State Limits on Military Tech Draw Criticism
Yevhen Utkin, founder of the company 'Kvazar Micro,' has publicly criticized government restrictions on Ukraine's domestic MilTech (Military Technology) sector. Appearing on political analyst Yuriy Romanenko's broadcast, Utkin argued that such limitations hinder innovation and risk driving the country's intellectual capital abroad. This comes at a critical time when Ukraine's defense industry is under immense pressure to innovate.
Utkin highlighted a stark contrast in profitability between drone manufacturers and the traditional military-industrial complex. He stated that while drone producers can achieve margins as high as 25%, the margin for conventional defense contractors is a mere 1%.
'That's 1%. That's nonsense! You can't even pay the rent with a 1% margin. That's not profit; that's the product margin, and you still have a ton of overhead. People have been doing this for 30 years, and now the state is trying to suppress us, but we find ways to survive.' Yevhen Utkin
The Role of Innovation in Development
Utkin emphasized that innovation depends on people and their knowledge, which knows no borders. 'Innovation is about people and their brains, for which there are no borders. All these brilliant minds will very calmly move to where they are more in demand and better rewarded,' the founder of 'Kvazar Micro' noted.
'Any closed system is doomed; you cannot defeat it from within.' Glushkov
In conclusion, Utkin stressed that the key factor is people and their expertise. 'Words must have substance; there must be action. The most important thing is people, their minds. Developing these minds costs a million dollars. From that million, you can get a hundred back, or you can get zero. So far, we've been successfully working with the latter option,' he summarized.
Utkin's statements underscore the importance of supporting the domestic MilTech sector to retain intellectual capital and foster innovation. The comparison of margins between different sectors points to a need for revising state policies to support high-potential technologies like drones, which can far outpace traditional military tech in profitability. Utkin's call to action aims to keep talent within Ukraine, a move with significant implications for the country's future innovative development and its strategic defense capabilities.
As the military tech sector faces increasing challenges, the landscape of investment is also shifting. Recent observations indicate a trend where major investors are reallocating their funds from technology to biotechnology sectors. This shift is driven by the promise of higher returns and innovation potential in biotech, which may parallel the struggles faced by Ukraine's MilTech industry. For a deeper understanding of this investment trend and its implications, read more about why capital is moving from tech to biotech.