Cutting Procurement Costs by Twenty Percent, Turning Every Life into Data: Four Key Lessons Ukraine’s Defense Reform Holds for Taiwan

Editor’s note — Four years into Russia’s war on Ukraine, Taiwan—facing its own threat of invasion from China—has followed that war closely, hoping to discern from it how a smaller power can find openings to fight, and even prevail, against a far stronger adversary. The reflection that follows reads Ukraine’s defense reforms for what they might teach Taiwan. Written for a Taiwanese audience, its “we” means Taiwan. For readers abroad, the candor of this self-criticism is itself revealing: it shows a society that has, in fact, never stopped asking how to strengthen its own defense—and this unflinching self-examination is the clearest proof that Taiwan takes its own security to heart and is willing to confront it honestly.

I recently came across an article by Fox Hsiao（蕭上農）, a prominent figure in Taiwan’s internet industry, titled “How He Turned War into a Data Business” (anduril.tw/fedorov). It is an interview with Mykhailo Fedorov—who became Ukraine’s defense minister this January—about the reforms he has set in motion. Reading it, I was struck that so small a country could find a defense minister this willing to innovate and break with convention; and I felt that Taiwan’s own president, Lai Ching-te, and defense minister, Wellington Koo, would do well to study how others have managed it.

Taiwan and Ukraine are, of course, very different, and the problems and challenges they face diverge in obvious ways. Still, seeing what others have achieved, one cannot help but wonder: could the many reforms accomplished inside Ukraine’s defense ministry work in Taiwan? What can Taiwan learn from them?

This is all the more worth asking because last week, on 18 June, Taiwan’s Control Yuan—the branch of government responsible for oversight and audit—released an investigative report on the defense-industry supply chain. The many problems it identifies, set against Ukraine’s approach, can offer us some fresh lessons.

First, though, it is worth looking at how Taiwan and Ukraine differ.

“Reform or Die”: How Life-and-Death Pressure Makes the Impossible Possible

Take the budget. Fedorov says the more than 60 billion hryvnia (the Ukrainian currency; ≈US$1.4 billion) his reforms required, he did not wait on foreign aid to cover—he squeezed all of it out of the defense ministry’s own spending. He treated every meeting with Western allies as homework to hand in: announce a plan first, then make the battlefield results match the plan, building trust through consistency. His logic: you need leverage at the negotiating table, but leverage is not begged for—it is won by performance on the battlefield.

As for Taiwan’s defense budget, the situation is familiar to most Taiwanese. The NT$1.25 trillion (≈US$39 billion) special defense budget was blocked ten times between its submission to the legislature and its referral to committee, and held up for more than four months—so much so that the U.S. Letter of Offer and Acceptance (the formal arms-sale document) was about to lapse and had to be granted an exceptional extension. What the Legislative Yuan ultimately passed was the NT$780 billion (≈US$24 billion) version backed by the opposition “Blue-White” bloc—the Kuomintang (KMT) and the Taiwan People’s Party (TPP), which together hold a legislative majority. Items such as the AI-assisted intelligence and decision-making module, vertical-takeoff drones, and domestically commissioned anti-ballistic missiles and drones were all left out.

This, I think, is the most fundamental gap between Taiwan and Ukraine. Fedorov can push budget reform in Ukraine because of a precondition Taiwan currently lacks: he is reforming under fire, and the people know that if they do not reform, they will die. That life-and-death pressure turns many “politically impossible” things into possibilities.

Taiwan today faces a harder predicament. The threat is real, yet it has not reached the point where everyone feels “reform or die.” And Taiwan’s political identities—the “Blue-White” camp versus the “Green” camp (the governing Democratic Progressive Party, DPP)—are utterly split, so the budget can be made into a political bargaining chip, procurement abuses can be left lying untouched, and digitalization can stall at the level of slogans.

One line from Fedorov is worth Taiwan revisiting again and again: “To beat an opponent who far outmatches you in resources, money, and population, meeting force with force gives you no chance. Your only option is asymmetric tactics—getting ahead in every cycle of innovation.”

In fact, Taiwan’s position relative to China is structurally very similar to Ukraine’s relative to Russia. Ukraine was forced to learn this system under fire. Taiwan had best not wait until that moment to discover just how well Ukraine did—Fedorov’s interview is not only highly valuable to Taiwan right now; you might even call it a “chronicle of a death foretold” (an allusion to Gabriel García Márquez’s novel), one that shows how to learn in order to avoid that very fate.

Fedorov has said that what he truly wants to optimize is “how many of our people are dying,” and his method is to make every human life a data point—an input value taken seriously. Taiwan’s problem, at present, is that its entire political system has yet to reach a consensus, and does not even regard that approach as necessary.

Four Solutions Ukraine Found for Driving Reform

The problems Fedorov’s various reforms at Ukraine’s defense ministry set out to solve—budget black holes, procurement abuses, bureaucratic culture, manpower gaps, mobilization leakage—all seem visible in Taiwan too. The problems are much alike, but Ukraine found innovative ways through them. They can be organized, I think, into four directions, for a Taiwan still groping and uncertain to consider.

First, on procurement reform, Fedorov’s approach moves from “tailor-made specifications” to “open tenders that squeeze out the money for reform,” making the tender process a core anti-corruption tool.

He gave two concrete cases. In the first, an artillery-shell tender came in 16% cheaper, cutting US$1,000 from each shell—multiplied across several hundred thousand shells, that is over US$100 million. The second involved ATV (all-terrain vehicle) procurement, where someone had locked the technical specifications so rigidly—mandating a dedicated mounting position for electronic-warfare equipment—that the cost per vehicle jumped from US$10,000 to US$17,000. His logic is clear: the money for reform does not wait on foreign aid; it is squeezed out of procurement. He estimates that correct tender procedures alone can cut procurement costs by about 20%.

Procurement reform is certainly worth pursuing in Taiwan too. According to the Control Yuan report released this June, much of Taiwan’s domestic military procurement is not obtained through proper mechanisms, allowing firms that bid lowest, lack collaborative experience, or invest very little in R&D to win easily. Firms report that the current “case-by-case review” typically takes more than a year—severely hampering both procurement efficiency and the dovetailing of technology with development.

Judging by these realities, then, Taiwan’s problems look much like Ukraine’s: lowest-bid awards that let inferior firms win, tailor-made specifications that let particular firms monopolize, and a process that is far slower—where merely starting a review takes over a year. The ATV racket Fedorov describes is hardly unfamiliar in Taiwan’s procurement circles; it is just that no minister has ever personally turned over that stone.

Second, on digitalization and data-driven operations, Fedorov moved from “slogans” to “a daily, individually named casualty list.” He says that in the Russia-Ukraine war he receives a casualty list every day, naming each person one by one—recording whether they were hit entering or leaving a position, and whether they died to an FPV drone (First Person View, also called a racing drone) or to shelling. The president, the commander-in-chief, and he all hold the same tablet, and the flight path of every Shahed drone comes in in real time.

He says this system makes false reporting almost impossible. In the past, a Shahed once struck a thermal power plant but was reported to the president as “a miss, intercepted”; that can no longer happen. The Delta system he developed in-house is benchmarked against Palantir and, paired with the "A1" Defense AI Center, underpins a combat-effectiveness scoring system that ranks each brigade's performance and ties the reduction of casualties directly to bonuses.

The scoring formula is complex. The basic rule: losing one of your own in exchange for ten of the enemy’s counts as a coefficient of one; the ideal target is a twenty-to-one exchange, for an even higher coefficient. Fedorov tossed out a pair of comparative figures: this May, Ukrainian forces eliminated 252 Russian troops per square kilometer, whereas last October the figure was 67.

Managing entirely by death counts sounds quite jarring, but it must also be highly effective. As for Taiwan, the same Control Yuan report states clearly that although the Ministry of National Defense has grasped elements of “software-defined warfare,” its transformation still falls short in organizational capability, equipment- and systems-acquisition channels, tactical validation, and combat-training practice—and that it must actively overcome the challenges of “system automation” and “operational automation.”

So “software-defined warfare” in Taiwan still sits at the conceptual level, lacking a data platform like Delta that is cross-departmental, integrated in real time, and able to directly inform decisions. The more fundamental problem is culture: Fedorov can let every brigade commander see his own ranking, but whether Taiwan’s military would accept that kind of transparent performance pressure is a question mark. Taiwan’s density of IT talent is more than enough to build such a system; what is lacking is not technology but political will.

Third, on talent and culture: in Ukraine, “tech bros” can enter the defense ministry. Taiwan, this tech island, also has plenty of tech guys—do they have any chance of getting in?

Ukraine’s approach: Fedorov brought in a cohort the outside world calls “tech bros,” running head-on into the old generals in uniform. The article notes that in his first week he summoned the heads of all law-enforcement agencies to gather reports, and proposed polygraphing people on a list—those who refused the polygraph were fired on the spot.

He also held an all-hands Zoom meeting, announcing the new vision for the war to everyone online, and put it bluntly: anyone who wants to reach into corrupt dealings, build channels for kickbacks, or guard private interests—he would personally make sure they end up in prison and stay there.

Most countries’ defense ministries, I believe, are highly closed hierarchies where promotion runs on seniority and obedience, and civilian tech talent almost never enters the military system. A minister is a political appointee, but under bureaucratic pressure it is usually the system that absorbs the minister, not the minister who remakes the system.

Fedorov’s playbook—“a CEO parachuted in, an all-hands declaration, a purge by polygraph”—has almost no precedent in Taiwan’s political culture or military system, and it is hard to imagine any minister with the political backing to attempt it. But precisely for that reason, Ukraine’s extraordinary measures in extraordinary times are all the more worth Taiwan’s study.

The fourth is making war “data-driven.” Fedorov says that of those mobilized, fewer than half actually reach the front. They launched a “Mobilized Check-In” system to track every stage and found a great many anomalies—people who had received a draft notice but joined no unit, and were not flagged as wanted in the system either. “The data was never digitized, and so people simply vanished into the cracks.”

At the same time, he redesigned the incentives for service: a contract system, with infantry paid about US$6,700 a month (assault troops up to a little over US$10,000), and two-year contracts paired with deferment from further conscription after service—giving people a reason to serve rather than merely being forced to.

The problem of people evading service is surely familiar to every Taiwanese too—many dodge it by exploiting various legal loopholes, or even through misconduct such as forged documents. Data-driven methods are, of course, one way to tackle this; doing digitalization well is bound to be far better than not doing it.

A “Just Don’t Let Anything Go Wrong” Mindset: The Challenges Taiwan’s Reform Faces

Separately, although Taiwan’s reserve-mobilization system has been reformed in recent years, with training days extended, the digital tracking of the mobilization funnel—how many people are at each stage, and where they are lost—remains opaque.

More fundamental is the question of incentives. Taiwan’s service pay, rotation system, and substantive post-discharge protections still fall well short of the incentive structure Fedorov designed—the kind that “lets people plan their own lives.”

At this point, close your eyes and think for a moment. If Taiwan were to emulate Ukraine’s defense ministry, it would surely meet many challenges. Many Taiwanese have served in the military (Taiwan maintains conscription) and remember what the units were like back then; many friends of the same age now have children at the conscription stage, and from them one hears how the military stands today—discipline may have improved somewhat, but it is plainly more laissez-faire and easygoing than before, pursuing little more than keeping out of trouble.

Yet when the very form of war worldwide has utterly changed, the threat Taiwan now faces is almost a replica of Ukraine’s—the only difference being that war has not yet broken out. From the start of the Russia-Ukraine war more than four years ago until today, many of Ukraine’s practices are well worth Taiwan’s serious thought. One can only hope Taiwan, too, will carry out reforms to match. Surely that is the shared wish of all Taiwanese.