Category: European Union

Source: USAID

ADMINISTRATOR SAMANTHA POWER: I just met with a great group of Ukrainians here at the IT Cluster. This is an innovation hub supported by the Government of Ukraine and by USAID. I have learned from Ukrainian entrepreneurs, and I’ll just give you one example of the kinds of innovations that are happening. 

Knopka is a member of the IT Cluster here that is revolutionizing medical alert systems. Traditionally, medical alert systems are not wireless. This matters for Ukraine because they would not work during power outages. Power outages have been a real issue for hospitals during the war. So, one Ukrainian entrepreneur here developed a system called “Knopka”. If anything abnormal happens with a patient’s vital signs or the patient indicates that they need care, Knopka sends an alert out to doctors’ and nurses’ phones using cellular data. As long as their phones have some charge left. These doctors and nurses know exactly where to go and who to help us, even when there is no power during the blackout. Knopka technology is 30 percent cheaper than other medical alert systems. While those other systems can often take weeks or even months to install, Knopke’s technology can be installed in just one day. 

Supported by USAID, Knopka is growing fast. It has already been installed in 30 hospitals in Ukraine and one in Poland, and now Knopka is in talks with hospitals and clinics in Canada and the United States. Those hospitals and clinics are considering acquiring its system, too. Just in the past six months, Knopka’s workforce has expanded from 20 to 35 employees. Knopka’s Founder and CEO said, “Despite the challenges of war, we demonstrate Ukraine’s capacity for innovation and the talent behind it.” 

So, it is this capacity for innovation that has driven Ukraine’s ability to retain business despite being more than two and a half years into Putin’s brutal invasion. In the tech sector alone, 95 percent of Ukraine’s 5,000 tech companies, including household names like Grammarly and GitLab, have retained their national and global contracts, together powering a full 12 percent of Ukraine’s exports. Since 2022, indeed Ukraine’s tech sector has grown seven percent, contributing $14 billion to Ukraine’s economy.  

Ukraine’s business leaders in the tech sector and beyond it, are harnessing their creativity and their resilience to lead the country into the future and at USAID, we have been privileged to do what we can to support that effort. Since 2022, we have directly deployed more than $260 million to support businesses in Ukraine, from relocating and restoring the operations of companies on the front lines, to running reskilling programs to train Ukrainians in high demand trades like construction and transportation, to increasing access for businesses and for startups to affordable financing. 

This support has itself unlocked $232 million in new investments to Ukrainian companies. This helps them expand operations, hire Ukrainians, and this investment allows them to provide much needed tax revenue to support Ukraine’s defense.

At the same time, we are working closely with our partners in the Ukrainian government to help them shape the business environment. International businesses describe for us the policy and regulatory reforms that they need to be convinced to invest in Ukraine. So, we are working closely with our partners in the Ukrainian government to improve transparency, to reduce opportunities for self-dealing, and to make the judiciary more independent. All of these are critical steps to building confidence that contracts will be honored and investment regulations will be enforced. 

And finally, we are thrilled to be able to support Ukraine’s ambition to become a global leader in e-governance. As all of you Ukrainians here well know, the revolutionary Diia app that we have supported for years makes it possible for Ukrainians to access all kinds of services. It allows Ukrainian entrepreneurs to register companies, apply for permits, begin procurement processes, and more. By registering on the Diia City platform, Ukrainian and international companies alike, can access benefits that incentivize them to do business in Ukraine – benefits like reduced taxation and legal and financing support. In the first quarter of this year alone, businesses registered on Diia’s City have contributed over four billion Hryvni tax revenue to the Government of Ukraine, that is the equivalent of nearly $100 million. And, these are taxes, of course, that can be used to rebuild schools, to heat homes in winter and to fuel Ukraine’s defense.

Businesses, like the ones I met with today, are working to build a future where the ingenuity of the Ukrainian people drives progress. Driving that progress not only here in Ukraine, but in places all around the world that will continue to benefit from the products, services, and ideas developed here. 

Thank you so much, and I look forward to your questions. 

QUESTION (via translation): How much monetary equivalent has the U.S. government financed in technology in Ukraine and especially western Ukraine?

ADMINISTRATOR POWER: We will have to get back to you with the precise figure, especially with the geographic breakdown that you are looking for. But, I am sure someone on the team can provide that. 

QUESTION (via translation): If you think about long term supporting perspective, where does [the] U.S. government see Ukraine in [the] future? Is it technological? Is it [an] agrarian country? Is it a country of construction?  

ADMINISTRATOR POWER: Thank you for that question. As someone who works at an Agency that addresses food insecurity all around the world, I know firsthand the terrible harm that Putin caused by preventing Ukrainian agricultural exports from leaving Ukraine. I saw kids in sub-Saharan Africa who were hungrier because the food prices went up so much because Ukrainian agricultural exports were blocked by Putin’s forces. So, we are in awe of Ukraine’s farmers and its innovators who have found a way, despite the war, to increase agricultural exports now basically to their pre-war levels. And, we recognize that Ukraine’s farmers, as is evidenced by Ukraine’s flag, are foundational to this country’s economy. Ukraine’s agriculture is also a huge part of Ukraine’s identity, and it is a huge part of keeping people fed around the world. 

But, what is really exciting about what we see in the Lviv IT Cluster is the diversification of Ukraine’s economy. And, seeing the steady growth of IT services as exports in this country, gives us, I think, an indication of where the future can take Ukraine. There are apparently 307,000 tech professionals now in Ukraine, and that is a seven percent increase from last year. Ukraine is becoming famous all around the world for the Diia app. Many citizens in other countries who see the Diia app are very jealous of Ukrainians. The simplicity and the government accountability that makes life better and easier for citizens is something many countries would wish to have. The more people learn in Silicon Valley and elsewhere about the kind of innovation that is happening at a place like this, the more we will see investment and increased exports in IT services.

We are, of course, also seeing a lot of innovation in other manufacturing sectors. Because of Russia’s brutal attacks, Ukraine has had to innovate in the defense sector. Even drones, which are being manufactured now in Ukraine, have broad civilian appeal for farmers and other sectors around the world. Ukraine is a home to many critical minerals that provides economic opportunity in the future. And, of course, as Ukraine shifts its energy economy to renewables, that will be something, I’m sure, of great interest outside this country.

My point is not to specify, again, any particular trajectory for Ukraine. It is simply to take note of the incredible innovation and resources that will power Ukraine’s economy in the future. And, of course, it is young people that will drive even more innovation and more ideas of what can come from Ukraine beyond even what I have mentioned today. When I think of all of the innovation that has occurred in Ukraine, just since the full-scale invasion, I marvel at imagining what this country and the Ukrainian people can do in peacetime. And, now Ukraine is more famous than it was before Putin’s full-scale invasion, for the resilience, but also the creativity and innovation of its people. 

QUESTION: Ms. Power, I’m very thankful for your generous support that USAID has been giving to both private sector, state institutions, and civil society in Ukraine for years. But, I wanted to ask – I know that from my own feelings – I see that USAID is an institution that is caring [for] both people. And, besides funding, both in trends and investments, we do need people, and we do understand that Ukraine, for boosting its innovations and its economy, needs [to] bring people back. We have six to seven million abroad, we have people dying on the front line, and we have a very low birth rate. Is it something that is in your concern, and that USAID would think about, and would think of some special projects to help, somehow, help this situation.

ADMINISTRATOR POWER: Well, this is something, actually, I discussed yesterday with President Zelenskyy. It is absolutely critical for Ukraine’s future that its population here is thriving. It is crucial, for example, that the tech professionals who are being groomed here, see themselves as having a full future here where they don’t feel they need to move to Silicon Valley. 

What USAID is doing is looking at many of the reasons that Ukrainians feel compelled to leave. So, one of the things I discussed with the President is the safety of schools. USAID has invested in refurbishing and rendering more secure around 10,000 bunkers in schools. In Kharkiv, we’ve actually been involved in building a school that is entirely underground because of the situation there. So, education is one example where, as we think about where to make our investments, we do so thinking about a parent who wants nothing more in the world than to keep their children safe. 

The other core dimension of our work that is designed, of course, to keep people here or to draw people back, is work on helping the economy grow. When people cannot find work, they go to try to find work somewhere else. So, being very specific about which programs can help create jobs for Ukrainians is another example of this kind of work. 

But, in the future, when peace comes back to Ukraine, there will be tremendous opportunities for jobs and, of course, for people to experience the safety that they once knew. And, that is when we and the European Union and, of course, the government and the people here will need to be very intentional on how we advertise all the opportunities that will exist in what will then be a stronger economy and a stronger democracy.

This is why the reforms, tackling corruption, strengthening the judiciary, and making the regulatory environment for business more attractive, none of those reforms can wait. And, if that reform effort can continue to progress, it will make Ukraine, on the other side of war, a place that businesses flock to, even more than we are able to get them to come now.

The very last thing I would say is the obvious, which is a huge part of ensuring or increasing the likelihood that people stay in Ukraine is that the 50-country coalition continues to support Ukraine’s defense. And, that is why the very significant defense package that President Biden just announced is an important part of the answer to your question. More air defense means that citizens can feel safer and that they are less likely to leave the country. That is why we, in the United States, understand that attracting people to stay in Ukraine is a whole-of-U.S.-government enterprise. 

Thank you.

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