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. Pharmacies, trade, any business that can work. 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.

Therefore, the government has received a clear instruction–to return small and medium-sized businesses. Remove any obstacles. Reduce taxes as much as possible, remove all difficulties, absolutely all. So that the system does not press, so that people know that they can work the way they can. Where they can.”

Subsequently, the Ukrainian government cut taxes on small and medium businesses to a single simple scheme: 2% of sales–and, interestingly, it is voluntary: if a business cannot pay, they will be excused. In addition, excise duty on all imported goods has been cut to zero. 

With industries that deal with physical products being severely affected by the infrastructure challenges, there are high hopes for the third largest sector, tech and IT, to keep going despite the devastation being caused in the country by the Russian invasion. As a call to action, for those who wish to send 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.  

The industry’s resilience shows in the numbers as well, which are remarkable, to say the least: The volume of IT exports has increased by 28 percent in 2022 so far over the same time in the previous year, according to the IT Ukraine Association, and for the first quarter of 2022, the industry brought in a record $2 billion in export earnings. Seventy-seven percent of Ukrainian tech companies have brought in new clients during the war.

Ukrainian tech has shown resilience due to the following reasons:

1. The strong digital infrastructure in much of the country—and backup plans in case something goes wrong—the internet was mostly operable, especially in cities
2. Ukrainian tech firms had already made contingency plans dating back to Russia’s 2014 invasion and annexation of Crimea
3. The government helped by not drafting tech workers into the military. In addition, there are tax breaks for small and medium businesses
4. Tech companies pursued various approaches to ensure worker safety and lower the risk of a total outage. Working through 2 years of a pandemic helped them get used to a distributed workforce
5. Tech workers have been given special IT security training to make sure their participation in the cyberwar did not affect client work

In light of all this, we are speaking to many IT and tech companies in Ukraine, as well as their clients, over the course of the summer. 

The conversation will be shared in the form of short video episodes. The initial episodes are below. Please check back as new episodes will be added over time.,