OCTOBER 2024

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HIGHLIGHTS

• The assassination of Yahya Sinwar dealt a significant blow to Hamas leadership and
  underscored Israel’s operational reach, as well as the importance of drones.
• The use of drones has dramatically increased in Israel’s dual theaters of conflict against
  Hamas and Hezbollah.
• While Israel advances its drone technology, Hamas and Hezbollah are becoming more adept at re-imagining asymmetric warfare tactics for their drone arsenals.
• While Ukraine’s national air defense network has held Russia’s strategic missile and drone
  strike campaign at bay, the presence of a new Russian stealth drone in Ukraine’s skies
  could pose a difficult challenge.
• Russia has a long-term plan to build up its defense drone industry.
• Balloons have become critical pieces of equipment for Ukrainian forces in Starlink-
  deprived parts of the battlefield.
• On Oct. 14, China's Joint Sword military exercise 2024B sent a powerful signal to Taiwan
  and its supporters that China is resolute in its claims over the island.
• Spurred by rising tensions with China, Taiwan has accelerated its military drone
  development and procurement efforts in recent years.
• Faced with China’s drone warfare dominance, Taiwan is leveraging its commercial sector
  to develop a variety of new drones for defense applications.

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EDITOR's NOTE

Over the past two weeks, we’ve seen how trends in drone warfare emergent on Ukraine’s
battlefields are not quarantined to that war — they are, in fact, influencing military conflicts and
maneuvers from the Middle East to the Pacific. Drones are not a tool to be pigeon-holed into one particular conflict. Nor are they limited in their utility to actors who are unable to achieve air superiority or artillery dominance. As this edition of the Vector Report will describe, the use of small drones is baked into China’s plans for the potential invasion of Taiwan. For its part, Taiwan has embraced the value of drones, too, and is leveraging the power of civil-military collaboration to drive the development of new technologies — reflecting an elemental aspect of Ukraine’s drone warfare program.

According to the Vector Report’s Taiwan-based team member, “Taiwan has significantly accelerated its military drone development and procurement efforts in recent years, aiming to bolster its defense capabilities amid rising tensions with China.” To that end, Taiwan is developing a wide range of new unmanned platforms, spanning the gamut from FPV strike drones to maritime surveillance drones.

Israel is also accelerating the development of its drone warfare doctrine and technology. Our Israeli
team member writes, “Israel’s continued focus on decapitating Hamas’s leadership reflects the
broader shift toward using drones and intelligence for targeted, high-impact operations in modern
warfare.” Hamas and Hezbollah are also increasing their drone employment, including strikes against Israeli military installations — even against a home of Prime Minister Benjamin Netanyahu. Iran, true to
form, maintains its multifaceted aggression against Israel with the export of advanced drone
technology to Hamas and Hezbollah.

Considering the threats they face, both Israel and Taiwan are actively pursuing new counter-drone
technologies. This edition of the Vector Report illuminates some of those efforts. Not to be overlooked is Russia’s crash program to develop a drone manufacturing base. The Vector Report’s team member in Ukraine reports that “Russia has reportedly allocated $10 billion over six years to build and fund UAV research and development facilities.” Russia’s burgeoning drone industry faces systemic headwinds, not the least of which is rampant corruption. Yet, the attention and funds allocated to drone development by the Kremlin signals Moscow’s understanding that drones are and will remain a key plank of modern warfare.

The implications of all this are clear: America’s friends and foes clearly understand the combat
utility of the sorts of small- and medium-sized drones that have so revolutionarily reshaped combat
between Russia and Ukraine. Drones are not a passing trend or a peculiarity of this war. They’ve
proven their intrinsic worth and have spurred the emergence of new military industries in both
countries.

In a recent joint study, the Kyiv School of Economics and Brave 1, a Ukrainian defense investment
platform, reported that Ukrainian defense startups are on track to receive some $50 million in
investment this year, up from just $5 million in 2023. Within that number, the average investment
round increased from around $500,000 to between $1 to 3 million, signaling investors’ growing
confidence in the firms they back. Up until now, the war’s immediate, battlefield needs have prioritized scale over technological sophistication. Reflecting this, Ukraine’s domestic drone production increased from 3,000 units in 2022 to an estimated 4 million in 2024, according to the same Kyiv School of Economics and Brave 1 study.

The inherent value of drones is that they are inexpensive and attritable and can be employed at
scale. Those attributes have amplified the value of drones for both Ukrainian and Russian forces.
Even so, both sides are also chasing technological leaps that might give them a tide-turning edge.
To that end, a generation of patriotic, technically savvy Ukrainian developers (Ukraine has an
exceptionally strong bench of IT autodidacts) have been hard at work over the span of the full-scale
war developing solutions to a broad gamut of drone combat problems — along the way, often
outpacing the efforts of America’s top defense contractors. What these Ukrainian developers have
done while cloistered in clandestine workshops for fear of Russian missile strikes and while operating on budgets that represent a rounding error for most American defense firms should give
our leaders pause when they consider our path forward to meet this new era of warfare.

Within the gold rush of American firms racing to develop small combat drones, there’s still an
unshakeable addiction to over-engineered, unnecessarily expensive systems that take so long to
design and test that they’re obsolete before they ever reach a warfighter’s hands. It bears repeating
that the foundational value of drones is that they are inexpensive, attritable, and scalable.

Most Ukrainian drone manufactures say that drone technology has a shelf-life measured in weeks,
months at best. It’s a constant duel between sword and shield as both sides rush to develop new
anti-drone countermeasures, and then drones to defeat those countermeasures, and so on.

New design ideas typically come from front-line troops’ feedback — not from teams of engineers
ensconced in an office building safely distant from any war zone. Ukrainians build drones based on
soldiers’ requests, not brainstorming sessions. They match the warfighters’ immediate needs and
kick designs out the door when they’re good enough to go. The operative mindset is that it’s better
to get a “good-enough” weapon in a warrior’s hands today, rather than leave him empty-handed
while waiting for a perfect design. (Anyway, that “perfect” design is probably already obsolete if it
took more than a handful of months to develop.)

Front-line feedback subsequently drives iterative updates for future designs. Reflecting this
adaptive loop, Ukrainians design their drones at the outset to be modular and easily updatable —
both in the lab and in the field. As these pages have previously written, Ukrainian drone designs are
like a ball of clay capable of being constantly remolded, not a final product chiseled from stone.
Ukrainians are also not sidetracked by non-essential add-ons. They stay true to that core precept
that drones must be inexpensive, attritable, and able to be produced and employed at scale.
For now, the drone warfare center of gravity remains in Ukraine. And there’s no doubt that
America’s adversaries are gleaning as much battlefield feedback as they can from Russia’s wartime
experience. Yet, any close watcher of the war in Ukraine can see signs that a negotiated settlement
of some sort is becoming less of an abstract possibility. That’s not to say that the war won’t drag on
interminably for years to come. That’s certainly possible, too. But President Volodymyr Zelenskyy has sent up some trial balloons recently, signaling that Ukraine is ready to ratchet down the war’s
intensity, step by step.

Making predictions about a war’s outcome is a tricky business. Yet, the overall message here isn’t
to forecast the war’s end date, it is to highlight the fact that the war is not an eternal status quo. And
when it ends, it could end swiftly. Thus, America and its partners and allies should be poised to
support Ukraine’s rapid military and economic reconstitution as a measure of deterrence against
another round of Russian aggression. We’d also be wise to fully support and partner with Ukraine’s
remarkable, vast network of up-and-coming defense start-ups and innovators. They have years of
invaluable experience and a deep bench of talent. But they need investors to sustain their
businesses, as well as their research and development.

For the epigraph to his famous novel about the Spanish Civil War, For Whom the Bell Tolls, Ernest
Hemingway chose a poem by John Donne, which began, “No man is an island...” Well, these days,
no war is an island, either. The news that North Korean troops have deployed to join Russia’s war
against Ukraine is the latest sign that conflicts around the world are interweaving, and that the
interests of America’s adversaries are aligning. This edition’s report from Taiwan is particularly
troubling, underscoring the urgency of China’s threat to that island nation. With our newest team
member now sending us dispatches from Taiwan, in addition to the stellar work our experts
continue to do in Ukraine and Israel, our mission is to be your eyes and ears in the heart of today’s
gathering, global storm.

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