At a certain point in the game, it goes from being a colony rush to kind of an arms/economics race. It seems in higher difficulty the arms race favors the AI, which is good, but its not impossible for the human player to catch up. Basically, what I recommend is and have experimented with is, when more weapons/engines/defenses come along, build a hull for each sized craft in your empire, then upgrade to the superior plateform. I did this in a game recently, and it worked much better than I thought it would. I'd just finished war with the Altarians, and Drengin were now looking at tmy empire with jealousy, and were even bringing transports into my territory, and it looked like blitzkrieg. Well I went and made a balanced design for all my ships from dreadnaughts to interceptors, and upon upgrading, the ships were so powerful that my military raiting shot through the roof, and I got to watch for the first time as the Drengin retreated from my territory.