The rapid evolution of drone warfare is forcing the global defense industry to rethink one of its biggest structural problems: cost asymmetry.

In modern conflicts, inexpensive drones costing only a few thousand dollars can threaten infrastructure, vehicles, and even high-value military assets. Traditional air defense systems, however, often rely on interceptors costing hundreds of thousands—or even millions—of dollars per shot.

This imbalance is becoming unsustainable.

Against this backdrop, BAE Systems has signed a memorandum of understanding with startup Frankenburg Technologies to explore the development of low-cost, scalable missile systems specifically designed to counter unmanned aerial systems (UAS).

The collaboration represents a growing shift in defense innovation: combining the industrial scale and manufacturing capability of major defense contractors with the speed and agility of emerging technology startups.

The Economics of Drone Warfare

Recent conflicts—from Ukraine to the Middle East—have demonstrated how drones are transforming the battlefield.

Small UAVs can now perform reconnaissance, precision strikes, and electronic warfare missions at a fraction of the cost of traditional aircraft. More importantly, they can be deployed in large numbers, creating swarm scenarios that overwhelm conventional air defenses.

Traditional missile interceptors were never designed for this type of threat environment.

Using high-end missiles to intercept small drones is not only inefficient—it quickly becomes economically impossible in sustained engagements.

The challenge facing modern air defense is therefore clear: intercept drones with systems that are as scalable and affordable as the drones themselves.

The BAE Systems–Frankenburg Partnership

The partnership between BAE Systems, one of the world’s largest defense companies, and Frankenburg Technologies, an emerging technology startup, aims to address exactly this challenge.

The two companies plan to combine BAE Systems’ expertise in munition design, warheads, and defense manufacturing with Frankenburg Technologies’ work on scalable missile technologies.

The goal is to accelerate the development of counter-UAS interceptors capable of being produced in large quantities at significantly lower cost than traditional air defense missiles.

Such systems could allow military forces to engage large numbers of low-cost drones without exhausting expensive interceptor inventories.

Mass Production for Modern Air Defense

A key concept behind the partnership is mass scalability.

Instead of focusing on highly specialized interceptors produced in limited quantities, the collaboration aims to explore systems that can be manufactured at scale and deployed rapidly.

This reflects a broader trend within defense planning.

Military strategists increasingly recognize that future conflicts may involve large volumes of drones operating simultaneously, making quantity just as important as technical performance.

Low-cost interceptors designed specifically for drone threats could therefore become a new category of air defense weaponry, filling the gap between expensive missile systems and short-range electronic countermeasures.

Startups and Defense Giants: A New Innovation Model

Beyond the technological implications, the agreement also highlights a structural change in how defense innovation happens.

Historically, large defense contractors dominated the development of new weapons systems.

Today, however, startups are becoming increasingly important sources of innovation—particularly in fields like autonomous systems, artificial intelligence, and drone technologies.

By collaborating with companies like Frankenburg Technologies, major defense firms can access rapid innovation cycles and experimental technologies, while startups gain the industrial production capacity and global market access needed to scale their solutions.

The result is a hybrid innovation model that blends startup speed with industrial scale.

Preparing for the Next Phase of Drone Warfare

The proliferation of UAVs has created an entirely new category of air defense challenges.

Small drones are harder to detect, easier to deploy, and far cheaper than the systems traditionally used to counter them.

As a result, future air defense systems will likely require new layers of protection designed specifically for low-altitude, high-volume drone threats.

The collaboration between BAE Systems and Frankenburg Technologies represents one of many efforts currently underway to address this challenge.

If successful, the low-cost counter-UAS missiles under development could help restore balance to the economics of drone warfare—ensuring that defending against drones does not cost more than deploying them.

And in a battlefield increasingly defined by mass, autonomy, and rapid technological change, that balance may prove decisive.

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