Ukraine’s tech industry has been boasting of its brilliance and importance to the country throughout much of the past five years. It has also been widely praised from many quarters, with experts predicting that the rise of Ukrainian IT is unstoppable.
But is it really so good, given that Ukraine still cannot fully utilize its huge reserve of 172,000 tech specialists, who only contribute some 4% to Ukraine’s gross domestic product anyway?
Yes, Ukraine has become a birthplace for three so-called unicorn companies, including Grammarly and GitLab, startups now worth more than $1 billion. But even these guys aren’t chiefly Ukrainian, as their main offices are incorporated far from their motherland — in the United States.
Most Ukrainian innovators are moving abroad as soon as they find recognition because, they say, of poor legal frameworks for the protection of intellectual property and few investment opportunities.
But when they leave, are they taking their innovative approaches abroad, too, leaving Ukraine without the hope that it can ever really become a tech nation?
Tech and business leaders from Uber, Unit.City as well as from McDonald’s, Nestlé and Metro Cash & Carry — are invited to discuss this on Dec. 10 at the Tiger Conference, an annual signature event organized by the Kyiv Post.
They will try to shed light on the reasons why Ukraine is struggling to retain its talent and become truly innovative.
Foster innovation
Ukraine desperately needs innovations, which will help the country to “leapfrog,” in developing its economy faster and making people’s lives easier, according to the Unit.City head Dominique Piotet.
The main innovations in Ukraine are needed in retail, transportation, banking, and government, Piotet thinks. “The basic needs,” he calls them, saying also that it’s the new government that has to foster them.
The executive believes that Ukraine’s tech startups are willing to help in this effort, the government just needs to take this opportunity.
“Local tech talents need to be applied to fixing problems of Ukraine,” he says. “There’s no (other) choice.”
Uber head in Central and Eastern Europe Georgii Sokolianskyi echoes Piotet. Moreover, he stresses that Ukraine has its potential mainly because of its tech people. But they can’t fully realize their potential because of bureaucracy here.
“With its skilled and entrepreneurial people, Ukraine is uniquely positioned to benefit from the global tech transformation,” Sokolianskyi told the Kyiv Post. “But for this to happen, we need to cut red tape and drop antiquated regulation.”
Oleg Krot, a co-founder of the tech holding Techiia, thinks as soon as Ukrainians succeed at home, they can set their firm’s eyes on global success: “Our talents can create a lot of innovations, which, later on, can be used globally.”
But for that to happen, the tech executive urges Ukraine’s government to create the right conditions for investment, for running companies as well as a transparent tax system and better education.
“These factors are innovations, which our country needs,” Krot says.
Krot also agrees that the go-to industry for Ukraine these days is the tech industry, but Krot, one of its players, has never felt Ukraine’s governments ever supported it — until now.
The new government and president that were elected this year give hope, as they have established the development of the IT industry as one of their administration’s main goals, the techie points out.
For Krot, it is an obvious decision: Local IT exports most of its developments abroad, attracting foreign money that, with proper conditions created, can end up in Ukraine’s budget through taxes.
“If we have conditions for investments (to come) and for protecting these funds, if there’s a level playing field — investors will take more interest in Ukraine,” Krot says, “they will put more trust in the country as a whole and its new government.”
Programmers work at their desks in one of the buildings of Unit.City, a tech hub that hosts information technology startups, in Kyiv. The portrait of tech giant Apple co-founder, late Steve Jobs hangs on the wall of the premises, signifying innovations in the information technology industry. The Kyiv Post Tiger Conference will take place at Unit.City on Dec. 10, 2019. (Volodymyr Petrov)
Agriculture and tech
Another industry that Ukrainians have high hopes for is agriculture. But local farming has had a bumpy road over the last years.
Back in 2012, the total export of all agricultural products from Ukraine represented $68 billion and fell as low as $38 billion in 2015, in the early days of the Russian-led war in the east, which disrupted many farmers and production mechanisms and led millions to flee the occupied territories. The number rose again by 2018, reaching $47 billion and thus securing 13% of the country’s gross domestic product.
2019’s results are still unclear as the harvest has only just ended, but Ukraine’s Economy Minister Tymofiy Mylovanov said Ukrainian farmers harvested a record-high 74.3 million tons of grain as of Nov. 28, which exceeded the ministry’s forecast for 2019 by 300,000 tons.
But industry experts say it’s not enough. They call for ramping up development in the whole sphere — from farmers and food producers to retailers who sell food to people.
The only way to do that is to bring more tech-related solutions, according to Andreas Huber, who works in the agricultural science division of the U.S. chemical company Corteva Agriscience.
The international expert points out that the food industry is strongly dependent on the agriculture industry.
Meanwhile, changing weather, droughts, floods, heatwaves, diseases, and pests threaten crops. Huber says firms like his must “harness the power of science” to shape the future of the food and agriculture industry.
As with any transformation, making the food system more sustainable requires everyone to collaborate “from consumers to the policymakers that serve them and all the actors in the food system, from farmers to food companies and supermarkets,” Huber says.
“The use of digital technologies,” he goes on, “will have a great impact on agricultural productivity even in areas where access to water is limited. It is expected to result in a significant change to the future of agriculture and the future of food” globally and in Ukraine.
Alessandro Zanelli, CEO of Nestle for Ukraine & Moldova, thinks that the food industry is perhaps the most important one, and not just in Ukraine — but in the whole world.
“What we eat, the way we produce it and the way it gets to us has and will have a growing impact on the environment and public health,” Zanelli says.
The executive encourages planning now for solutions for the challenges of 2050, when the population of the planet hits 10 billion people, the challenge on feeding this amount of people is on the agenda of the food sector, including in Ukraine.
“This is the big challenge and at the same time the big opportunity because the transformation will help to create an industry that is more sustainable, more ethical and economically robust,” according to Zanelli.
The agriculture industry is also intertwined with retail. Tino Zeiske, the CEO of Metro Cash & Carry Ukraine, a wholesale supermarket chain, claims the retail industry plays a major role in keeping high standards for food. And robotization, digitalization and innovative approaches help companies in this task.
“Technology helps food manufacturers to produce more efficiently: improving shelf life and food safety standards, while greater use of machines and software ensures affordability and consistent quality and traceability.”
