The innate entrepreneurship of Ukraine – innovation against the odds
Ukraine is one of the largest exporters in the world of a number of agricultural commodities.
It has achieved this status not through careful legislative and public budgetary planning that would have encouraged investment in the agricultural sector, but it has been quite the opposite.
One would expect that legislation preventing the purchase and sale of agricultural land and a judiciary that has allowed owners of farms to defraud their creditors would stifle the sector and in many respects it has.
According to the Food and Agricultural Organization of the United Nationa, Ukraine invests three times less into fertilizers than the rest of the world and when you consider the country has about one-third of the total arable land of the European Union, capital investment into the sector is meager ($2.3 billion in 2017).
Nonetheless, Ukraine manages to achieve higher than average yields by global standards and has established itself as a serious agricultural player. This achievement is despite its national institutions and is instead thanks to one innate national asset: its fertile soil.
Just like Ukraine’s crops defy their environment, so does the nation’s output of innovation. Innovation thrives in transparent competitive markets with a sound rule of law.
Ukraine’s markets, in contrast, are dominated by oligopolies and State companies that have no need to innovate to “succeed” and the country’s legislative framework is far from sound.
Safeguarding investments in Ukraine are incredibly complex and deter many potential investors from entering the market.