A year into the war in Ukraine, the country’s resistance is defined not only by its leaders and soldiers but also by talented civilians armed with only laptops or smartphones. They are working from bomb shelters in Kyiv, cities on the western border, European refuges, and remote workstations on the other side of the world. They are the leaders of Ukraine’s digital transformation. As allies imagine a viable path to peace and design a new Marshall Plan for the 21st century, betting on the country’s tech talent should be the top priority.
Helping the tech sector is crucial to aiding the country’s economic vitality, and by extension, the fight for democracy. As President Zelensky noted in his historic address to Congress, support for Ukraine “is not charity. It’s an investment in global security and democracy.”
Around 5 million Ukrainians have lost their jobs because of the war, and the digital rebuilding of the nation should not wait until the guns are silenced. The country needs foreign direct investment urgently to boost an economy that has lost more than 30% of its value.
New investment should focus on the Ukrainian tech talent that has performed incredible feats during Europe’s largest conflict since World War II–both in the country and the diaspora. They have coordinated humanitarian efforts, battled misinformation, and protected critical systems from cyberattacks. The war has not dimmed their dynamism and optimism. Remarkably, the I.T. Industry grew by 2.2% in 2022, generating over $7 billion in exports.
Clearly, there is risk involved when investing in a warzone. But in the long run, supporting talent can create a potent counterweight to the uncertainty of conflict. Just look at Warren Buffett’s farsighted investment in Israel–a country that has become a tech superpower despite facing existential risk–during the Lebanon War of 2006.
Similarly, despite all the challenges of a brutal, attritional war, the conditions for Ukraine to build a thriving tech ecosystem are promising. Plans for Ukraine to become one of Europe’s leading tech powers with the highest number of startups per capita were in place before the conflict, and the entrepreneurial momentum to advance this goal has only accelerated.
Even after a full-scale invasion, the I.T. Industry maintained 96% of services exports compared to March 2021. The value of I.T. Services in the first half of 2022 was even 23% higher than in the same period the previous year. The tech sector tops the list of service exporters. It’s growing faster than any other goods or services industry–and generates over 4% of Ukraine’s GDP. Some leading companies that originally hailed from Ukraine–such as Grammarly and Gitlab–are already internationally renowned.
In 2020, Ukraine established an intellectual property agency to align with European Union legal and commercial norms, developed favorable tax regimes for tech businesses, and provided digital tools to enhance corporate governance. Access to digitized government services has expanded since the start of the war. An e-residency project allows tech entrepreneurs to register and run a business in Ukraine remotely. The country’s digital infrastructure has proven resilient, thanks to its dispersion of important data on the cloud and a skilled cyber defense sector.
The essentials of talent, infrastructure, and government incentives are all strong in Ukraine. There are tangible things to do right now to invest in the country’s tech future.
First, a new startup prize competition would attract a wide range of talent both inside Ukraine and in the diaspora. Sponsors of the prize can work with the government to provide financial and regulatory assistance to startups and help complete the development of their products.
Second, to “de-risk” moonshot projects, the government could assume some of the business risks of success, asking only for its funding to be returned in the event of commercial success, rather than also taking a share of a moonshot’s future profits.
Third, a common exchange platform for philanthropies, businesses, and government would make the market much more efficient. For example, a platform could drive coordination, information sharing, and combine expertise both to source and maximize new funding opportunities.
Ukraine, and all who support its fight at the vanguard of freedom of democracy, need to attract global investors to fund new ventures and increase global literacy around investing in the country.
Peace will only be the first step toward rebuilding Ukraine. That is exactly why the time is now to unleash the potential of Ukraine’s unsung talent.
Eric Braverman is the CEO of Schmidt Futures.
The opinions expressed in Coins2Day.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Coins2Day .
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