MA Thesis

Survival of Start-Ups − Case of Ukraine



Published in:

Kyiv School of Economics


survival of start-ups

Nowadays, the issue of innovative development is quite acute in Ukraine. It is a key for the technological gap reducing, creating competitive enterprises and improving living standards. Young generations of Ukrainian citizen hope for higher trancparency, more digitalization and lower corruption. Innovation, especially driven by the IT sector can substantially support this needed development by innovations and their productization. Startups play a vital role to support the innovative development. Aside of large corporations, especially startups with their flexibility and agility can find and foster new ideas and innovations. In large corporations innovations are often management initiatives with a marketing centered approach. For startups, anyhow, innovation is, in most of the cases, the only way to develop and place new successful products and services. Nevertheless, several factors limit the dynamics of innovation processes in Ukraine. The first one is limited domestic capital market and high cost of domesctic funding sources. Second one is the lack of financial resources for the IT sector development, despite the fact, that this sector is one of the drivers of modern Ukraine digital transformation. The local environment in Ukraine in terms of financial resources and the availability for startups and innovations is still not developed that high as in Europe or US. The support for startups from government is provided weakly. There are less financial tools from the side of the government to support and foster direct innovations through startups. During last years a seed of ecosystem for startups is growing and first startups reach Unicorn valuations, which is considered as a great success. Nevertheless, this ecosystem is quite undeveloped and still requires longer time to be a good foundation in terms of financial resource support for Ukrainian startups.