Russia’s struggle to modernize its military industry
Think tank: Chatham House
Author(s): Mathieu Boulègue
July 21, 2025
This report from UK think tank Chatham House examines how sanctions, war and ‘innovation stagnation’ are weakening Moscow’s capabilities.
The weight of international sanctions and the demands of war have exposed and intensified existing shortcomings in Russia’s military-industrial base. Russia is currently struggling to build genuinely new and technologically advanced systems. Instead, it is relying on Soviet-era legacy systems and research. It is also heavily dependent on third-party suppliers to replace essential Western-made components – with import substitutions and domestic production failing to meet requirements.
Despite Russia’s record levels of military spending, our research shows that the current state of its military industry is one of regression, contrary to what the Kremlin would have the world believe. Production will likely have to be simplified and slowed over the coming years, while Russia will be forced to accept reduced quality of outputs and will suffer from ‘innovation stagnation’ in its technological research and development.
These problems are not insurmountable. Russia will continue to muddle through and keep producing systems that are ‘good enough’ to pose a sustained threat to Ukraine. But being ‘good enough’ to prolong a war against Ukraine is not the same as being able to keep up with Western (and Chinese) advances in military technology over the longer term.
The West’s ultimate goal must be to encourage the degradation of Russia’s military industry, reducing the overall threat from Russia by creating the conditions for further decline.
