For the greater part of the past decade, I have worked with teams in and traveled extensively across Ukraine. I have been impressed with the size of Ukraine’s labor force and high education rates. I have always thought there is a massive opportunity for Ukraine if Ukraine can address ongoing issues around corruption and IP protection. While Ukraine’s Tertiary Education Rate and large Labor Force impressed me, the enthusiasm I have seen in Ukraine resonated with me the most.
There is still great belief in Ukraine’s potential although most recognize how difficult of a challenge it will be to achieve. This report will call out significant shortcomings in Ukraine. Fact is that Ukraine is underachieving given the size of and education rates in Ukraine’s workforce.
The current crisis in Ukraine is certainly impacting Ukraine’s economy. However, our modeling indicates that Ukraine’s ongoing corruption and IP protection concerns have had a greater effect on the Ukrainian economy in total than the current crisis. Simply put, if Ukraine cannot resolve ongoing risk, Ukraine will never reach full potential.
That said, I am optimistic and hope this report conveys both the size of the opportunity and steps Ukraine can take to realize a brighter future. There are steps Ukraine can take now while addressing risk to greatly improve Ukraine’s overall economy. Ukraine will likely not be able to grow high-value manufactured Goods Exports until risk is reduced. But, Ukraine can transform the entire economy through high-value Service Exports while Ukraine addresses ongoing risk issues.
Further, global employers want to help Ukraine develop their workforce. Over the past several years, we piloted concept programs in Ukraine intent on understanding how to improve global private sector involvement in Ukraine and methods for creating high-value jobs now. Our pilot projects proved there is an immediate global appetite for Ukrainian talent and the world’s top global employers want to work with Ukraine to develop a future state workforce. I believe in Ukraine. There is great opportunity and there are proven steps Ukraine should take now to realize this better future.
We recently completed a comprehensive assessment of the Ukrainian economy.
Key findings from our research are as follows:
The Ukrainian economy should be over $1 trillion today.
Every aspect of the Ukrainian economy is underperforming.
The crisis in Ukraine is having a significant negative effect on all facets of the Ukrainian economy.
Ongoing corruption issues and concerns over IP protection have had a larger impact on the Ukrainian economy than the current crisis.
With top-tier science, technology, engineering and mathematics (STEM) skills and an extremely large tertiary educated workforce, Ukraine can be a true global technology center.
Technical Goods and Service Exports are Ukraine’s best chance for achieving significant economic growth.
Until ongoing corruption issues are resolved, Ukraine will not be able to grow Technology and ICT related Goods Exports.
But, Ukraine can achieve significant growth from ICT Service Exports (including IT outsourcing). Based on our modeling, Ukraine can grow ICT Service Exports from Ukraine’s current 5-year peak $5 billion to $75 billion while Ukraine addresses corruption.
If Ukraine were to achieve our full ICT Service Exports target while all other exports remained flat, Ukraine would likely grow GDP Market Price $ from $183 billion to $325 billion.
Once Ukraine resolves corruption issues, Ukraine can achieve significant growth in ICT and High-Tech (non ICT technology) Goods Exports. Currently, Ukraine has total technology goods exports of slightly over $3 billion per year (5-year peak value). At targets, Ukraine can achieve over $200 billion in technology related Goods Exports establishing Ukraine as a true global technology leader.
There are no doubts Ukraine presents both great opportunity and an incredible challenge. While Ukraine cannot achieve full potential until risk related to corruption, IP protection and the crisis are resolved, there is still an immediate opportunity for growth if Ukraine aggressively pushes high-value service exports and outsourcing. If Ukraine can resolve ongoing risk from corruption, IP protection and the current crisis, Ukraine is poised to be the next global technology star.