Entrepreneurship is Vital for the Future of Ukraine

Posted by: Chip Laitinen, Economic Counselor, U.S. Embassy, Kyiv

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Last week we celebrated Global Entrepreneurship Week, a time to recognize Ukrainian entrepreneurs and inspire new ones.  President Obama has made entrepreneurship a priority for his administration and at this year’s Global Entrepreneurship Forum he called entrepreneurship the engine of growth that creates good-paying jobs, puts rising economies on the path to prosperity, and empowers people to come together and tackle our most pressing global problems, from climate change to poverty.

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Startup founders are some of the most fearless people you will ever meet and share some important traits.  First, they don’t accept the world as it is, instead, when they see a problem they envision a solution and then set out to make it happen.  Another important trait is that they don’t cower under pressure.  Many entrepreneurs take on powerful, entrenched interests that have no intention of letting go of their old way of doing things, but no matter the challenges, entrepreneurs don’t back down.  Those traits should sound familiar, as they perfectly describe, the courageous Ukrainians who have envisioned a better future for their country and are striving to see that vision through.

President Barack Obama waves as he walks off the stage at the Global Entrepreneurship Summit in Stanford, Calif., Friday, June 24, 2016. (AP Photo/Jeff Chiu)
President Barack Obama waves as he walks off the stage at the Global Entrepreneurship Summit in Stanford, Calif., Friday, June 24, 2016. (AP Photo/Jeff Chiu)

That spirit is why I believe entrepreneurs continue to succeed in Ukraine, and are a key component  to the country’s economic revitalization.  Even during difficult economic times, entrepreneurs continue to create new companies, new technologies and new ways of doing business away from corruption and cronyism.  These new companies are helping Ukraine connect with the rest of the world economically and culturally, and most of all, are creating new, well-paying jobs that are the foundation of the development of a new middle class in Ukraine.  It’s imperative that the government works hard to provide the enabling support and environment for these startups to thrive, and that the financial sector and investors find innovative ways to provide access to capital so startups can grow.

Tech Expo Fun at America House, 2016
Tech Expo Fun at America House, 2016

Ukraine’s entrepreneurial success and future potential is based on its well educated workforce and connections to international markets.  The technology sector particularly stands out because so many of the world’s largest companies rely on Ukrainian IT professionals to keep their businesses operating at the highest levels.  These engineers, developers, programmers and other skilled and experienced workers offer a fantastic entrepreneurial resource.  Not only do they have experience working with the latest technologies, they also see the problems faced by consumers and businesses all over the world and can envision solutions.

 

Certainly, entrepreneurship is more than just coming up with an idea; it also involves developing a business plan, raising funding, assembling a team, creating a work culture and selling the product. This is why I’m proud that USAID supports entrepreneurship efforts like Kyiv Polytechnic University’s Sikorsky challenge.  Participants complete a rigorous six week start up school to hone their idea and find areas where they will need support.  The program culminates with a pitch day for investors.  We are also proud to partner with TechStars on a Startup Weekend held at America House where people of any age or background can come together to create a new business idea. We at the U.S. Embassy are proud to stand with Ukraine and to support Ukrainian entrepreneurs who are seeking to create new and innovative businesses that will power Ukraine’s development.

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Franchising: a Great Vehicle for Business Success in Ukraine

Posted by: Michele Smith and Anatoliy Sakhno, U.S. Commercial Service Ukraine

“The perseverance of franchising in Ukraine during the last year shows that Ukrainian businessmen and women usually find a way to turn negative factors to their advantage” Myrosalva Kozachuk, Managing Partner of the Franchise Group

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Anatoliy Sakhno, Commercial Specialist for Franchising of the U.S. Commercial Service presents 2015 Special Frinchising Report

With a market of 45 million people, Ukraine is one of the largest countries in Europe and should be on the radar screens of all major franchisors.  Recognizing, however, that franchisors lacked information about Ukraine, the U.S. Commercial Service partnered with both the Franchise Group and the Retail Association to start filling this data gap with Ukraine’s first-ever franchise business outlook report.  “Ukrainian Franchises Resilient in Turbulent Times,” a 2015 special report, was presented by Anatoliy Sakhno, Commercial Specialist for Franchising of the U.S. Commercial Service, together with the Franchise Group at the opening of the Franchising 2016 trade show in Kyiv in February.

Franchising-reportThe report includes a survey of more than 100 franchised and non-franchised retail operators in Ukraine and reveals an amazing – and surprising – story about Ukraine’s entrepreneurial spirit.  Despite the conflict in eastern Ukraine and extremely challenging circumstances in the retail sector, the majority (65 %) of franchises reported an increase in annual revenues in 2015. Both franchised and independent retailers are optimistic about 2016, with more than three in four survey respondents anticipating that their company’s annual revenues will increase by 6 % or more in 2016.

The report had its roots in a disappointing trade show experience last summer. In June 2015, the U.S. Commercial Service led a group of 20 Ukrainian entrepreneurs to the International Franchise Expo in New York, one of the largest trade shows in North America and world’s largest gathering of franchising professionals. Although the Ukrainian delegation was one of the largest ever taken to the U.S. for any trade show, and although the Commercial Service and Ukrainian Consulate in New York conducted a promotional seminar about Ukraine’s business climate, U.S. franchisors expressed little or no interest in doing business in Ukraine. The main reasons they cited were the military conflict in the East, the economic crisis, the annexation of Crimea, and a lack of serious market data about the Ukrainian franchise market – its size, trends, and potential.

The reports documents significant growth potential for Western brands in Ukraine’s market as the country turns the corner on its recent economic hardships. A deep dive into this sector also reveals that Ukrainians are not just looking for big franchise brands, but for reliable and innovative business models and best practices in process and business management.  Why? Because recent data has proven that franchising is a reliable way to reduce operating risks and improve a company’s chance of long-term survival.  For example, after ten years of operations, nine in ten enterprises working under franchise arrangements stay in businesses, compared to just 18 percent of all enterprises that remain in business after their first ten years. In a nutshell, Ukrainian entrepreneurs have figured out that their long terms chances of success are five times higher if they use the franchising model.

To help build a data-rich history of this sector in Ukraine, the U.S. Commercial Service and the Franchise Group will issue a second survey and report on franchising in Ukraine in 2016.  Working together, we aim to help spread the word that Ukraine’s franchising market is alive and well and making a positive impact on businesses’ development. Read the 2015 report and learn more about opportunities for trade between the U.S. and Ukraine in the franchise sector at the U.S. Commercial Service in Kyiv’s franchising page.

 

Global Economic Statecraft Day: America is Open for Business

Global Economic Statecraft Day is a global event on June 14th to highlight America’s commitment to put economics at the center of its foreign policy and to use diplomacy to advance America’s economic renewal. The key theme of the day is – America is open for business.

Please click on the link below for more information on the embassy website!

http://ukraine.usembassy.gov/events/gesd.html

Secretary Clinton will deliver remarks at the African Growth and Opportunity Act Forum and marks Global Economic Statecraft Day.

A Taste of Alaska

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Posted by: Randall Hager, Agricultural Attaché

U.S. Ambassador John Tefft at Alaska Seafood presentation at “Fish World Oceaniia”
U.S. Ambassador John Tefft at Alaska Seafood presentation at “Fish World Oceaniia”

Although it may not sound like an activity that fits within a diplomat’s usual duties, introducing new foods to Ukrainian consumers is an important part of our responsibility–and one that we enjoy.  The Foreign Agricultural Service, an office within the U.S. Embassy in Kyiv, takes pride in providing opportunities for Ukrainians to sample new products from the United States, and at the same time develop stronger bilateral trade and business.

On May 25, we had the pleasure of working closely with the Alaska Seafood Marketing Institute and local company “Fish World Oceaniia” to highlight the value, quality, and taste of American seafood at their facilities just outside of Kyiv.  The event was opened by Oceaniia leadership and U.S. Ambassador to Ukraine John Tefft. On May 26-27, visitors could test Alaskan seafood for themselves, and consumers’ comments were very positive.

Although Ukrainians have a tradition of consuming seafood, we highlighted the value and taste of “Wild, Natural, and Sustainable” Alaskan Pollack, Pink Salmon, Salmon Roe, and Flounder, a range of products that either have already or could well find a place on the Ukrainian table.

Alaska Seafood
Alaska Seafood

Alaska’s seafood industry expends considerable time and effort to not only promote their industry’s products in international markets, but to maintain their fishery industry in an environmentally sound and sustainable manner.  Ukraine’s consumers discovered high quality U.S. seafood in the mid 2000’s with U.S. salmon and salmon roe.  Since that time, exports of U.S. fish have grown. We know that in recent years Ukrainian consumers’ preferences are slowly migrating from traditional less expensive fish as disposable income has grown.  This has opened a new market segment for U.S. suppliers. Additional demand has come from the developing Ukrainian domestic processing industry and food service sector that consumes more and more fish.

In 2011, Ukraine’s import volume exceeded the best pre-crisis years.  Last year, trade in seafood with the United States increased by 49 percent.  In terms of trade volume, the United States became Ukraine’s second largest partner after Norway with $47 million of exports.  This trade volume is significant, and beneficial to Ukrainian retailers and processors.

Like all consumers of Alaska seafood products all over the world, Ukrainian consumers deserve a top quality product that will satisfy their need for natural and safe food – that is also delicious.  Working with Ukrainians to help them to learn about and ultimately enjoy these products is one of my favorite aspects of my work.

More information on Alaska Seafood can be found at: http://www.alaskaseafood.org

World Intellectual Property Day: Time to Better Protect Ukraine’s “Visionary Innovators”

Posted by: Alex Ryan, Economic Officer

World IP Day Theme: Visionary Innovators

World Intellectual Property Day was April 26 – a day better known in Ukraine as the anniversary of the Chornobyl nuclear disaster, but is also the anniversary of the founding of the World Intellectual Property Organization (WIPO) in 1967. We decided to mark World Intellectual Property Day one day later out of respect for the victims of Chornobyl.

This year’s theme for World Intellectual Property Day — “visionary innovators” — recognizes the special contributions made by artists, scientists, and other innovators all over the world. Visit the website of the WIPO for more information.

The protection of intellectual property rights (IPR) is a frequent topic of discussion during bilateral economic discussions between the United States and Ukraine, including at the annual U.S.-Ukraine Trade and Investment Council (TIC). At the 2010 TIC, the U.S. and Ukraine agreed to a wide-ranging Action Plan to improve the protection of IPR. Unfortunately, the Government of Ukraine has made minimal progress in implementing the components of the plan. This does not only hurt U.S. companies operating in Ukraine. The poor IPR environment in Ukraine equally hurts Ukrainian companies and Ukrainian innovators—its scientists and artists.

Why is a robust system of IPR protection important for Ukraine? Most basically, protecting IPR is essential to promote the creativity and ingenuity of researchers, scientists, artists, and engineers, who are at the forefront of technological developments and innovative solutions. If people don’t think they will be paid for their work, it takes away the motivation to create and innovate. Without protecting intellectual property, the Government of Ukraine risks stifling innovation before it begins. If Ukraine wants to become a modern economy, it must work to improve its protection of IPR. Continue reading “World Intellectual Property Day: Time to Better Protect Ukraine’s “Visionary Innovators””

Embassy Ukraine in Full Swing with the 2012 Season of Summer Work and Travel

By Summer Work and Travel Coordinators, Consular Section, U.S. Embassy Kyiv

On Thursday March 1st, colleagues in the Consular section at the U.S. Embassy in Kyiv hosted the second annual Summer Work and Travel (SWT) webchat. To view last year’s webchat, click here. To see this year’s webchat click here (Part 1), here (Part 2) and here (Part 3).

Since 1992, the U.S. Embassy has facilitated the travel of 60,000 Ukrainian students to participate in this unique program. The below chart indicates the number of Ukrainian students who applied to participate in the program since 2007:

The SWT program is a unique exchange visitor program. While on the program, SWT students have the opportunity to work, travel and participate in an enriching cultural exchange program. To participate in the program, every interested Ukrainian student must have a U.S. based sponsor, who will vet their jobs and facilitate their journey. Most Ukrainians work through local agencies that help match them with jobs and help them with their visa interview. Continue reading “Embassy Ukraine in Full Swing with the 2012 Season of Summer Work and Travel”

Science 4 Business Kick-Off at Kyiv Polytechnic Institute

Posted by: Gaia Self, Economic Analyst for Environment, Science, Technology and Health

U.S. Ambassador to Ukraine John Tefft spoke on February 10 at a kick-off event for the new Science 4 Business Initiative (S4B) at Kyiv Polytechnic Institute (KPI), which gave me the opportunity to participate. The event was organized by the Science and Technology Center in Ukraine (STCU), which is also the implementer of the project. The initiative, funded by the U.S. Department of Energy under the Global Initiative for Proliferation Prevention, helps Ukrainian institutes promote their science and technology internationally, becoming more self-reliant and aggressive in approaching international markets. S4B represents yet another success of the U.S.-Ukraine partnership in advancing science and technology and the commitment by the U.S. Government to actively support innovation in Ukraine.

Speakers for the event included Ambassador Tefft; incoming STCU Director, Ambassador Michael Einik; First Deputy Head of the State Agency for Science, Innovations and Informatization, Borys Grynyov; Director of the National Academy of Science’s Center of Intellectual Property and Technology Transfer, Yuri Kapytsia; and KPI Rector Mykhailo Zgurovskiy. The speakers noted the challenges that Ukraine faces in the field of technology commercialization and welcomed S4B as a critical response to the needs of Ukraine’s scientific community.

Ambassador Tefft discussed the importance of technology commercialization as a stimulator of economic growth, underscoring the key role that technology transfer holds in the U.S. economy – for both universities and tech companies. S4B is modeled after the organization of U.S. technical universities, where almost every institute has an office dedicated to technology commercialization. Inspired by this structure, which has proven successful in the U.S. and abroad over the years, S4B allows U.S. and Ukrainian partners to co-fund a Chief of Technology Commercialization Officer for one year (renewable for one additional year) in nine institutes. In the words of Ambassador Tefft, this “commitment to entrepreneurship and innovation will bring successes that will make them a true model for other institutions across Ukraine.”

It is common knowledge nowadays that Ukraine has a unique tradition of great scientists and great science; unfortunately, it is also widely recognized that Ukrainian research institutes face unique challenges in capitalizing on their own innovation potential. As several of the speakers put it, the lack of widespread knowledge, practices, and resources related to technology commercialization prevents Ukrainian science from being recognized internationally. Statistics put the current number of scientists in Ukraine at 140,000, but reveal that altogether they are responsible for only 0.31% of the country’s GDP. The already low levels of state financing, in addition, are dispersed across 38 different agencies, perpetuating a system where state support for R&D remains inefficient.

The U.S. and Ukrainian governments are working together to give Ukrainian science the opportunity to succeed internationally, and STCU has been a key enabler of this effort for several years. In this context, it is worth recalling the example brought up by Ambassador Tefft during his speech of a famous innovator, a former student at KPI, who succeeded in making his research not only known in the United States, but used around the world. Igor Sikorsky was an engineer born in Kyiv who immigrated in the United States and there commercialized his research to develop the first viable American helicopter in 1939. Not coincidentally, the Kyiv City Council renamed the street where the new U.S. Embassy compound is located after him – a great reminder of the opportunities that can emerge from the right synergies between our two countries in the scientific arena.