Ukraine’s intellectual property rights dilemma, the legacy of its Soviet-era weapons of mass destruction programs, and the country’s difficulties in attracting high-tech research & development projects all came to a head at Kyiv’s American Chamber of Commerce meeting on June 13.
Vic Korsun, deputy executive
director (US) of the Science & Technology Center in Ukraine
(STCU) spoke at the meeting about the 19-year-old organization’s
new focus on firms working on the Ukrainian market. He sees
opportunities for multinational corporations to cooperate with
Ukraine’s research institutes.
“There are foreign companies with
a presence in Ukraine which have technical needs or research and
development questions that they can’t easily solve on their own, or
that could be handled in a more cost-effective manner over here.
Those companies can use the STCU’s services and economic advantages
to find engineering or scientific partners to provide answers to
their questions, from theory through to prototype.”
The STCU was founded in 1994 to
provide work for scientists and engineers in Ukraine (and later
Moldova, Georgia, Azerbaijan and Uzbekistan), previously engaged in
areas related to weapons of mass destruction-related, in peaceful
scientific activities for civil, social and economic purposes. In the
last several years, however, the focus has been on the institutions
that they worked in, as crumbling infrastructure at sensitive sites
such as the Simferopol Anti-Plague Research Station raised
international security concerns.
At the same time, nuclear material
theft and trafficking is a reality in the country. An incident
involving radioactive material has been exposed in Ukraine once every
year or two between 1992 and 2011, according to
terrorismanalysts.com. This means keeping radioactivity-handling
installations safe will remain an ongoing security issue. As such,
STCU remains in close contact with scientific establishments across
Ukraine involved in nuclear, medical, electrical and other
engineering fields.
“Ukraine’s research and
development facilities have evolved, but they still need a lot of
help in gaining exposure and promotion to the wider world. Their
scientists largely still don’t think in terms of commercial
viability of their inventions or scientific discoveries. Marketing
and sales skills were, to a large extent, bred out of them during the
Soviet era,” Korsun says.
As a result, only a few projects,
such as Discovery Technologies International’s micro-manipulator,
which entered the Guinness Book of World Records for accurately and
repeatedly moving in half-nano-meter steps, have attracted any broad
attention.
American Chamber of Commerce in
Ukraine President Jorge Zukoski agrees. “One of the challenges that
many scientists from the former Soviet Union face is that they have a
challenge to market and package their research activities and outputs
in a format that is easy for companies to understand on a commercial
level.”
While the STCU once helped fledgling
Ukrainian companies reach out, enabling foreign firms to solve
research and development problems with the help of Ukrainian
expertise is more common now. “In 2012, we reached a high of $18
million in, mostly in partner organization funding, and all told,
we’ve dealt with over 180 partner organizations since 1995,”
explains Korsun.
Dealing with foreign companies once
meant making contacts abroad. Now, with the world’s industrial
giants present on the Ukrainian market for up to 20 years, it is the
institutes’ overall lack of exposure that makes it difficult to
connect with them. As a result, Ukraine is still not perceived as a
research and development outsourcing destination, even though it is
known for its hi-tech software outsourcing prowess.
Ukraine is still known, however, for
its weak intellectual property rights practices. Improving
intellectual property rights will remain an issue in U.S.-Ukraine
relations over the summer, and on July 18 the U.S. Trade
Representative will hold a public hearing in Washington, D.C., on the
matter.
In this respect, the STCU has an
uphill battle in bringing research and development to Ukraine.
However, the commerce chamber’s
Zukoski sees some hope. “One of the main reasons that Ukraine is
actively addressing their intellectual property rights enforcement
shortfalls is the understanding of senior policy makers that this is
in fact harming the country’s competitiveness and stifling the
ability of the economy to grow in the area of value added high
technologies. I believe we will start to shift towards a more
aggressive protection of intellectual property,” he claims.
For Korsun, familiarity may breed
contracts. “This was a next logical step for us,” he claims.
“We’re now talking to companies that are already familiar with
Ukraine, and which can expand their interaction with Ukraine to cover
research and development as well. “
James Hydzik is a Kyiv Post contributor.
