March 6, 2023
Rebuilding Ukraine by Supporting Startups
Innovation Programme Manager & Service Designer
Ukraine is a country with enormous potential for startups. With a highly skilled workforce, a strategic location, and a growing tech scene, Ukraine is ripe for entrepreneurial success. However, rebuilding the country by supporting startups is not an easy task. It requires a strong government commitment to creating a favourable environment for startups to thrive, as well as private investment and collaboration between startups and established businesses.
Many can say that Ukraine is a land of opportunity. It is home to more than 300 000 IT professionals and more than 2000 startups, including several unicorns. There are several major IT parks across the country, including the largest IT hub in Kyiv. But innovation happens not only in Kyiv; there are IT hubs in Lviv, Odesa, Kharkiv, and Dnipro. Mariupol was one of them too before the war.
There are many reasons why Ukraine offers a fertile land for business:
- Its geographical location and size;
- Its skilled and competitive labour force;
- It is the most affordable country in Europe to live in, labour prices are low, and they are located close to the European market.
The Ukrainian IT sector is the only functioning export sector during wartime, showcasing its resiliency and adaptability.
Ukraine has a thriving startup ecosystem and is a country of innovative entrepreneurs who generate creative ideas. The main industries served by the startup ecosystem in Ukraine are SAAS, IoT, AI, agriculture, MedTech & healthcare, and IT telecommunication.
Among the most successful businesses are:
- Grammarly, an app that makes your writing better
- Ajax produces hardware for better security
- MACPAW is a Ukrainian software company that creates apps for macOS and iOS. The company’s main product is CleanMyMac. The app deletes the garbage from your Mac and optimises it to work as if you have just bought it
- Reface is another recent loud success that allows users to create face-swap videos, GIFs, and memes. It became the fastest-growing startup in 2020. Over 100 million downloads since its launch in January 2020.
- JOOBLE is one of the leading job search engines in the world among the sites of employment, according to SimilarWeb data. The project was funded in 2006 by Roman Prokofiev and Eugene Sobakarev. The company's motto is ‘to help any person find a job.’ Today Jooble has more than 90 million visits per month. It is represented in 71 countries and is available in 25 languages.
Ukraine has a lot to offer: top-quality software development services, fresh ideas for startups to invest in, access to talent, research and development centres, and all this — in a stunning European country just 2 hours flight from most European cities.
UNIT.City is one of the most resilient innovation parks located in Kyiv. It is an excellent example of how Ukrainians needed a place for innovation, collaboration, and co-creation, which they found in one of the abandoned factories left behind from the Soviet era. Today UNIT.City is a high-tech space for companies, startups, students, professionals, and research laboratories. It is the nuggets Startup hub in Ukraine, and even during the war, it keeps expanding and growing. This is just one of the examples of the resilience of Ukrainians that is crucial when speaking about innovation and rebuilding the whole country.
Diia is my personal favourite in this list because I use it whenever I am in Ukraine and abroad. It’s simple, easy and pleasant to use. Diia is a groundbreaking example of e-governance in Ukraine. It was launched in 2020 by the Ministry of Digital Transformation of Ukraine, and today it hosts more than 9 million users.
According to the Ministry of Digital Transformation, headed by Minister Mykhailo Fedorov, Ukraine is the first country in the world to legally recognize digital identity documents as equivalent to physical ones. The government aims to facilitate seamless collaboration between citizens and the government by leveraging the latest technologies.
The Diia app has even inspired Estonia, a leader in e-government, to develop its own e-governance app called mRiik. The two countries presented their apps together during the World Economic Forum in Davos earlier this year.
Apps like Diia are crucial for improving the lives of Ukrainian citizens and fighting corruption at all levels. By making public procurement more transparent and reliable, Diia has already saved billions of hryvnias.
What can we do to support innovation in Ukraine?
Create a healthy environment for startup development by incorporating:
1. A positive mindset - people willing to experiment, fail, and start again. People who see the value in innovation for a better future for their country and are ready to make changes today. The community celebrates learning and accepts failure. The community celebrates diversity.
2. Talent enhancement - the government and private sector realize that to innovate, they first need to help accelerate talent by creating a comfortable environment, such as accelerator programmes, schools, and innovative education. There are physical and digital spaces to innovate, and they are available for everyone.
3. Co-creation as a basis for innovation - take a bottom-up approach as a foundation. Give a voice to the unknown. Support new ideas and distribute opportunities equally among people. Organise opportunities for networking and community engagement (such as WorldStartup's innovation hubs).
4. Access to capital - There is enough capital to invest in early-stage concepts both domestically and internationally. There are governmental and private initiatives to support innovation. It is important to mention that the transactions, tenders, and decisions are transparent and foster equal opportunities for all.
5. Internationally-oriented approach - Search for and foster international collaboration that will bring benefits to local solutions, giving them a global stage for marketing and collaboration. The goal is to bring a positive impact globally once it is proven to be working locally and can be applied in other scenarios.
Obstacles in the way of innovation
What does the future hold?
The reliability of the situation depends on two major factors. The first factor is the global economic recession that is potentially looming. This factor is already heavily affecting IT budgets and the demand for IT services.
The second major factor is the war. Depending on its duration, outcome, and the policy the state adopts regarding IT workers, several scenarios can be predicted. The most probable and optimistic forecast is that the demand for IT services will remain high, the cash flow will stay in Ukraine, and the IT industry may become the new main driving force of the economy.
Rebuilding Ukraine by supporting startups is a complex and challenging task. However, with the right policies and support in place, Ukrainian startups have the potential to be a driving force for economic growth and innovation. By investing in the startup ecosystem, both the government and private investors can help create a brighter future for Ukraine and its people.
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