A reliable foundation of any country’s economy is its entrepreneurs. They form the bulk of the budget, create the majority of jobs and provide the lion’s share of exports.
Opportunities to create and develop private enterprises largely determine state’s success, the scale of its economy, the standard of living and the pace of development. The welfare in the country is always directly proportional to the number of successful enterprises, both large, medium, and small.
Global economy integration: from the export of brains to the export of products
There are many successful national-level companies in Ukraine. However, the access to new markets is a natural process, grounded by the fact that efficient and in-demand business becomes limited by a single state’s market. This is especially true of innovative industries, where companies only aiming at the global market can secure stable growth and development. Ukraine was previously known as a forge of talent, offering high-quality outsourcing and other services like that, but we are now shifting from the export of brains to the export of products. Eastern and South America, the EU, the Middle East, and other regions are becoming our target markets. It all depends on the type of product, but the main thing is the globalization of business.
Additional exports have a positive effect on the trade balance. According to the latest data from the State Statistics Service, this year Ukraine has acquired various goods overseas for about $5 billion more than it sold. The support of companies that are able to scale, enter new markets, and offer a demanded product to consumers all over the world is extremely important for our economy. Ukraine can become a subject, not an object of the world economy, but we need to combine our efforts to achieve it.
Ukrainian business needs not loans, but investments
What do our enterprises need in order to cooperate with foreign customers and open new markets for themselves? You can have competitive products, but no one will know about it in Ukraine, and especially abroad, without additional efforts. Therefore, it is crucially important to conduct a dialogue with foreign partners not only at the level of heads of state, but also at the level of business, experts, and economists. We are already building a new Ukraine, but so far, the world does not know about it. It is time to talk about our successes because for more than 25 years of independence, we have something and someone to be proud of.
The best way to success is not to be unfounded, but to show real achievements, including participating in global business events such as, for example, the World Economic Forum in Davos, the Consumer Electronics Show in Las Vegas (CES), the Web Summit in Lisbon or the World Business Forum in New York. At such events, the most important global and regional development programs are formed, and the focus for the coming years is determined. Therefore, it is important for Ukraine to be present there, in order to strengthen its position on par with world politicians, businesspersons, innovators, etc.
By participating in such events, we become not a country “with an outstretched hand”, but an equal partner. Only an equal partner gets not loans, but new contracts, investments, partnership agreements.
If, on a regular basis, Ukraine will not demonstrate its successes to potential partners, it will be considered a post-Soviet Eastern European state, with nothing but war and problems in it.
Ukraine is a lab of ideas and solutions
A free exchange of experience between business representatives from different countries is a necessary condition for creating an efficient economy. Around the world, many innovations are introduced into the work of enterprises every year and a significant number of discoveries have a noticeable impact on business. Entrepreneurs are finding new ways to use blockchain technology, create original solutions based on neural networks, use Big Data to the fullest and come up with unexpected organizational solutions.
Ukraine’s task in this rapidly changing environment is not just to master the world’s best practices as quickly as possible, but also to offer its own solutions to problems. We could become an exporter of solutions, an innovation lab – why not?
Ukraine can make a breakthrough, as soon as we definitely have nothing to lose. I think we need to pay special attention to the development of industries that have already become significant: the agricultural and IT sector. The latter became the only one in the whole world, which developed completely independently, without state support and at the same time became the third sector of the economy in terms of exports. We can be proud of these achievements and share our experience with our foreign colleagues.
In 2017, “Ukrainian Davos nights” opened the history of Ukraine’s events in Davos, and in 2018 the first full-fledged Ukrainian house Davos was launched. It attracted many guests of the WEF – more than 5,000 people from 57 countries attended 11 panel discussions. The event was featured in key world media such as The New York Times and Bloomberg. We did not talk about Ukraine, did not praise ourselves – we talked about global trends and the place of our country in them. Our problems are of no interest to anyone; we talked about real opportunities for cooperation with international investors, entrepreneurs, etc.
That is the very format we need to represent our country, giving Ukrainian business more opportunities for development and strengthening success.
Why the world needs us
Can Ukraine offer something interesting in the international arena? Of course, it may already offer. For example, on the background of the expected increase in the world’s population to 9 billion by 2050, there will be an urgent need for food. To prevent mass starvation, the world will need to double the efficiency of agriculture once again. It is extremely difficult to achieve in the countries whose agricultural potential is already used to the maximum, but our country has not yet exhausted the possibilities of the agricultural sector development. In addition, by combining the agrarian sector with innovations, we can use its potential more effectively. Ukraine could become the country that will feed millions of people around the world in the coming decades.
Another example is high-tech projects. Ukraine is very strong in the field of IT, but so far, there is a myth that we can only offer outsourcing – even within the country. In fact, however, there are quite a few grocery companies in the country’s hedgehog, whose valuation is millions and even billions of dollars.
For example, Grammarly is a smart online grammar checking service based on artificial intelligence technologies that recently attracted $110 million of investments. At the same time, the company had previously developed only at its own expense. Or Petcube, whose devices are already available in more than 18 countries and are sold in more than 5,000 retail outlets.
In the entire history of all of Europe, only about 20 companies have grown into “unicorns”, companies with a billion valuation. In Ukraine, we will be able to at least 5 such companies in the near future: Gitlab, Softserve, Grammarly, Ciklum and Rozetka.
The world is changing, and Ukraine, these changes can bring many benefits. Right before our eyes, the “trade war” of the United States with China, which is a reflection of the contradictions that have been accumulating for decades, flares up. It should be expected that leading Western companies will transfer their high-tech production from China to other countries. Ukraine is a possible destination. It is necessary to convince the world community that we have suitable conditions for this. We have to tell and show it. And the World Economic Forum is the best platform for demonstrating the achievements of a country that can become a springboard for the development of the Ukrainian economy.
Andrey Kolodyuk is the chairman of the Supervisory Board of the Ukrainian Association of Venture and Private Capital (UVCA) and initiator of Ukraine House Davos.
