Military Operations in Ukraine Have Had Some Surprisingly Positive Side Effects for Modern Businesses

emerging europe ukraine

Read the Outlook on Ukraine special report

.

The Russian military operation began, in Crimea, on the 20th of February, 2014. A month later, after the questionable referendum on self-determination, Vladimir Putin announced the annexation of Crimea. Demonstrations by pro-Russian and anti-government groups took place in the Donetsk (in the photo) and Luhansk oblasts (collectively the Donbas) began at the beginning of March. Shelling of the airport and the toughest military operations began on 26 May.

It is estimated that about 1.5 million people have fled the Donbas area, since the beginning of the military conflict. In Donetsk and Luhansk alone, the manufacturing sector has contracted by 32 and 42 per cent respectively. It is not clear how many other businesses have been closed down or forced to move elsewhere.

Immediate effect

Artem Gerashchenkov, CEO at Gekos, says his company started building their business in Donetsk. We used to have quite a lot of employees — up to 200 staff members. However, after the beginning of the war we left Donetsk immediately. Some of our people were evacuated to Belarus, and some to Bulgaria. Today, we have offices in Kyiv, Rovno in western Ukraine, Vilnius, Lisbon, Saratov, Moscow and Los Angeles. We are a start-up studio, an outsourcing company and one that offers business strategy and marketing investment.”

“In the summer of 2014, after the outbreak of hostilities in eastern Ukraine and, in particular, in Donetsk, Lime Systems was relocated to Kyiv within a short period of time and continued to operate whilst managing to retain almost all of its employees. This move was not easy in financial terms, as people had to leave their homes, and psychologically it was hard as well,” says Sergey Gladkov, General Director at Lime Systems. His company was founded in Donetsk, in 1993 as the IT department of a local bank and they continue to work within the banking sector with their main product being used by 25 per cent of Ukrainian banks.

“I am in Spain, at the moment, at one of our branches and we have also opened offices in Dnipro, Minsk and Grodno, but our company was initially based in Donetsk before these events occurred. The first group of people sent to Dnipro consisted of 20 people. By the end of May, the shelling had started in Donetsk and a developer said to me “I will not go anywhere, I’ll keep working here.” When he got home he saw that his house had been hit by a shell. The next day the problem with our proposal to move to Dnipro had disappeared. We gained more freedom after leaving Donetsk, and we were able to open offices all over the world,” says Vyacheslav Dodatko, CEO at Anadea, which was set up in 1999. Since its beginnings, the company has worked mainly for European and American clients.

Mr Gerashchenkov says they lost their Ukrainian and Russian clients immediately. “We have also lost many staff members. Some of them left because of family reasons. Some people went abroad, starting with Slovakia and ending up in Uzbekistan. Some stayed in Donetsk and refused to work anymore. Despite the fact that we have closed our offices in Donetsk, we still continue working with a few employees remotely,” he adds.

Finding a way out

Mr Dodatko’s priority was to save the business no matter what and a sharp fall in confidence and trust in Ukrainian companies was something she could not allow to happen. “Customers thought that the service provisioning from these companies could come to an end at any time. So being involved in their businesses seems dangerous and risky. I had to take extreme measures such as going to the window whilst using my camera to prove to our clients that everything was alright at our new location,” he says.

“At the moment, it is impossible to conduct any legal business in the territory of eastern Ukraine, as the area is beyond the control of Ukraine and the military actions are still not banned. However, in other areas (Dnipro, Kharkov, and so on), that are close to the Donetsk and Lugansk regions, business is still actively developing, despite the fact that it might be rather complicated and dangerous being so close to border areas,” says Mr Gladkov.

When asked about whether his company needed help, Mr Dodatko gets upset. “I do not understand this kind of humanitarian view of the people being affected and looking for help. Because this is definitely not about a company. If it is alive, it will survive under any circumstances. One of the main features of any company is its ability to ensure its own security or safety and we are that kind of company,” he says.

“I do not think we need any help either,” Mr Gerashchenkov adds. “As a matter of principle we are a stable company with a strong background and profound experience. We have the ability to make sales and other business processes. We know how to take external factors into account. We have a built a set of regulations taking any actions into account,” says Mr Gerashchenkov.

Sound growth ahead

Mr Gladkov says that during this intense period, the company has even strengthened its position in the market. “Strangely enough, we were able to find some positive aspects in the current situation. The outbreak of military aggression and the need for an immediate relocation to Kyiv have united the company team. These days we are trying our best to be more attentive and patient towards one another. On top of that, we have become more resistant to any new difficulties and challenges, because there is nothing that can be compared to the problems that we have already been through,” he adds.

“Ukraine is a country with insanely talented and incredibly hard-working people,” Mr Gerashchenkov says. “The population can be their most hardworking when they get paid properly for the work that they do and when they see the future as a bright perspective. Our people can boast of entrepreneurial and professional talent and that unlimited,” he adds.

“We often have to face challenges such as working in a team of diverse developers from different countries, for example, from the US. The American development team did not manage to meet the challenge, so the Ukrainian team joined the project and we managed to do it. It is notable that the qualifications and experience of our people make it possible to compete with very advanced developers,” says Mr Dodatko.

“After Maidan a wave of highly educated young people rose up; people who do not want to live in a corrupt state, and who are a new generation with new views on life in all its spheres,” Mr Gladkov says. “It is a country with people who want a bright future and democracy. We have extremely intelligent and positive people with an active lifestyle; people who are not afraid of difficulties anymore. They are people who are encouraging increasingly Western principles, values and a way of life,” he adds.

RELATED ARTICLES

See the New Ukraine and Benefit From the Best by Partnering or Investing in IT

Engineer proceeding to data recovery from computer

Between the East and West, Geographically and Politically

The Ukrainian Banking Sector Looks Set to Regenerate New Growth

European Volatility Makes Economic Development Slower for Ukraine

Legal Reforms are Improving the Existing Problematic Situation in the Ukrainian Agro Market

ukraine agriculture

Changes Are Needed in Ukraine’s Economy and Business to Catch up with CEE Growth

Lviv Is the Pearl and the Soul of Ukraine

A Very Good Prospect for Future Biogas Development

Thinking Big; Working Hard; Delivering Value to Clients and Building Relationships

quartsoft emerging europe outsourcing

History as Destiny? Institutional Erosion in Ukraine and Poland

Europe’s Breadbasket Offers Opportunities for Investment and Diversification

The Stalled Conflict in Ukraine Will be Formalised

‘Viking’ is Yet Another Way to Annoy Ukraine

A Roadmap for Reform in Ukraine and a Promise of EU Support

Western Ukraine Could Be an Entry Point into the Country

Ukraine’s Gas Industry Risks Stagnation Without Investment

Sirin Software — A Ukrainian Firm Conquering Global Markets

Energy Tariff Reform in Ukraine: Estimated Effects and Policy Options

Ukraine’s Talented Students Are Well Served by Its Diversified Business Relevant Education

ukraine IT

Danish companies Support and Assist Ukraine’s Economic Transition

President of Ukraine Petro Poroshenko and Prime Minister of the Kingdom of Denmark Lars Lokke Rasmussen during a meeting in Kiev Ukraine

Ukraine’s NIX Solutions Expands to Israel and Beyond

Maidan Three Years On—What Has Changed for Ukraine?

Poland’s Business Experience Makes it a Good Neighbour to Ukraine

Anti-corruption Efforts Are the Starting Point for Further Reforms

Ukraine’s Economy in 2017 — When Dreams of Growth Meet Geopolitical Reality

The Innovation District IT Park Will Help Lviv Become CEE’s IT Hub

IT park lviv ukraine

Longstanding Early Investors Say Ukraine Offers Foreign Manufacturers Great Prospects

ukraine manufacturing

Finalising the DCFTA is Expected to Bring Multiple Benefits to Ukraine

FocusEconomics: Predicting an Increase for the Ukrainian Economy

Leszek Balcerowicz: Ukraine Can Learn from Poland’s Economic History

Ukraine Outsourcing’s Value is Now in its Technological Expertise and Reliability

Ukraine’s Pro-change Atmosphere Says “Welcome!”

lviv emerging europe

Ukraine’s Banking Sector Reconstruction Brings Asset Sales and Opportunities in Equal Measure

Gavel and Ukrainian hryvnias on a wooden table

Ukrainian Start-up Projects Recognised in the International Market but Still More Investors Needed

Startup Diversity Teamwork Brainstorming Meeting Concept

Past Troubles Belie the Opportunities for Investment

Governmental Support is Vital to Fight Corruption

Denmark in Ukraine: Fostering a Better Business Climate for Both Sides

Steps to Stability Marred by a Failure to Attract FDI

Ukrainian Venture Investment Market Is Immature and Needs Growth

Ukraine and Canada: A History of Settlement and a Future for Investment

Changes Are Making Ukrainian Banking More Aligned with International Standards

Naftogaz: A Good Start Has Slowed But Optimism Remains High

Closeup of pressure meter on natural gas pipeline with people on the background

Business Moving Forward with Cautious Optimism — Can Investors Win the Confidence Game?

Ukraine’s Government Declares Ambitious Privatisation Targets

Office Space Remains Available in Kyiv

The Eurovision Song Contest Is a Perfect Showcase for Ukraine’s Talent and Warmth

Ukrainian Agribusiness — a Jewel in a Crown

Wheat ukraine agriculture ebrd

The Dilemmas of Ukraine’s Economic Policy

Ukraine Continues to Make Waves as an IT Outsourcing Destination

The Political Economy of Independent Ukraine: Late Starts, False Starts, and Last Chance?

SMEs Should Play an Important Role in the Economy and Export Development

From a Small Family Firm to a Top 100 Global Outsourcing Company

Ukraine’s Reputation for Cheap Labour May Not Ring True in the Long-term

Falling into Old Ways in 2017? Ukraine’s Struggle for Functioning Economic Institutions

Protecting Intellectual Property to Encourage Business Confidence

Kyiv’s Mayor Is Used to Fighting to Attract Attention and Interest

KIEV UKRAINE - SEPTEMBER 8 2016: The facade of Kievrada the City Council located in Khreshchatyk Avenue on September 8 in Kiev.

There Is a Move Towards Change in Ukraine

The Human Factor is Boosting Ukraine’s Promising IT Export Sector

Start Making Connections for the Opportunities Ukraine is Currently Offering

Kharkiv region Ukraine - July 29 2016: Combine harvests wheat on a field in Kharkiv region Ukraine on July 29 2016

Ukraine Is Offering Europe Unique Combat and Technological Experience

Ukraine Returns to the Fold

LVOV UKRAINE - APRIL 25: Workers masons laid paving stones in the repair of the main street on April 25 2013 in Lviv Ukraine

Ukraine Is Energy Independent in Some Sectors and Awaiting Change in Others

Ukraine’s Tech Sector Is Booming but Needs Awareness and Confidence

ukraine tech emerging europe

Leave a Reply

Your email address will not be published. Required fields are marked *