The Danish Model and Ukraine’s Wartime Defence Industry

This paper presents an in-depth analysis of the ‘Danish model,’ a novel funding mechanism through which Denmark and partner governments procure Ukrainian-made defence equipment directly from Ukrainian manufacturers for use by the Armed Forces of Ukraine. It argues that this model serves as a powerful catalyst for developing dynamic capabilities within Ukraine’s defence industrial base, operating under the extreme pressures of war, resource scarcity, and high operational uncertainty. Drawing upon the theoretical frameworks of dynamic capabilities—specifically the sensing, seizing, and transforming trilogy (Teece, 2007)—organisational ambidexterity (O’Reilly and Tushman, 2004), and entrepreneurial bricolage (Baker and Nelson, 2005), the paper examines how the model accelerates the development of critical organisational routines. By shortening cash-to-capability cycles, de-risking investment for private firms, and institutionalising rapid learning loops between frontline demand and a distributed production network, the Danish model fosters systemic resilience and innovation. The analysis interprets the observed outcomes—including hundreds of millions of euros in direct orders, the establishment of co-production facilities on NATO territory, and measurable increases in the output of critical systems like artillery and drones—not as isolated procurement successes, but as evidence of system-level capability building. The paper concludes by discussing governance risks, proposing a framework for measuring capability growth, and outlining a research agenda to further explore this innovative approach to defence-industrial cooperation.

Keywords: Danish Model, Direct Procurement, Ukraine Defence Industry, Dynamic Capabilities, Sensing–Seizing–Transforming, Organisational Ambidexterity, Entrepreneurial Bricolage, Wartime Production, Distributed Manufacturing, Capability Building, Supply-Chain Resilience, Defence-Industrial Cooperation.