Despite Ukraine's recent battlefield successes, Russia is rebuilding its military in ways many in the West have underestimated. Rather than simply replacing losses, it is creating a defence industry combining Soviet-era capacity with 21st-century demands. The focus is on asymmetric advantages like drones, compact electronic warfare systems, and low-cost technologies fielded at scale.

Russia's hybrid state-market model merges Soviet industrial mobilisation with market flexibility. Satellite imagery shows major new construction at sites for conglomerates like Kalashnikov and Almaz-Antey. The system incorporates private firms and decentralised innovation through initiatives like the Ushkuynik technology accelerator, bridging start-ups with state acquisition.

Legacy manufacturers are investing in unmanned systems and AI-enabled targeting. Russia plans to produce 7.3mn first-person view drones in 2026 and reportedly delivered over 130,000 low-cost electronic warfare systems in 2025. Geran drones have evolved from Iranian designs to jet-powered variants using mesh networks.

The war has created a feedback loop between front lines and factories, enabling rapid testing and deployment. Russian companies are marketing combat-proven equipment internationally, securing export deals at arms exhibitions.