Ukraine’s rapidly developing tech scene saw global giant Google, mostly known for its popular search engine, establish an office in Kyiv in 2006. Today, Google’s country manager for Ukraine, Dmytro Sholomko, says that behemoths like his employer are now looking for stability in Ukraine in order to develop.
Sholomko hopes for support from Ukraine’s government to tech businesses. Tax benefits are not needed, he said, but providing discounts on rent or utilities for companies that make innovative products would be helpful.
While many would laugh derisively at the prospect of one of the world’s most profitable companies, with $14.4 billion in net profit last year, seeking government subsidies, Sholomko was deadly serious about how information technology companies should get special treatment.
“I heard a representative of the government addressing IT businesses ‘if you don’t like our rules, you can get your stuff and leave the country.’ I don’t think this is the right way to approach IT businesses,” Sholomko comments. “They will actually get their stuff and leave the country to pay taxes and contribute to the GDP and effective economy somewhere else.”
Dmytro Sholomko, head of Google’s business in Ukraine, says stability is key for tech investors in the Ukrainian market. Photo credit: Volodymyr Petrov.
Appointed to his position in 2011, Sholomko says raising the quality of the tech education will improve Ukraine’s attractiveness. A graduate of the Kyiv Polytechnic Institute, the Google Ukraine manager admits that local universities lack the modern technical base to catch up with the foreign competitors, while students also should have more freedom.
“If we talk about the quality of Ukrainian programmers, I cannot rate them objectively inside of Google, but they form one of the biggest European diasporas among the Google employees,” Sholomko says. “Among European programmers, two nations that are the most numerous in Google globally are Ukrainians and Romanians.”
“People who were leaving Ukraine for Google abroad now work as Google’s search engine managers and search engine is the core of Google’s business,” he adds.
All good startups that evolve on the Ukrainian market eventually leave the country, because it is easier to do business abroad, Sholomko explains. “A developed market, access to money, stability, rule of law and such needed things as a free flow of funds can be also found abroad. We don’t have it here.”
An industry emerging from scratch
However, he thinks the Ukrainian tech market will be growing. Six years ago, there were no Ukrainian companies developing their own products; mainly everyone was just working in the outsourcing sector.
Among the brightest examples of independent companies in Ukraine, Sholomko names MacPaw, a developer of cleaning software for Macs; Grammarly, an online service for checking grammar; and Petcube, maker of devices for playing and watching pets distantly.
While MacPaw still has an office in Ukraine, Grammarly moved to California long time ago and Petcube will likely move to the U.S. too.
Google, whose market capitalization is $375 billion, helps to foster the Ukrainian startup community development by mentoring startups in promotion, marketing and sales.
The tech giant employs 20 people in Kyiv, which is a tiny fraction of company’s 47,000 employers globally.
Google Ukraine can pick startups to a so-called virtual accelerator. The ability to grow and reach popularity on the foreign markets is seen as a crucial criteria. Startups that qualify can receive help from Google, mostly useful connections.
“We can teach them anything, except coding. Coding and product management is something that they already know how to do,” Sholomko says.
Many startups, Sholomko admits, think they have a good product that will be selling without any efforts. But this perception is wrong. “For many startups we are helpful since we show them how to promote themselves.”
Startups are monitored through the Ukrainian business accelerators and investment funds. “It’s enough to speak to people from the tech community couple of times a month to understand what new projects are coming up and whom we can help,” Sholomko explains.
This story is part of a joint series on international high tech businesses in Ukraine by The Kyiv Post and Ukraine Digital News.