Global technology players with offices in Ukraine are as disappointed as anyone with the halting pace of Ukraine’s post-revolutionary changes.
“Everybody observes that there is a certain, let’s say, decline in the speed of reforms… We see that the reforms that were promised year and a half ago are not taking place as fast as we would like,” says Penko Dinev, IBM Ukraine general manager.
Dinev has been IBM Ukraine general manager since 2010. Prior to that he served on different management positions at IBM Russia for five years.
The Russian IT market is obviously larger, but the sector of offshore programming is developing in Ukraine at a faster pace, although both markets lag behind Western ones. In Bulgaria, where Dinev is from, the IT market is even smaller than the Ukrainian one.
Aside from Russia’s war, tech players in Ukraine are troubled by the lack of political stability, financial unpredictability and poor implementation of law, specifically, on intellectual property rights.
“The investors are very much afraid of the governmental decisions that are not predictable or made out of a sudden, and they have no way to escape them. This creates confusion, this creates uncertainty for the investors,” Dinev says.
“Legislation is good in Ukraine, it’s not that bad, it’s quite modern and European,” he continues. “The issue is the implementation. I’m not talking just about the fact that Ukraine has a lot of issues with pirated software, hackers and this kind of thing… But the implementation of the intellectual property rights law is critical in order to make sure that investors in R&D (research and development) will feel comfortable to invest in this country.”
IBM has over 200 Ukrainian employees concentrating on sales mostly. The company assists different state agencies like the National Bank of Ukraine on issues of IT security.
Before the EuroMaidan Revolution, Ukraine’s IBM considered the possibility of opening an office for doing research and development in Ukraine too, but plans soon vanished as the situation escalated.
Russia’s war and annexation of Crimea forced the company to relocate employees and their families. “We understand that the human capital is very important… Although they are costly measures, we are taking them,” says Dinev.
Several employees of IBM have been drafted for the war, but Dinev thinks “the government has to do it in a little bit more different way. Because taking into the army the specialists with the great skills in high-tech areas is not a very good decision.”
Dinev is still optimistic about launching IBM’s R&D in Ukraine, but now it is “put on hold” and will not be re-activated unless the situation improves. “We know what to do, we know what kind of approach to use. But the situation at the moment does not allow us to start this,” says Dinev. The crisis for the Ukrainian economy will last another three to four years, Dinev predicts.
But when it lifts, there’s one advantage that Ukraine won’t lose – its well-educated people from an education system that produces high-quality specialists in other spheres beyond IT.
This interview taken by Bozhena Sheremeta of The Kyiv Post is part of a series on Ukrainian tech leaders published jointly by The Kyiv Post and Ukraine Digital News.