Now and after the war, the main challenge for Ukraine is the transformation of its economy, defense capability and security
Destroying our enterprises and infrastructure, demolishing housing estates, educational and scientific institutions, the enemy hoped to close for us the opportunity to be on a par with the developed economies of Europe and the world. That’s not going to happen! We will win the war – we will also win in the rebuilding of the country.
We and the international community are convinced of this. At the conference in Lugano, where Prime Minister of Ukraine Denys Shmyhal announced the $750 billion Recovery and Development Plan for Ukraine, representatives of more than 40 countries and about 20 international organizations identified the Recovery and Development Plan as the principal framework document that sets the focus of the recovery process.
It is a framework document, therefore, it should include specific programs, projects, initiatives locked to budgets, scientific and industrial facilities, geographic locations, and performers. All of Ukraine should become a great innovation project. Many teams and organizations understand the necessity and prospects, and work on future projects.
The scholars of NTUU “Igor Sikorsky Kyiv Polytechnic University” created an advanced project proposal for the Platform of post-war innovative transformation of Ukraine on the basis of the All-Ukrainian innovation ecosystem “Sikorsky Challenge Ukraine”.
We ask the Rector of the Kyiv Polytechnic, Academician of the National Academy of Sciences of Ukraine, academic advisor of SCU Michael ZGUROVSKY: What is this project proposal, why is the University ready to undertake high commitment as the initiator, and scientific and technical coordinator of the “Sikorsky Challenge Ukraine” innovation ecosystem.
— How did the idea come about? And why do you propose to unite powerful innovative forces with the University as the center, for the matter of critical importance for our country in future?
— Even now, and after the war, our country faces an extremely complicated and large-scale challenge. We understand that Ukraine will never be the same again. Heavy, mining, chemical industry, aviation complex, space industry enterprises were largely destroyed. It is impossible to restore the economy of previous decades, and for the most part there is no need: that economy was built in a different time, with different resources and using different technologies. In post-war Ukraine, the economy will be different. What will it be? First of all, it will be neither raw material, nor low-tech economy. Ukraine will not be able to maintain or protect itself if it remains the same, with only 3-5% of high-tech exports. After all, the world will not help us endlessly. We ourselves will have to maintain, protect and develop ourselves. For this, a different economy should be created on modern high-tech and security foundations.
And the fact that a university, in particular a technical one, becomes a center of the latest ideas, advanced technologies, an attractive force for innovators, is not something new in the world. We can cite many examples in various developed countries.
Our university has long been involved in the development of the innovative component in the state. The beginning of this participation was laid in 2006 by the Law of Ukraine on the “Kyiv Polytechnic Science Park”, which was initiated according to the models of the best innovative environments in North America, Europe, and Japan. Over the past 16 years, it has turned into a branched innovation environment that has covered more than 20 regions of Ukraine and formed its partner centers in the USA, Israel, China, Poland, Azerbaijan. Since 2012, the annual International Festival of Innovation Projects “Sikorsky Challenge” has been held at KPI. Since the first festival, inventors of Ukraine, together with investors, have brought to the markets more than 160 breakthrough startups with a significant social and economic effect. There are two research nanosatellites launched in 2013 and 2017, “Spectator” unmanned aerial vehicles, which are put into service and now protect the state, a mine water purification plant based on reverse osmosis technologies, and many others. This year, at the end of October the 11th festival will take place. It will be dedicated to the post-war innovative transformation of Ukraine.
In order to spread the culture of innovative entrepreneurship, since 2016, a network of startup schools has been created in other universities of the country under the auspices of the Sikorsky Challenge, and since 2019, a network of Innovation Clusters of cities and regions of our country has been developing. They are also created on the basis of regional universities, and local business, local government, banks, public organizations, that is, all concerned participants in the innovative development of the region, unite around them.
Before the war, the Sikorsky Challenge Ukraine innovation ecosystem united 25 universities from 20 regions of the country with their startup schools, 15 regional/city innovation clusters, dozens of enterprises, business associations and foundations. That is, the Sikorsky Challenge is already a national ecosystem that has covered most regions of the country, highly professional specialists are involved in it, and there is significant experience in developing successful projects, attracting investors, expanding the horizons of cooperation.
The war changed the geolocation of our partners: 6 universities were displaced, 5 regions/cities where innovation clusters were created, are located in hot spots or in temporarily occupied territory, but we all strive to join the work and contribute to the innovative transformation of the country.
— What are the main ideas laid down in the project proposal of the Platform for post-war innovative transformation of Ukraine? According to your concept, on what basis will the new economy be created?
— The project proposal considers the concept of innovative transformation of Ukraine to a new structure of the economy and its new qualitative characteristics, which will ensure a high level of welfare of the population (due to the creation of high-tech products with high added value, expansion of the export of these products in international labor cooperation, etc.).
At the same time, such an economy must guarantee a high level of national security. The war shows that it is not only the military who win on the battlefield, but also engineers and scientists with their developments in the field of electronics, information technology, systems engineering, new materials and many other high-tech spheres.
Therefore, defense and security (including aviation and space) are among the main areas of innovative transformation. We consider this sphere as innovative due to creation of new technology based on new critical knowledge and the latest, most promising inventions. We shall form the infrastructure of the post-war transformation on the basis of digitalization and cyber security, ecology and energy security, civil and military infrastructure, transport logistics, agricultural engineering and food security, medical engineering, human health, and a number of other areas… We shall build “cities of tomorrow”, we shall implement a new philosophy of quality and safety of human life.
We propose to consolidate the efforts and capabilities of all concerned national and foreign institutions on the basis of the “Sikorsky Challenge Ukraine” ecosystem to create a single platform: “Platform of post-war innovative transformation of Ukraine”.
While preparing for the 11th Sikorsky Challenge International Festival of Innovative Projects, we are now closely cooperating with state administration bodies – with the Office of the President of Ukraine, ministries, discussing the future concept of post-war transformation, the necessary organizational principles.
Close cooperation between science, business and the state is an indispensable condition for the implementation of such projects that are decisive for the state. As well as cooperation with Ukraine-friendly external world, partner countries. The world is ready to help us. The conference in Lugano confirmed it. Moreover, Ukraine should definitely be the key player in the transformation.
Certainly, a prerequisite is victory in the war. This is the principal thing. However, we must design the future of our country. In particular, scientific and educational centers of Ukraine should participate in this work. In fact, KPI tries to do it.
— Obviously, do you place a lot of hope in the final development of the concept on the Sikorsky Challenge International Festival in October?
— Indeed, the festival is always the event of the year. We discuss topic principles, focuses and specific innovative projects at it, with the participation of scientists, businessmen, representatives of the authorities from both Ukraine and friendly countries – the USA, Israel, Europe, Japan, even Australia. But this year, the festival will have an additional important mission, because a powerful brainstorming session will take place on the ways to transform Ukraine. Besides, specific innovative projects will be considered at the festival. Currently, 140 projects aimed at post-war transformation are registered on the Sikorsky Challenge website. We expect to have over 200 projects by October.
The expert commission will analyze them and the most promising ones will be presented to the festival participants and the International Jury. The participants, the investors and high-tech companies from Ukraine and abroad, will select the most interesting projects, they will give investments and these ptojects will be implemented with the participation of the central and local authorities.
I hope that after the festival, the contours of the post-war innovative transformation will already be formed, and we will be able to pass from an idea to a concrete meaningful content. At least, at the first stage
— How do you rate the program presented in Lugano?
— At the conceptual financial and economic level, the program in Lugano is a system-forming start-up program. It is about the amount of investment that Ukraine needs for post-war reconstruction, about the need for financial injections, the involvement of companies from different countries, the invitation of certain countries and certain cities to rebuild our cities or some facilities in Ukraine… But if we go further and ask ourselves of how and on what basis we shall rebuild the country, whether this reconstruction provides for restoration of the former infrastructure that was destroyed, or whether it should be transformation to a new country, with a new economy – instead of a raw and low-tech one, then it requires a more in-depth answer. This is the next stage, and it was not discussed in Lugano.
We do not think that when we had all these years high-tech exports accounted for only 3-5% (due to some IT products, space industry developments, mechanical engineering, etc.), and the rest — 95-97% — was low-tech exports with a small share of added value, then will it be possible to make the economy modern and competitive?
If the word “rebuild” means the restoration of what it was, then Ukraine has no chance in this conflict world. We must become a country with such an economy, where human capital and new critical knowledge will be invested in the creation of new products with high added value, and as a result, the country will develop its national defense and security.
I want to take the example of Israel, which has been in an unfriendly environment for more than 70 years. This country also started with a low-tech economy, with those kibbutzim, actually former Soviet collective farms. However, the country understood: they cannot survive with such an economy. One of the leaders of such a transformation was Kyivan Golda Meir, who, together with like-minded people, laid down a different concept of the country’s development. I think that Ukraine should follow a similar path.
Therefore, reconstruction is not what we think about. We are thinking about the transformation into a completely different Ukraine, which will have both its own defense and its own high-tech economy, and even the housing sector must not be rebuilt according to the panel principle, when an enemy missile hits one point of the structure and the whole structure collapses like a house of cards. In Israel, the missile hit at any point of the structure and deforms it, but the structure is not destroyed. The “smart” house is controlled by electronics and artificial intelligence, and the shelters in each house provide an opportunity for people to rest comfortably and not even interrupt online work in their companies. So, we shall build, obviously, like this.
— We understand that we have to make a jump over the chasm. We have to create a Ukrainian miracle, the contours of which are just beginning to emerge. Moreover, it is necessary to jump in such a way as to “jump over” many advanced countries. How shall we do it?
— First of all, we have to begin with international cooperation that is forming around us, and understand how and where we can integrate into this cooperation with dignity. We must not be worse, but perhaps be even better among equals. We must understand, with what Ukraine can be of interest to the developed world, and what it can give this world. Answering this question, we will come to the structure of our future economy. At least, to the priority system.
In 2016, our “Geoinformatics and Sustainable Development” World Data Center made a Foresight dedicated to the areas which can we be interesting to the external world in international labor cooperation? However, it was a different country and different situation. That Foresight is no longer adequate to the current situation, but the approach has not changed. At that time, we also took into account the requests of the external world in the then international labor cooperationin view of the natural and human resources of Ukraine and the main slowing factors that hold back its development. In addition, we saw 10 areas, which were the most interesting for the external world.
If, under those conditions, we began to strengthen each of them and offer our contribution to this international cooperation, we would be successful. At that time, we even developed 50 government actions in the form of various laws and government regulations in order to achieve this goal.
At that time, the agricultural sector took first place among the priorities, but not the low-tech sector, which worked according to the formula: “grown grain – sold grain”, but with a high degree of processing. In 2016, the Military Industry took second place. Having at that time a developed industrial infrastructure, Ukraine was able to expand the production and export of high-tech dual-purpose products. Ukraine was among the 10 largest arms exporting countries. Now the situation has changed. A new Foresight can show a new scheme of priorities. It is necessary to model, process big data, build new scenarios.
In third place at that time was high-tech mechanical engineering, which included both the aviation and space complex, engine engineering, as “Motor-Sich”.
IT was only in fourth place. Why? Because a model of using the cheap labor of Ukrainian programmers by large Western IT companies is wrong for IT as a sector of the economy. Ukraine should have large data centers, a powerful supercomputer-computing network, and other powerful tools for creating its own high-level products. IT must not be based on outsourcing, when a foreign company hires a Ukrainian programmer for a small fee, who performs some part of the work of the client company, which is the owner of the final product. We must reach the level of own powerful products, like Diia, a large system created with the participation of the Ministry of Digital Transformation.
This is an example of transformation, movement towards a digital country.
Clusters related to transit through Ukraine are important, as well. Our geographical location allows us to use it for making money, especially due to modern means of communications. is both aviation and railway, which must be standardized with the European one. However, now transit between East and West is impossible under such circumstances.
Therefore, answering the question of what we might be interested in, I would say: we must apply to the external developed world, find our place in its demands, direct our national policy to the development of the spheres that the external world needs, not on the raw material but on the high-tech level, which requires the involvement of human intellectual capital. And, therefore, we must create products with a large share of new, critical knowledge and added value in those segments in which we are interesting to the external world.
— How much time do we give ourselves for the first stage of transformation
— First of all, we must come to peace, to victory. Then we shall channel all our human and financial resources to transformation, to internal reconstruction, and we shall talk about time frames. If peace would come and the reconstruction program, which was also announced in Lugano, would begin to be implemented, and those investments would be attracted – according to various estimates from 700-800 billion up to 1 trillion dollars, and we would attract partners to develop various segments of our economy, then, I think, the first stage would take several years to make Ukraine a self-sufficient country.
I would give the example of Poland. In general, about 10 years were enough for them to make the country, which was quite weak in the industrial sense, stand next to the developed European states. However, based on the Polish experience, we will need to move faster.
At that time, the Poles integrated very intelligently into international labor cooperation. The USA and the EU helped them. Actually, this is the same program that we need. Ten years were enough for them to make this leap. But our conditions give us 4-5 years to reach a state of self-sufficiency. And in 10 or even less years, we would like to become equal among developed countries.
Communicated by Larysa OSTROLUTSKA
