How does a Ukrainian business that has gone abroad help countries that cooperate with it?

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Because of the war in Ukraine, in 2022, almost 8 million citizens left abroad and are still in countries around the world. In this regard, Ukrainian businesses also decided to enter the international market and declare themselves as serious competitor.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

Ukrainian companies in the field of delivery, finance and even street food entered the European markets

Main examples were: “Nova Poshta” delivery company, “Ukrposhta” delivery company, “Monobank” , “Lviv Croissants” street food, and many others. We decided to investigate how the appearance of Ukrainian businesses on the international scene affected the general atmosphere, workplaces, and sales market.

Why does Ukrainian business go abroad?

According to research by the Ukrainian research company “Gradus”, about 50% of Ukrainian businesses need to relocate or have already done so due to certain circumstances. The most popular is the desire to keep one’s business (38%), expand the client base (30%), and have logistical problems (28%). In this regard, 17% of enterprises expanded outside of Ukraine, and 11% completely moved abroad.

Most — 77% entered the market of the EU and other European countries. The leader is Poland, where 63% of enterprises are developing or will do so. The most common reasons for such a choice are demand for products, developed infrastructure and convenient legislation.

AcademyOcean’s” research of Ukrainian IT companies operating abroad after February 24, 2022, which they shared with us, shows that 33.5% of companies have already or will soon start working abroad.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

Andriy Zhariy, CEO of the “Aurum Group”

We asked Andriy Zhariy, CEO of the “Aurum Group”, what he thinks about this.

“I believe that there are two obvious factors for Ukrainian business to enter foreign markets. The first is a reorientation from the CIS markets and the significantly narrower (compared to the pre-war) domestic market to the larger markets of Europe and North America. The second is a more democratic attitude towards Ukrainian goods in the countries of our Western partners, which sometimes even turns into assistance, including at the legislative level”.

He also added that Ukrainian business chooses the EU the most, because it is, in general, one of the largest global sales markets with a population of 500 million people, with which it can compare only to the US market. But European countries, firstly, are logistically closer (and it is easier to deliver, for example, fresh food products there), and secondly, they are historically and mentally closer to Ukraine.

Andriy Zhariy expressed his opinion about what is currently happening with entrepreneurs who are currently in the territory of Ukraine.

“Today, the domestic Ukrainian market has narrowed significantly compared to pre-war times, and although the number of represented businesses has also decreased, competition has not decreased, and therefore, I do not think that opening a new business today in conditions of uncertainty is appropriate. However, opening a business may be justified in view of the post-war prospects, when millions of Ukrainians will begin to return home, and already formed and approved international investment plans for the restoration of Ukraine will begin to be implemented”.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

Oleksandr Yavtushenko, head of the Secretariat of the Public Council under the Ministry of Digital Transformation of Ukraine

Oleksandr Yavtushenko, head of the Secretariat of the Public Council under the Ministry of Digital Transformation of Ukraine, added to the words of the previous expert. He said that the war and the decline of the economy of Ukraine led to a decrease in the purchasing power of the population and a decrease in orders. This forces business owners to look for new sales markets abroad. In addition, competition in the domestic market has become too great (due to a decrease in demand), which also stimulates going abroad. For Ukraine, the markets for the provision of medical services, sales of essential goods, food products and natural monopolies remain unequivocally profitable.

“This is a question of risks and profitability of management. As soon as the war ends and the risks become lower, the attractiveness of the market will prevail and, thanks to proper risk management, most businesses will return to Ukraine. This applies primarily to businesses owned by Ukrainians, but major international players will also gradually return”.

He also explained why there is an outflow of personnel from Ukraine. According to him, the main reason is not the relocation of Ukrainian business abroad, but the lack of work in Ukraine and the search for safe living conditions for himself and his family while the war continues in Ukraine.

What are the consequences for us and for them?

Research by the “AcademyOcean” company showed that 41.1% of businesses that have moved abroad are planning or are already hiring foreigners to work for them, thereby creating jobs.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

41.1% of businesses that have moved abroad are planning or are already creating jobs

Andriy Zhariy said that the development of Ukrainian business abroad is primarily beneficial for Ukraine, because the sales (export) markets of Ukrainian goods and services on the territory of other countries are expanding. This will provoke the receipt of foreign exchange, the creation of new jobs, an increase in tax deductions to the budget of Ukraine, etc.

He also added that Ukrainian entrepreneurs have a positive influence on the international market. The creation of new businesses in the EU countries means the creation of new jobs, tax deductions, and ultimately the formation of GDP. That is, at the macro level, this is positive for these countries. 

“I’m not talking about the fact that in some countries consumption has increased significantly due to refugees from Ukraine, and this is an additional development for local business. However, apparently, certain industries have experienced increased competition from enterprising Ukrainians, but in the long term this is also a plus, because in general it makes the economy more efficient and competitive”.

Oleksandr Yavtushenko explained in more detail about the competition:

“Ukrainian business can be competitive in some industries, especially in those where it has technological advantages or cheap labor. However, at the general level, the competitiveness of Ukrainian business may be limited due to risks. Caused by the war, a very weak economy and a lack of investment in equipment modernization and technological renewal”.

Ukrainians have registered more than 10,000 companies in Poland since the beginning of this year. Including 9,829 companies — after March 1, reports “Business Insider Polska”.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

Private companies established by citizens of Ukraine in 2022 and their share in the total number of new enterprises

Every fourth company is engaged in construction (most often construction and finishing works). 16% of newly created businesses are IT companies, 7% are transport and logistics companies (taxis, cargo transportation, warehouses).

“Business Insider Polska” writes that Ukrainians fill precisely those niches where Polish specialists were lacking.

However, the “Gradus” research shows us that there are certain difficulties that Ukrainian business faces in the EU. Firstly, there is high competition, bureaucracy, language barrier and difficulties in finding qualified accountants. Despite this, 83% of the surveyed business owners believe that Ukrainian enterprises can be competitive on the international market.

Zhariy predicted that after the end of the war, the start of the implementation of many infrastructure and investment projects in Ukraine, on which there are already firm agreements with foreign countries and businesses, is expected. The volume of declared investments exceeds the volume of direct foreign investments received in Ukraine over the last dozen years.

This will lead to a significant increase in the country’s GDP, a significant increase in the number of enterprises, and an improvement in the welfare of citizens. The de-occupied regions will be in the fairway for the dynamics of investment, infrastructure development and recovery, but it is unlikely that in other central or western regions there will be a shortage of new entrepreneurs or investors.

Yavtushenko added that agriculture, IT technologies, export, tourism and infrastructure projects could become the leading industries. However, with regard to the outflow of business to the de-occupied territories, this will depend on many factors, including the political and economic stability in these regions, the availability of infrastructure and market, and the readiness of the business itself to return to these territories after a long absence.

The story of one Ukrainian business that went abroad

Volodymyr Polo, CEO of “AcademyOcean” company, agreed to tell the story of his company’s departure abroad, after the start of a full-scale war. Further from his words.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

AcademyOcean team. Screenshot from online meeting

“AcademyOcean” is a smart platform for employee training, with a world record user-friendliness rating of 9.8 out of 10. The platform is based on the latest scientific methods for adult learning, so we consult with global HR, L&D experts and academics. Such as: Nigel Pine, Donald Taylor, Dave Ulrich and Robin Hoyle.

“Our platform is used by clients in 30 countries, from the USA to Singapore, and has over 400,000 students. The “AcademyOcean” team operates in 7 countries and has 27 people who speak different languages ​​to provide the best customer support”. 

A third of the company’s clients are Ukrainian businesses. When the war started, they had a hard time. Someone stopped working, someone put the business on hold. Among their clients, there were many businesses that entered new markets and started hiring employees there. Therefore, they also needed to look for opportunities in order not to lose their business. Therefore, they entered six new countries. For example, in Singapore and Norway. And also expanded the team.

How does a Ukrainian business that has gone abroad help countries that cooperate with it?, The Ukrainian Review

Volodymyr Polo, CEO of “AcademyOcean” company

Since the beginning of the full-scale war, the number of clients among Ukrainian companies has doubled. Also, despite the war, many good processes took place within the company. For example, their team has doubled in size and received funding and support from 7 Wings and Google for Startups. Also, the war partially affected the geolocation of workers.

“Another positive factor is that during the war, we realized that we have influence and opportunities to help other Ukrainian businesses grow and develop. This is how a number of social projects and initiatives emerged. How “Coaching for Ukraine”. The “AcademyOcean” team invited influencers in HR and L&D to hold webinars for Ukrainian colleagues and share tips on working in global markets, employee support and mentoring. The project was supported by the Ministry of Culture and Information Policy of Ukraine and the most famous job search sites in Ukraine, Robota and Work.ua”.

Volodymyr said that in Europe he was pleasantly surprised by the kindness of local businesses that actively helped the company. Poland was a pleasant surprise. In understanding the digital training of employees, the country is 2-3 years ahead of the Ukrainian market. Among the obstacles, the most important were the language barrier to which it was necessary to adapt and weak digitization, which complicated simple processes for Ukrainians.

“The global market is very attractive, but the entry threshold there is much higher than in the local market. After all, it needs a new adaptation of the product, new marketing, new sales scripts. Therefore, we asked our business partners and familiar businesses that successfully work with the markets we are interested in to advise us on the specifics of working with this market”.

Also, the CEO of the company believes that the main advantage of Ukrainians on the international market is their ability to survive the apocalypse:

“During the war, we showed that we can work no matter what. Neither blackouts nor work from storage prevented Ukrainian business from growing. The Ukrainian IT industry is already a brand. For example, even before the war, the national IT industry became one of the largest exporters of IT services in Europe, growing by 25-30% annually. Today, the technology (ICT) sector accounts for more than 40% of the country’s total exports, “Opendatabot” research shows”.

Netpeak Group — a group of companies, which includes “AcademyOcean” together with the Ukrainian company Genesis, purchased a marine drone for the new high-tech Ukrainian fleet. One such device costs 10 million hryvnias.

Tatiana Stelmakh