Futurology at SelectUSA 2024 - the Ukrainian technology sector: аdapting and thriving amidst challenges

June 26, 2024
Futurology at SelectUSA 2024 - the Ukrainian technology sector: аdapting and thriving amidst challenges
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As Ukraine navigates the third year of an unprovoked full-scale invasion, its technology sector stands resilient and adaptive, playing a crucial role in the nation's economy and post-war recovery.

At today’s "Ukrainian Technology Sector Investment and Partnership Opportunities" reception, part of the SelectUSA Summit, industry leaders and representatives from prominent tech startups gathered to discuss the current capabilities and future potential of Ukraine’s tech sector. The event featured welcoming remarks by Marisa Lago, Under Secretary of Commerce for International Trade, and a panel discussion moderated by Valerii Dobrovolskiy of USAID's Competitive Economy Program. Key figures from Ukraine's digital transformation and tech industry, including Oleksiy Dobronravov from the Ministry of Digital Transformation, Sviatoslav Kavetskyi from the Lviv IT Cluster, and CEOs of leading tech startups, shared their insights. The evening concluded with a networking reception, providing a platform for building meaningful connections and exploring new collaborations.

"It’s not by chance that we started exploring the Summit at the National Museum of American History. We saw how the U.S. economy evolved from a raw-material-based economy, exporting raw materials and importing certain technological solutions, to an industrial powerhouse exporting high-tech products worldwide. This transition took place on fertile ground, rising above challenging times, but the revenue that sustains the country today comes from entirely different sectors" - said Valerii Iakovenko, co-founder and managing partner of Futurology.



Currently, Ukraine primarily produces raw materials, but as we talk about evolution, the time will come, and in fact, it has already started, when Ukraine will begin exporting high-tech products. To achieve this transformation, USAID's role is crucial. Their programs can support Ukraine in developing a resilient economy by providing technical assistance, financial resources, and consulting services. This support helps small and medium-sized enterprises (SMEs) involved in processing and creating high-value-added products. Improvements in infrastructure, access to international markets, and advanced technologies are essential for Ukraine's economic growth.

Ukraine needs to focus on several key areas to realize its potential:

  • Investment in R&D: Significant resources should be directed toward research and development to foster innovation and new technologies.
  • Support for SMEs: Financial and technical support is essential for entrepreneurs engaged in processing and producing high-value-added goods.
  • Education and Workforce Training: Investing in education and vocational training ensures a skilled workforce for high-tech industries.
  • Infrastructure Development: Building the necessary infrastructure to support industrial growth and exports is crucial.
  • Improving the Business Environment: Creating favorable conditions for businesses by reducing regulatory barriers and ensuring access to financing is vital.
  • International Partnerships: Establishing strategic partnerships with other countries and international organizations can help share knowledge and technology.

By actively working on transforming its economic model and focusing on high-value-added production, Ukraine can adapt to global economic challenges and achieve its goal of becoming one of the leading economies in the world. The prominence of the Ukrainian spinoff event and the strong focus of the U.S. on Ukraine were underscored by the participation and support of high-profile government officials.

In her opening remarks, Under Secretary Marisa Lago emphasized the dual purpose of their stand against Putin's brutal war: "We're standing against the tyranny of Putin's brutal war, but we're also standing for freedom and sovereignty, which is going to be a humbling fight."

Lago stressed the importance of focusing on Ukraine's economic recovery and reconstruction, even amidst ongoing conflict. "For my team at the U.S. Department of Commerce, which specializes in promoting international trade and investment, our focus is on pushing ahead. We are looking at Ukraine's economic recovery and reconstruction, but we aren't waiting until the war ends."



The Department of Commerce, in collaboration with the State Department and USAID, is committed to connecting Ukrainian entrepreneurs with their U.S. counterparts. "That's why we're here: to connect your entrepreneurial sphere with entrepreneurs in the U.S., to provide financing from the U.S., and to integrate with our innovation ecosystem", - Lago explained.

She highlighted the on-the-ground support in Kyiv, where Sarah Nickel, their Foreign Commercial Service officer, works tirelessly. "If you haven't already met her, you must, because the work starts here but continues back in Kyiv every day".

Lago concluded with optimism: "Thank you for your optimism. You give me further hope for the future of your country. Thank you".

Members of the panel discussion shared their sentiments about the resilience of Ukrainian IT companies. The war brought unprecedented challenges, including rocket attacks and electricity shortages. Despite these adversities, Ukrainian IT companies successfully completed projects, showcasing their resilience and ability to adapt. Demonstrating their capacity to execute projects during wartime builds trust with potential clients in new markets, proving their expertise and reliability.

The Ukrainian tech sector has shown immense patriotism, with 80-90% of tech professionals actively supporting resistance efforts. This includes funding for equipment, vehicles, and various essential projects, reflecting the industry's solidarity and proactive support for the country's defense.

Ukrainian tech firms have repurposed technologies originally developed for other markets to aid the war effort. For example, a simulator for NFL quarterbacks using AR and VR technologies was adapted for military training. Additionally, traditional corporate events were transformed into online fundraising initiatives, supporting military and industry projects and fostering a sense of community and purpose within the industry.



The war prompted a shift from outsourcing to product development, enhancing competitiveness with Western companies like SAP, Oracle, and Microsoft. By leveraging established technologies and data pools created by global competitors, Ukrainian businesses can innovate efficiently.

There is significant opportunity for AI startups in Ukraine, with several already making strides in the U.S. market. AI technology has become more accessible and affordable, and companies of all sizes are seeking to integrate AI solutions. Developing top-tier AI software and data science capabilities will empower Ukrainian businesses, enhance their global competitiveness, and open new revenue streams.

Ukraine has emerged as a digital state with innovations like the Diia App, which integrates digital services for taxes, health, and banking. The country boasts a vibrant tech ecosystem that has long provided reliable software development and outsourcing services to Fortune 500 companies, alongside developing world-renowned tech products like Grammarly and Reface.

The introduction of Diia City, a favorable legal framework for the technology industry, has attracted over 1,000 companies, including global giants like Revolut, Visa, Nokia, Lyft, and SAP, which maintain R&D offices in Ukraine. This sector now accounts for 5% of Ukraine’s GDP, highlighting its importance in the country's economic landscape. Despite the war, Ukrainian tech companies continue to deliver exceptional value to investors and clients, demonstrating their resilience and reliability.

Launched just two weeks before the full-scale invasion, the Diia project aimed to offer favorable conditions for IT and digital economy businesses in Ukraine. Despite the challenging timing, the project quickly gained traction, supporting over 1,100 companies today.

Diia provides comprehensive support to companies, helping them navigate issues related to taxation, communication, contract management, and more. Ensuring internet access for IT companies during the war's initial weeks was a priority, enabling companies to maintain operations and connectivity.

The Ministry of digital transformation of Ukraine, the driving force behind Diia, aims to identify and support game-changing solutions, leveraging the unique circumstances of the first technological war to drive innovation and develop strategic advantages in cyber and technological warfare. Ukrainian companies are well-positioned to contribute to global security efforts.

The Ukrainian technology sector has demonstrated remarkable resilience and adaptability amidst the war. By leveraging existing technologies, focusing on AI and digitalization, and supporting innovative projects, Ukrainian companies are poised to compete globally. Through initiatives like Diia, the tech industry continues to drive economic growth and play a critical role in Ukraine's future.

In conclusion, the Ukrainian technology sector's ability to adapt and thrive despite the ongoing conflict showcases its potential and resilience. The SelectUSA Summit, with its focus on fostering international trade and investment, plays a crucial role in supporting Ukrainian tech initiatives. By providing a platform for Ukrainian entrepreneurs to connect with U.S. counterparts, the summit facilitates vital partnerships and access to resources that are essential for growth and innovation. With continued support from events like SelectUSA and strategic initiatives, Ukraine is well on its way to becoming a significant player in the global tech industry, driving economic recovery and innovation.

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