The report “Digital entrepreneurship in Ukraine” by VimpelCom, Kyivstar, A.T. Karney Ukraine describes the current state of Ukraine’s digital sector as up-and-coming. Owing to a huge number of start-ups and rapid growth of the industry, the economic environment is more than favorable. The statistics show that only a few start-ups out of annual 400 appearing turn into successful companies. Digital entrepreneurship in Ukraine has been evolving, altering to a strong player in the global economy.
First of all, the country has enough educational institutions and clubs to obtain sufficient and significant knowledge, thus, a constant supply of talented and highly-skilled specialists. Secondly, with the popularization of the Internet and 3G, the number of users has also significantly increased. And, finally, practically all businesses outside IT address the industry for new solutions to upsurge the income and cut on services that could be outsourced. If analyze Ukraine’s chance for becoming A-class digital sector, global players are most likely to pay attention to the following constituents: political situation, state of the economy, legislative system, international policy, etc.. Business education also requires strengthening and deepening, since, the current one is on a high level, however, scarce support from businesses and enterprises does not expedite the start-ups promotion. Ukraine also needs to broaden the markets and attract more investments.
Venture capitals are considered as the main background for establishing start-ups . According to the authors, Ukraine needs “a vibrant digital ecosystem” to incorporate more investors, and, subsequently, to grow into the world-competitive sector. The report includes the data from different sources: digital companies, entrepreneurs, investors, participants, and many others. They reveal that a lot of start-ups either do not even sprout and remain as an idea usually sold to bigger companies, or grow out and become key players on the market. Fortunately, the attrition level, yet high, is decelerating, showing positive tendency for digital sector, existing and potential investors. Among the most prominent Ukrainian start-ups, the authors mention Readdle. The firm developed an application for iPhones and iPads allowing to read, scan and format documents. Currently, it has been installed by over 40 million of users worldwide. Generally, the inquiry reveals that the most popular segments of the digital market like e-commerce, e-travel, e-health, etc., transaction platforms, and Internet of Things. Moreover, mobile apps should be also paid huge attention, since, not all the services and apps developed by the Ukrainian start-ups are available for mobile devices like smartphones or tablets.
One of the negative points is related to the current military situation. The undeclared war with pro-Russian separatists scares the investors away. Despite the actions taken to advertise the positive sides, Ukrainian digital arena still has a lot of hurdles to overcome. Since, the vast majority of the sector players are young people, the development of apps is the future success. Spending on mobile commerce would also bring benefit to the industry in general. Notwithstanding the opinion that digital business is rather weak, IT outsourcing area occupies a significant share of the Ukrainian economy and is now third largest sector in the country. Without governmental support, digital entrepreneurship would not have high chance to compete for the global market.
The report also provides in-depth insight to various stages of start-ups’ life. Mature companies often lack support from the state to advertise it. Investors are necessary to implement long-term strategy and avoid closing up. Qualified staff is also required, hence, advanced cooperation with universities and schools preparing relevant specialists is a matter of discussion. Very few corporations are open for collaboration to accept young people to get practical experience outside educational establishments. Thus, to create positive digital entrepreneurship ecosystem, the needs for market expansion, increase of investments, and innovations.
The complete report can be downloaded from the source