Imagining a Digital Economy for All in Ukraine

A Call to Action for Our Readers

Please consider outsourcing your tech work to Ukraine. Several sites have emerged to help companies find such Ukrainian tech talent, including UA Talents, Ease Work, Hire for Ukraine, EmployUkraine, and Imagine Ukraine. Learn more below.

Imagining a Digital Economy for All in Ukraine

With Russian bombs raining down on his citizens, on March 14, 2022, President Volodymyr Zelensky of Ukraine said:

“As long as the state is at war, as long as the people are defending themselves, the economy must be preserved and restored. As much as possible in the current difficult conditions. Life must appear on the streets of the cities. Where security allows. Where people can provide it. […] For the country to live. For the restoration of Ukraine to already begin. And it depends on each of us, on each of us who is able to work. […] Economic suppression of Ukraine is one of the tasks of the war against us. And we have to fight back from that as well. Save our economy. Save our people.”

Zelensky instructed his government to remove as many obstacles to SME continuity as possible. As a result, Ukraine shifted taxes for all small and medium enterprises to a simple scheme: 2% of sales. Even this tax is flexible: if a business cannot pay, it is granted an exemption. Additionally, excise duties on all imported goods have been cut to zero.

As other sectors are severely impacted by the infrastructural damage caused by Russian weapons, technology and IT firms shoulder significant responsibility for bolstering Ukraine’s economy amid ongoing conflict. The industry has seen remarkable growth over the past year, bringing in a record $2 billion in export earnings in the first quarter of 2022. A staggering 77% of Ukrainian tech companies have brought in new clients during the war—many from Western countries. By May, the volume of IT exports had increased by 28% compared to the previous year, as reported by the IT Ukraine Association.

The Ukrainian tech and IT sector is resilient by design, not by chance. These numbers are the product of several actions, some of which are the culmination of years of effort:

• The strong digital infrastructure in much of the country—including backups in the event of system interruption or failure—ensures that the internet remains mostly operable, especially in cities.
• Ukrainian tech firms had already made contingency plans dating back to Russia’s 2014 invasion and annexation of Crimea.
• The government helped by not drafting tech workers into the military. Additionally, tax breaks offer financial relief to small and medium enterprises.
• Tech companies pursued various approaches to ensure worker safety and minimize the risk of a total outage. Apart from the 2014 invasion, working through the COVID-19 pandemic acclimatized Ukrainian firms to a distributed workforce.
• Tech workers have received special IT security training to ensure that their participation in cyber warfare operations does not impact client work.

In March 2022, the Digital Planet team launched a new initiative: “Imagining a Digital Economy for All in Ukraine.” We spoke with many IT and tech companies in Ukraine, as well as their clients, to learn more about their experience navigating managing people and projects during the war. These conversations continued throughout the summer, as the business world shifted in response to the ever-changing operating environment. You can view these interviews in the form of short video episodes under “Conversations with Industry Leaders.”

Digital Ukraine: One Year Since the Invasion

“Backup is our favorite word right now.”

-Kateryna Ryzha, project manager and head of PMO, Softjourn