Opening your eyes to Ukraine

I am in the international terminal at Kievs airport. Interestingly, despite living in Europe for 25 years, this is my first trip to Ukraine. I was moving to Munich in 1986 just as Chernobyls radioactive dust was settling in Bavaria. So maybe that played a role in my not making it over sooner. In my mind, I had always placed the Ukraine very, very, very eastward. You know, not only way east, butheyit was part of the Soviet Union. I know. The USSR imploded 20 years ago. But, bear in mind, I was born just a few months before the Cuban missile crisis and grew up in the States during the most intense period of the cold war. Perhaps that tainted my perspective a bit as well ;-)

In fact, the Ukraine is actually quite close - only 1¾ hours away. Its actually a shorter flight for me to Kiev than to Madrid, and essentially the same as one to Stockholm or Oslo.

Now that I made it here, the trip has been quite an eye-opener. The people and the atmosphere are very "European". It feels like dozens of other cities Ive visited throughout Europe. Its safe to walk around (which you certainly cant say for all of Paris). Everyone is busy. Sidewalks are clean. Cars are well kept. Streets are in better condition than in many US cities and certainly better than virtually all of India. As Friday was drawing to a close, with the weather as good as it gets, people were calling it the weekend and hanging out in cafes enjoying their cappuccinos.

All that doesnt mean its perfect either. There are serious problems here. Two years ago, Ukraine was listed by Forbes as one of the 20 most corrupt nations in the world, tied with other notorious states such as Pakistan and Nicaragua. And just last week, the same magazine ranked Ukraines economy as the worlds 4th worst, citing U.S. State Department reports that blame its "complex laws and regulations, poor corporate governance, weak enforcement of contract law by courts, and particularly corruption" as the root causes of Ukraine's sluggish economy.

On the other hand, "Ukraine has rich farmland and generous mineral resources and could become a leading European economy," wrote Forbes' Daniel Fisher in his article . My own feet on the ground report confirms the assessment. You see and meet motivated, hard working people who wish to leverage Ukraines wealth in natural resources. Its population of 50 million is also well educated. And many of the university graduates are going into IT to supply the rapidly growing R&D outsourcing industry (over 25% p.a.). Obviously, Ukraine will not grow an industry as large as Indias. However, as a portion of its GDP, it can become easily as important. Ukrainians are serving an important segment of the ever expanding demand for outsourcing, fulfilling the western European need for near shore R&D services. The short distance, the minimal time difference and a European mentality enable Ukrainian outsourcers to provide resources that can be integrated within agile cross-European development teams and interface with their customers daily and in real time. Certain Ukrainian outsourcers are so adept at best practices in programming such as agile and scrum, they are now training western European banks in these methods. It is the buildup of these kinds of skills, combined with the motivation and energy I sensed amongst the people, that gives me the confidence to believe Ukraine can eventually overcome its challenges and move from the bottom of Fishers list to closer to the top.

Posted by , Managing Director on 15 July 2011
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