focused on systems integration to cutting-edge innovation providers. Ukraine's distributed model of technology development has allowed for the emergence of new ideas from the private sector, with battlefield demands driving innovation, but has also made these innovations harder to scale.⁴¹ Russia has responded with investments in its own innovation ecosystem, with recent analysis suggesting that a more centralized planning and production approach has enabled it to outpace Ukraine in its ability to develop, scale production of, and field new systems.42 The ability to nimbly incorporate technology evolution is important, but it does not outweigh the ability to produce systems in the quantities needed for industrial war.

The ability to nimbly incorporate technology evolution is important, but it does not outweigh the ability to produce systems in the quantities needed for industrial war.

Drones offer a useful case study on the role innovation has played. Ukrainian forces have used drones for ISR and strike, with some analysis suggesting that over the first three years of the war, drone attacks were responsible for 70 percent of Russian casualties and 90 percent of equipment losses.⁴³ These strikes were enabled by other capabilities, as Ukraine has taken commercially available drones and coupled them with electronic warfare and ISR systems. Over the course of the war, Ukraine has expanded its factory network, and the production of drones has risen dramatically, reducing the nation's import dependencies on commercially available drones.⁴⁴ This has reduced Ukraine's supply risk, given that China leads the world in commercial drone production and has also supported Russia in the war. Production in Ukraine has been decentralized, which has allowed for an increase in facilities and reduced risk from Russian precision attacks on defense factories.⁴⁵ Military units have maintained and repaired these systems on the front lines.⁴⁶ This also brings an advantage because systems need to be updated rapidly to address changes in adversary capabilities, including in electronic warfare.

The war has also cast some doubt on the utility-or at least the survivability-of expensive and exquisite weapons systems.⁴⁷ The sinking of Russia's Moskva cruiser by Ukrainian missiles early in the war offers a notable example of a strategy of cost imposition.⁴⁸ This aligns with other analysis, including from wargames, which suggests that technological evolution puts a wider variety of systems at risk.⁴⁹ The challenge going forward will be using these lessons to reshape larger acquisition programs, which have constituencies with other objectives including maintaining industrial production at current facilities and ensuring local employment levels. While these may be worthy goals, there needs to be balance to ensure that resources are available to invest in new types of systems with greater battlefield effectiveness.

Conclusion

Russia's war in Ukraine has lasted three-and-a-half years as of this writing. It has become a grinding conflict featuring the heavy expenditure of munitions and the adoption of new technology, including the increased use of drones. The defense industrial bases of both nations have been dramatically reshaped, moving to a wartime footing and incorporating more rapid innovation. Both nations have also relied on partners and allies for the provision of munitions and other capabilities as well as for supply chain inputs. Neither nation's industrial base was prepared for protracted war, and support for Ukraine has strained allied production.

In the Israel-Hamas conflict, Israel has much more robust military capabilities and has dominated the battlefield, but it has relied on its ally the United States for munitions, missiles, and other systems being used in the protracted fight.

These conflicts, along with recent wargames, have highlighted concerns about the availability of capabilities necessary to stay in the fight in the case of protracted war. Even in times of peace, nations must focus on the industrial base to ensure they have the capabilities and capacity when needed in the case of a long conflict. This includes paying attention to risks in the entire supply chain, including by continually investing in supply chain visibility to look for constraints and for chokeholds potential adversaries may have on the production of necessary inputs. A robust defense industrial base is expensive and must be defended even in times of peace in order to be ready in times of war. Working with allies and partners is a strategy that strengthens ties and offers expanded production capacity while spreading the investment burden.

These lessons are not new, and the risks of an inadequate defense industrial base have been highlighted over the decades. In democratic nations with market economies, addressing industrial base challenges will require considerable senior leadership support, funding, and efforts to identify and eliminate policies that limit flexibility. Nations with centralized planning-or ones that face ongoing threats, such as South Korea-are better able to support industrial base investment.

Recent conflict, especially Russia's war in Ukraine, has featured an increasingly rapid refresh of technology on the battlefield. More flexible acquisition approaches that partner operators with acquisition professionals will enable better access to innovation.⁵⁰ Open-systems approaches that allow for the rapid refresh of subcomponents can offer advantages over large, "exquisite" systems that are more difficult to update.⁵¹ Rigid approaches where funders apply resources to specific programs limit the ability to move funds to new innovations as the need arises. During wartime, many of the more formalized acquisition regulations often are traded for the flexibility of "urgent operational needs," but allowing and practicing this flexibility in advance could create a more innovative defense sector, and one that is more rapidly adaptable in case of conflict.

As dramatically different as they are, Russia's war in Ukraine and the Israel-Hamas conflict both show the likelihood of conflicts becoming protracted. Nations that are concerned about being pulled into combat must focus on strategies to ensure they have the weapons they need to compete on the battlefield. Munitions are a particularly important investment, yet one that has been harder to justify when nations are not drawing on stockpiles in their own defense or to support partners. Peacetime approaches to defense industrial production that prioritize managing cost over ensuring capability will be insufficient to meet the needs of modern war. Planning and resourcing for conflict with the expectation that it will be over quickly creates the risk that nations will not have the capabilities they need to win, or even to stay in the fight over the long term. The nations with the stronger industrial bases, with the more robust supply chains, and with the closer defense industrial ties with allies and partners will prevail, and those that do not deliberately focus on these capabilities during peacetime will fail during war.

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Cynthia Cook is director of the Defense-Industrial Initiatives Group and senior fellow with the Defense and Security Department at the Center for Strategic and International Studies (CSIS) in Washington, D.C.

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