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A winning proposal for Ukraine’s business community

5 mins read

The FINANCIAL — The power of business and business skills can on occasion go unnoticed when conflict intensities into major confrontation. Business leaders past and present have been famed for their “citizen diplomacy”, often creating bridgeheads of commerce, comity and understanding when all other measures of diplomacy have been lost.

In the face of the massive disruptions and human suffering caused by Russia’s invasion of Ukraine, Mariupol born and now London-based Denis Gursky is taking a similarly minded, fellowship-building approach to preserving Ukraine’s skills-base and supporting its economy, London Business School notes.

The LBS alumnus (Sloan Masters in Leadership and Strategy, 2020) is a former Open Data Adviser to Arseniy Yatsenyuk, the former Prime Minister of Ukraine. During Denis’ 2015-16 term in this role, the country noticeably improved its Open Data position and it is now among the 50 most open nations in the world.

Denis has also joined many other professionals and leading politicians to battle corruption in Ukraine, which remains stubbornly widespread. “One important lesson I learnt from my time at LBS was to appreciate and value the notion that corruption can be battled. [Prime Minister Volodymyr] Zelenskyy has made considerable progress in this regard and today you cannot bribe a police officer, bribe a doctor to obtain a prescription, nor pay for an academic certificate. Things have improved.”

Using business skills and his passion for entrepreneurialism, which has been honed across a mix of private and public sector experience, Denis’ present and most urgent ambition, is to preserve his country’s highly skilled workforce, and support its economy in the face of the destruction caused by the Russian invasion of his country, according to LBS.

SocialBoost

Denis is Head of Board at SocialBoost, a Ukrainian tech NGO that he started and which exists to connect startup communities with government. SocialBoost aims to resolve national challenges and spark promising innovations. In 2018, Denis opened a physical office space called the 1991 Civic Tech Center. Supported by the Omidyar Network, it is a place where young entrepreneurs can work, hold meetings, network, and learn from each other and other experts.

With initial seed capital of $50,000 from the Western NIS Enterprise Fund, Denis and his team subsequently launched the 1991 Open Data Incubator, a programme that has nurtured fifty-two startups that have since raised over $10m, while SocialBoost itself has now closed its recent round of funding at $3.5m.

And then came the war in Ukraine, which has placed unbearable strain on every aspect of life as the country struggles to keep functioning despite the all-consuming series of emergencies thrown up by the conflict. The country’s economy has been badly hit, and it is reckoned that GDP has fallen by half since Russia invaded.

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Naturally, many people have abandoned their jobs to flee, fight or take care of the most vulnerable while the Ukrainian government wants its citizens to return to economic activity as soon as possible. It is an instruction that is not lost on Denis and his colleagues at SocialBoost. Denis wants to preserve Ukraine’s talents, its most promising businesses and, though it is hard to contemplate during these dark times, he wants to energise plans for a brighter future.

Ukraine – a powerhouse of talent

“Ukraine is an extremely innovative country, and we must not forget what we have to offer. We need to plan for the future as much as we are focused on the present crisis,” says Denis, pointing to the fact that before the conflict Ukraine was viewed as a great destination for investment.

“From a business perspective, Ukraine is a very European country. Our workforce is very highly educated. Around 90 per cent of the population have benefited from Higher Education.”

Denis points to institutions such as the highly thought of Igor Sikorsky Kyiv Polytechnic Institute in Kyiv and the growth of the IT sector as the key economic and skills advantages that the country has to offer.

“Our technical schools are very highly thought of within Europe and internationally,” comments Denis. “The positive impact of this growth in our skilled labour force has translated into investment with $500m invested in Ukrainian startup industries last year.”

The key data points which characterise this important part of Ukraine’s economy are exceptional. The IT-outsourcing sector in Ukraine is worth more than $5bn, and has seen between 25-30 per cent annual growth in recent years. Ukraine benefits from 200,000 certified IT professionals, which in turn benefits UK plc by managing around 20 per cent of all of the UK’s digital outsourcing requirements.

“Additionally, Ukraine is a crypto haven for investors and talent,” adds Denis. “To illustrate this fact within the context of the conflict, Ukraine’s army received more than $100m in crypto donations from crypto startups and blockchain-focused investors.”

Alignment with UK plc

A strong alignment with British business standards, an appreciation for robust governance and responsibility, combined with a proven record of being able to manage crises, and anticipate fail-points are, Denis says, significant advantages for those contemplating doing business with Ukraine.

“Within the mix of our large community of highly skilled IT experts is around 4000 skilled cyber security professionals. This makes a formidable talent pool,” says Denis.

Challenges ahead

Currently, many of Ukraine’s companies located in the east of the country have been displaced and still are not settled in Western Ukraine or Europe. They are looking for new prospects; reincorporation, and investments.

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“A lot of talent and companies are reincorporating in Poland, Germany and Spain, but not in the UK,” says Denis. “Founders are primarily looking for access to capital and partner ecosystem — efficient ways to save companies’ equity.”

As the financial centre of Europe, the UK is hard to access for Ukrainian digital businesses owing to complicated visa procedure, incorporation regulations and t restricted access to the UK’s capital market.

“The UK is supporting Ukraine massively through humanitarian assistance and through the Foreign, Commonwealth & Development Office. However, there is another strategy to consider, one which supports the Ukrainian economy at its most scalable and fast-growing heart — the digital market.”

UK-Ukraine Tech Scheme

With so much talent on offer, yet with so much to lose, with the economy in jeopardy and valuable IT professionals contemplating a life abroad (potentially never to return to the Ukraine), Denis’ response is to launch what he calls the ‘UK-Ukraine Tech Scheme’. The scheme will support the Ukrainian economy by offering UK businesses “fast and dynamic” access to Ukraine’s digital sector. The scheme would aim to save businesses, equity and provide Ukraine-based talent with jobs.

Denis envisages three major pillars to the scheme:

‘Ukraine Tech Renovation Fund’, a venture philanthropy fund that supports Ukrainian digital businesses with seed funding from both UK government sources through match-funding, and a coalition of supporting Venture Capital and private equity firms;
‘Soft Landing Programmes’ for Ukrainian founders and companies which meet the criteria to obtain a UK visa support within weeks, incorporation assistance and facilitated access to capital;

The development of a ‘Ukraine IT House’. Launched in partnership with the university sector, the ‘House’ would operate as a campus and a place-to-go for the community of Ukrainian IT professionals, startups and IT companies reincorporated in the UK for networking, mutual projects, meeting with investors and corporates.
If he is successful, Denis and his colleagues at SocialBoost envisages a win-win for both Ukraine and the UK business community. “First, the scheme offers an injection of new clients and investors in Ukraine’s digital businesses, secondly, it offers UK plc access to some of the finest talent in Europe,” says Denis.

Ultimately, Ukraine’s economy must continue, and by supporting one of its key income-earning sectors, UK businesses have the potential to lessen the catastrophic impacts of the war, allowing for Ukraine’s skilled citizens to one day return to their country and enjoy a brighter future.

 

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