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Following the Israeli example: Can Ukraine become a leading international tech-hub?

A startup nation, Israel knows no bounds in business experience-sharing. Just in recent years, it promoted technological innovations in the UK, launched a partnership accelerator in Germany and signed a tech park cooperation deal in Lithuania. The CEO of AllStars-IT reviews what Ukraine can learn from this hotbed of innovation.

Solomon Amar

Improve the Market

Israel is well known for providing attractive tax incentives to foreign venture investments. Therefore, the number of startups there is constantly increasing. If one decides to invest in a Ukrainian business, he/she is likely to face complex taxation and banking systems. So, what explains the difference? The answer lies in unequal government regulations.

They influence not only industry economics, but also the business environment. Successful entrepreneurs stay in Israel and share their knowledge/resources with the local community. They don’t want to leave the country looking for better living conditions as most of the Ukrainian developers do.

Another thing is that, in Israel, you can find a much higher percentage of entrepreneurs who don’t look at the “income today” but are happy to take on the risk of a fail for a better “future income.” In Ukraine, we see a lower percentage of risk taking. It can be attributed to the socio-economic environment, which does not encourage taking risks.

There are also key differences in the product development approach between these two nations. While the Israeli market is focused on interior product development, 90% of the Ukrainian industry is working via outsourcing.

Arrange the Accents

Despite some difficulties within the Ukrainian market, there are tech fields that boom alongside the global trends. Thus, we can find highly skilled Ukrainian experts in the pure software development area, such as JAVA/C#/RoR; front and back end developers, in Automation Python/Selenium; and in the mobile vertical iOS/AOS. The fields that lag a bit behind in the business are Devops/BigData/BI/.

What can Ukraine offer to the global IT industry? Affordable prices for human resources and living costs spring to mind. Let’s emphasize the convenient time zone for European and Israeli customers. Foreign clients will appreciate a good infrastructure and relatively easy access to the country. I’ve noticed excellent problem-solving skills of IT professionals, their positive spirit and passion for technology.

Business meeting

Implement Incentives

The Ukrainian government is expected to simplify their tax system and visa applications for IT companies. They should also spend more on technological research and development. In comparison, Israel invests approximately 4.4% of its GDP in industry progress. Need we recall the creation and support of effective learning programs for young folks? Different obstacles that Ukraine experiences now (such as being under attack and lacking resources) should stimulate the country to be more resourceful, to do more with less and to innovate.

Ukrainian business should create a vibrant ecosystem in which companies share their expertise and produce real IT success stories. Events such as forums and conferences may influence a company’s consolidation and cluster development.

There’s a great mutual collaboration opportunity among the Israeli entrepreneurs, who have experience in risk management and money raising, and the great talents in Ukraine, who are less experienced in the business side of establishing a startup.

Sources: Ain.ua

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