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The Babel tower: Ukrainian investors are not interested in science

Author : Nina Hlushchenko

12:47, 15 November 2017
The Babel tower: Ukrainian investors are not interested in science

Author : Nina Hlushchenko

Ukraine has a good fundamental scientific base, in particular, in space, mathematical, and other fields

12:47, 15 November 2017

Read the original text at 112.ua.

zn.ua

From the side of representatives of venture capital, Ihor Yankovsky (businessman and patron of art), Mikhailo Ryabokon (member of the Supervisory Board of the UVCA, the head of innovations of the Noosphere Association), Andrey Kolodyuk (founder and managing partner of AVentures Capital, head of the UVCA Supervisory Board) voiced their ideas on investments in Ukrainian science. The position of investors in this matter could be reduced to several theses:

Any start-up is an innovation. But innovation is not necessarily a scientific breakthrough, it could be a new business process, for example, or a product created using existing developments. The investor does not care to what industry the innovation belong. He thinks about its prospects in the market.

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It is important for an investor to understand the tasks and the technology of the product. Unfortunately, Ukrainian scientists do not think in terms of products. The same point of view was expressed by the interlocutors of the editorial office from the business sphere, as well as by HR specialists from Europe in the context of Ukrainian developers. They have got used to working on outsourcing, rather wait for ready-made instructions, seek to take responsibility for product.

Technology is only 20% of the project’s impulse. The remaining 80% are people who understand how to make a business out of it.

Ukraine has some money. According to the UVCA (Ukrainian Association of Venture Capital and Private Equity), last year the average amount of investments in domestic startups was $ 500,000, now 1-2 deals are closed every week. According to the forecast, this year the average transaction amount will be higher. This, of course, is not the Silicon Valley and not Europe, but there are funds for promising projects.

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A product, even a science-intensive one, is not one branch of science or one direction of the development. This is the synergy of several activities. If we talk about science-intensive, then they require  a whole ecosystem, scientists from different fields who will work together, each on their own part of the project. Often, there are some experimental production. The risks are added that something will be impossible from a scientific point of view.

In developed countries, the state remains the driver of innovation - many developments arise on government orders. An example is the United States, where private companies develop solutions for the army and space, and then they are introduced by the state. The Ukrainian state is a monopolist in terms of technology for the state. For example, only "Ukroboronprom" company deals with the decisions for the army. And a private company is difficult to offer something in this area.

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If we talk about projects at the first stage, when there is still no prototype, then the money can be sought from the state or in sponsorship funds. If we talk about Ukraine, then in our country the EBRD or the Horizon 2020 project can become a source.

There is no dialogue between business and science in the country. Scientists themselves rarely seek dialogue.

Scientists and founders of knowledge-based start-ups on the part of scientists and founders of knowledge-based start-ups were represented by Semen Yesylevsky (scientist, leading researcher of the Department of Biological Systems of the Institute of Physics of NASU), Viktor Dosenko (pathophysiologist, doctor of medical sciences, professor), Serhiy Danilov (neurophysiologist, candidate Biological Sciences, co-founder of the research laboratory and Beehiveor platform), Yuri Maletin (chief scientist of the company "Unasco") and Fevzi Ametov (co-founder Drone.ua). There are a number of aspects that scientists drew attention to.

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The state allocates for funding of science only 0.3% of the budget, this in itself is small money. At the same time, not all of them reach the Ukrainian science, since pseudo-scientists also flourish in the country (this problem was raised by the "House of Innovations" in one of the publications). Accordingly, investors also have the risk of encountering pseudo-scientists.

 Often, when a Ukrainian scientist is asked "who are your competitors", he answers that there are no competitors, the development is unique. For an investor, this phrase can be a beacon of the fact that development is not in demand by the market. If the technology is interesting to someone, then competitors will appear in a month.

Money can be found outside of Ukraine. The more global the product is, the more chances for success it has.

On the part of sociologists, Oleksiy Antypovich, head of "Rating" sociological group, took part in the panel discussion.

At the request of the organizers of the panel discussion, the group conducted a study among scientists. The study revealed interesting patterns: Ukrainian scientists, just like typical Ukrainians, are characterized by conservatism and mistrust. According to the research, only a third of scientists applied for funding their projects. Half of them were successful.

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Indeed, Ukrainian fundamental science is esteemed all over the world. But it is difficult for them to realize themselves within the country; these outstanding minds are forced to work in institutes, projects of other countries where fundamental research is financed.

On the part of the state, Jana Podlesnaya, head of the Secretariat of the State Innovative Financial and Credit Institution of the Ministry of Economic Development and Trade of Ukraine, took part in the discussion.

The position of the state concerning investing in science and start-ups is like "come to us, we have cookies." The state is the number 1 bank of the country’s projects. Every day, the institution receives innovative and investment projects, it has a base of investors, to which the state appeals with a proposal to invest in projects. To prove their intentions, the state suggests participating in investments: 90% are expected to be received from a strategic investor and 10% from Ukraine. Under this model, up to 45 projects were financed in two years. Usually, countries as Norway, France, Poland, the USA, China, and Korea invested.

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Since January 1, 2018, fund to support the development of start-ups will appear in Ukraine.

Ukrainians have little idea what a project is. Of the 10 submitted projects, usually at least one needs to be completed.

And those who turn to the state are reluctant to talk about their project, especially if they have not yet received a patent. The fund's website has a database of projects that already have a patent.

In Ukraine, you will face many obstacles to the financing of science-beginning from dubious cadres in the scientific community, ending with the detachment of scientists and the lack of a clear state program for financing development and start-ups. There are good specialists in the field of basic sciences in the country, but often between the end product that is of interest to the investor and fundamental research lies the abyss. Many Ukrainians take part in science-intensive projects outside the country, or for the Western companies. Scientists see the value of their activities in development, but the development frankly lacks marketing and understanding of the business position. At the same time, scientists themselves should struggle with their own conservatism and be more proactive in seeking funding for development.

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