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5/11/2016
Commercialization of
Technology in Ukraine
Report Paper
SEOSTAR ✪
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Table of Contents
1. INTRODUCTION ................................................................................................................... 2
2. OVERVIEW OF SCIENTIFIC & RESEARCH SECTOR ................................................................... 2
2.1 Main challenges .......................................................................................................................... 3
2.2 Structure of sector...................................................................................................................... 4
2.3 Independency & Transparency................................................................................................... 8
2.4 Demographic situation................................................................................................................ 9
2.5 Most famous people originated and migrated from Ukraine .................................................. 11
2.5 Current situation with work...................................................................................................... 12
2.6 Organizational/funding reforms that have taken / is taking place .......................................... 13
2.7 International cooperation within the sector ............................................................................ 14
2.8 History of development after 1990 .......................................................................................... 15
3. TECHNOLOGY TRANSFER AND COMMERCIALIZATION IN UKRAINE ........................................ 16
3.1 Current situation....................................................................................................................... 16
3.2 Problems of commercialization ................................................................................................ 19
3.3 Recommendations.................................................................................................................... 20
3.4 Conclusion................................................................................................................................. 21
4. ANNEX 1 - INFORMATION ABOUT THE ACTORS WITHIN THE SECTOR AND THE RATING OF THE
INSTITUTES/UNIVERSITIES........................................................................................................ 21
5. ANNEX 2 - LIST OF SUCCESS STORIES IN COMMERCIALIZATION OF TECHNOLOGY................... 23
6. REFERENCES ......................................................................................................................... 25
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1. INTRODUCTION
This work aimed to evaluate and analyse commercialization of technology and science sector in
Ukraine. Currently Ukrainian science and research industry occupy a 13th place in Science and
Technology category among the other 124 countries in accordance with Good Country Index (The
Good Country, 2016). It demonstrates positive prospective and result, despite the fact that country’s
political and economic situation are not stable, the level of inflation and corruption are high. However,
the number of certified professionals is the main driver of progress and technology development is
globalization. Nowadays, globalization is stronger than ever, and Ukraine is not exceptional, it was
influenced a lot. The barriers for data exchange, research and development activities - are rapidly
eliminated, scientists can have access to data and technologies through all over the world.
2. OVERVIEW OF SCIENTIFIC & RESEARCH SECTOR
The development of any modern economy is significantly dependent upon the level of development
of its science and technology sector. The decades of experience indicate that research and development
are more important factors that drives the economy and growth.
As for now, the world market of high technology products is about 2.3 trillion. US. a year, the share
of Ukraine is not more than 0.05% of its volume. Experts predict that demand for high-tech industrial
and consumer markets 10-15 years reach 3.5-4 trillion. US. Understanding customer needs, the ability
to realize the scientific and technological potential into profitable commercial projects is a prerequisite
for success in the market of high technologies. Thus, the special interest worthy of study in marketing
approach to promote high-tech products.
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2.1 Main challenges
The main challenges for Ukraine in the development of science and technology:
 Unstable political and economic situation in country
 High inflation rate 20.9 % (Tradingeconomics, 2016)
 Many young and talented are leaving the country for better opportunities
 Low salary due to market situation
 High dynamics of market – technologies are changing very fast
 High competition worldwide due to globalisation
 High value of brand name producers
Although, there is a high inflation, it demonstrates recovery since April, 2015 60,9%. See the table
below:
The future of the market of high technologies in Ukraine is its significant backlog of markets as highly
developed countries and from the world market as a whole. The main reason experts say is the entire
subordinated long-term high-tech sector of the military-industrial complex. As a result, today there is
no mechanism to attract investments in high-tech industries, not infrastructure market intellectual
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property, enterprise specializing in developing and manufacturing high-tech products, there is little
experience and skills in market conditions.
2.2 Structure of sector
Laws and regulations
In Ukraine, the formation of zones of high technology began in the late 90s of last century.
Parliament adopted the law "On Special Investment and innovation of technology parks"
Semiconductor technologies and materials, optoelectronics and sensor technology "," Electric
Welding Institute named after EO Paton "," Institute for Single Crystals ".
Preferential terms of functioning as cancelled and normal subjects’ innovation - potential
partners for technology parks. The Law of Ukraine "On State Budget of Ukraine for 2005"
excluded articles that assumed the features of tax and customs innovation regulation
performers innovation beyond technology parks. This also provided funds to subsidize such
projects. So, now in Ukraine there is no direct or indirect state support innovation and
innovative sector of the country returns to the state beginning in 1999 In this regard, it is worth
noting that compared to the amount of benefits granted to free economic zones, incentives for
domestic technological parks is almost negligible.
From the latest documents significant achievement was the adoption of the Law of Ukraine "On
innovation activity priorities in Ukraine» №433-IV of 16 January 2003, which formulated the
legal, economic and organizational basis for the formation and implementation of the priority
areas in the country. The purpose of the law is a legislative provision of resources in the major
areas of scientific and technological renewal of production and service sectors in the country,
the needs of society in high-tech, competitive, environmentally friendly products, quality
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services, increase export potential state, the output of competitive high technology products for
the global market.
Financing
Despite the high potential Ukraine from year to year funding cuts its own scientific field.
Compared with 1991, when contributions to research were 2.44%, now local researchers have
a really survive. It is for the government than to advanced technologies in 2015 to finance the
sector allocated only 0.5% of GDP.
State funding is one of the main financial instrument sciences, technology and innovation policy
economically developed countries, the main form of direct state support of innovative
development.
Total expenditures of the state budget of Ukraine in 2014 to finance scientific field in 56 major
budget programs 32 spending money - customers’ scientific works were: the plan -
5,598,280,000. UAH., including 4,118,040,000. UAH. or 73.6% from the general fund;
1,480,240,000. UAH. or 26.4% - of the special fund; financed - 5,278,520,000. UAH., of which
from the general fund - 4,085,260,000. UAH. (77.4% of the planned amount), special -
1,193,260,000. UAH. (22.6%)
Analysis of the distribution of total funding scientific sphere by spending units shows that the
largest expenditures for funding scientific sphere have five spending units around them
accounted for almost 88% of spending (4,639,550,000. UAH).
Meanwhile, a 100-point scale in 2012-2014, our country, according to the innovation index,
gained 36.3 points. The world leader - Switzerland - received 64.8 points, United States - 60.1,
neighbouring Russia - 39.1.
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Add that to the world innovation index takes into account such factors as academic institutions,
human capital, infrastructure, domestic market development, business development,
innovation and practical results of creative activity
The situation with financing is quietly dramatic in Ukraine. The government spent less and less.
The graph below – demonstrates these changes:
(Slovo & Dilo, 2015)
0,00
0,50
1,00
1,50
2,00
2,50
3,00
1985 1990 1995 2000 2005 2010 2015 2020
FINANCING OF TECHNOLOGY IN UKRAINE %
FROM GDP
2,44
1,20
0,82 0,73 0,75 0,77
0,66
0,5
-0,50
0,00
0,50
1,00
1,50
2,00
2,50
3,00
1990 2000 2010 2011 2012 2013 2014 2015
Financing of technology in Ukraine % from
GDP
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Institutions
Ukraine has a great number of institutions oriented to prepare technical specialists and develop
technology and science sector. Despite the fact, that government decreases investments in
science and technology, there are thousands of specialists that graduate and work each year.
The overall number of technical institutions in Ukraine is 61 from 440 all institutions in Ukraine.
Also, Ukraine has 1 academy of science: National Academy of Sciences of Ukraine.
The Ukrainian Academy of Sciences, founded in 1919, has sections of physical engineering and
mathematical sciences, and chemical engineering and biological sciences; it holds 66 scientific
and technical research institutes attached to it. The Ukrainian Academy of Agrarian Sciences has
13 research institutes, and the Ukrainian Academy of Medical Sciences has six research
institutes. All three academies are headquartered in Kiev. A botanical museum is situated in
Kiev. Ukraine has 92 universities, polytechnics, and institutes that offer courses in basic and
applied scientific disciplines. In 1987–97, science and engineering students accounted for 42%
of university registration. In 2002, research and development (R&D) expenditures totalled
$2,805.687 million, or 1.18% of GDP. Of that amount, the government offered the largest
portion at 37.4%, followed by the business sector at 33.4%, foreign sources at 26.2%, higher
education and private non-profit organizations at 0.4% each, with 2.3% listed as undistributed.
During that same year, there were 1,749 scientists and engineers, and 456 technicians engaged
in R&D per million people. High technology exports in 2002 were valued at $572 million,
accounting for 5% of the country's manufactured exports (Encyclopedia.com, 2016).
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2.3 Independence & Transparency
The information agency Ukrinform is holding a press-conference, where the Regional Press
Development Institute will publish the monitoring results on transparency of 100 websites of
higher educational institutions of Ukraine.
The monitoring, research was extended out to estimate the quality of informing international
citizens as to the admission requirements to higher educational institutions of Ukraine and
training there. The monitoring criteria of websites included availability of general data
concerning an educational institution and the information needed for admission, training and
stay of international students in Ukraine. There was also estimated the fullness of present
information, its translation into foreign languages and good access to it.
Rule of law
Ukraine has made some progress in fighting corruption, but considerable problems persist. The
removal of Victor Yanukovych ended the extensive graft by the president, his family, and his
closest associates. However, the old oligarchies continue to benefit financially from their close
association with top politicians. Even in areas controlled by the national government, the
judiciary remains weak, and contracts may not be well enforced.
Regulatory efficiency
The labour code is outmoded and lacks flexibility. The government influences prices through
state-owned enterprises. The IMF reports that 740 state-owned enterprises registered losses
amounting to about 1 percent of GDP in 2014 and that, as a group, SOEs have accumulated
substantial liabilities amounting to more than 12 percent of GDP.
 Business Freedom 56.8
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 Labour Freedom 47.9
 Monetary Freedom 66.9
Open markets
Ukraine’s average tariff rate is 2.1 percent. Government procurement procedures favour local
companies. Foreign investors may not purchase agricultural land, and the investment frame-
work remains underdeveloped with other sectoral restrictions. The Russia–Ukraine conflict
continues to interfere with trade and investment streams. The large figure of non-performing
loans continues to be a drag on the banking system.
 Trade Freedom 85.8
 Investment Freedom 20.0
 Financial Freedom 30.0
2.4 Demographic situation
Major urban areas - population: KYIV (capital) 2.942 million; Kharkiv 1.441 million; Odesa 1.01
million; Dnipropetrovsk 957,000; Donetsk 934,000; Zaporizhzhya 753,000 (2015)
Due to the complex situation in Ukrainian economy and politic situation there are many people
that decided to migrate. The fourth wave - the so-called "migrant" - began in the 1990s. Its main
reasons - economic hardship of transition in Ukraine. Some researchers emphasize the
deliberate creation of unemployment, mostly - in Western Ukraine. As a result, for temporary
work in Europe, America and Russia have left about 7.8 million. People. Some of them probably
will not return to Ukraine.
According to the director of the Institute for Diaspora Studies (Kyiv) Igor Vinnichenko 2001
lived outside Ukraine 10-13 million. Ukrainian.
Due to the fact that outside of their own country was forced to travel under pressure from
economic, political and military circumstances active part of the nation, but also because of the
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lack of full Ukrainian state on ethnic Ukrainian lands, in the new EU settlement abroad
Ukrainians continued and developed the national government (UNR), political (virtually the
entire spectrum of political parties in the Diaspora), social, cultural, scientific and religious
institutions. For the Ukrainian diaspora one of the highest social-cultural values was the goal of
full restoration of the Ukrainian state.
Current demographic situation in Ukraine
Age structure:
 0-14 years: 15.22% (male 3,480,870/female 3,281,363)
 15-24 years: 10.85% (male 2,470,594/female 2,349,313)
 25-54 years: 44.63% (male 9,703,407/female 10,126,348)
 55-64 years: 13.5% (male 2,563,195/female 3,435,022)
 65 years and over: 15.8% (male 2,343,097/female 4,676,262) (2015 est.)
Dependency ratios:
 total dependency ratio: 43.3%
 youth dependency ratio: 21.4%
 elderly dependency ratio: 21.9%
 potential support ratio: 4.6% (2015 est.)
Median age:
 total: 40.1 years
 male: 37 years
 female: 43.3 years (2015 est.)
Population growth rate: 0.6% (2015 est.)
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Birth rate: 10.72 births/1,000 population (2015 est.)
Death rate: 14.46 deaths/1,000 population (2015 est.)
Net migration rate: -2.25 migrant(s)/1,000 population (2015 est.)
Education expenditures: 6.7% of GDP (2012)
Literacy: age 15 and over can read and write total population: 99.8%
2.5 Most famous people originated and migrated from Ukraine
1. Steve Wozniak
One of the founders, perhaps the most famous companies in the world - Apple. His father was
born in the village of Krasnaya Dubrava in Bukovina. Two Steves - Jobs and Wozniak - had been
friends at school, and when grown in the same together ushered in the era of personal
computers.
2. Igor Sikorsky
Future genius was born in Kiev. First he gained worldwide recognition in the 24 - his plane "Ilya
Muromets" was the record in capacity. Subsequently, the aircraft went to the States, where he
opened his own company - Sicorski Air Engineering.
He used helicopters armed forces of the United States. And that "birds" Ukrainian engineer first
ever flew the Atlantic and the Pacific. Since its planes and helicopters continents together and
allowed to overcome the vast distances in a matter of hours.
3. Max Levchin
In Silicon Valley in the US, which is famous for its concentration of high-tech companies, has also
distinguished us. In his 27 Kievan Max Levchin established payment system PayPal, which now
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enjoys a world. Ukraine left the guy at 16. Today it is one of the most successful and richest
programmers Valley.
4. Heidemarie Stefanyshyn-Piper
According to the Foreign Ministry press service, American astronaut of Ukrainian
extraction HeidemarieStefanyshyn-Piper intends to visit Ukraine after the Atlantis space
mission is over. The Atlantis was launched from Cape Canavaral in Florida on September 9 with
six astronauts on board. The Atlantis crew includes one Canadian and five Americans, one of
whom is Heidemarie Stefanyshyn-Piper. The crew's space mission is scheduled to last twelve
days. Heidemarie Stefanyshyn-Piper is supposed to make two out of the crew's three space
walks, each lasting about six and a half hours.
The American female astronaut has two uncles and two aunts in Ukraine, who are her father's
brothers and sisters.
2.5 Current situation with work
Currently, there are many Ukrainian professionals and researchers that are looking for
opportunities abroad. This is due the current drastic economic situation in country and very low
wages on local market. People are willing to work for foreign market, because even if they bit a
low rate on the foreign market, they still win at local. Salary in $ is most attractive perspective.
Current exchange rates are very unbalanced. Therefore, 1/3 of Ukrainian It professionals are
working for foreign market.
Now the market has more than 123 000 freelancers from different cities of Ukraine. Most of
them work in the IT, in particular - in web development and mobile application development.
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Their number is constantly growing: in 2014 alone, 31 000 new Ukrainian specialists were
registered on the platform. In 2015, the company expects growth at the same level or higher.
Freelancers who use Upwork, set their own hourly rate. Working for foreign customers,
Ukrainian developers may earn $ 20-30 per hour depending on skills, experience and the rating
on the platform. Professional developers with a good rating, on average, 25% more than other
freelancers (Ain.UA, 2015).
2.6 Organizational/funding reforms that have taken / is taking place
Kyiv, October 5, 2015 – Despite a few encouraging signs of economic stabilization seen in July
and August 2015, in its new Ukraine Macroeconomic Update the World Bank projects real GDP
to go down by 12 percent this year, down from an earlier projected 7.5 percent decline. The
macroeconomic policy mix adopted by the authorities proved to be effective in mitigating a
much more painful shock on the country’s economy, but the on-going conflict in the east has
made stabilization more difficult. Coupled with an unfavourable global economic environment,
it has gone to a much sharper contraction in the economy.
Ukraine’s economic recovery depends on whether the authorities continue implementing
much-needed macroeconomic and structural reforms, even as periodic flaring up of conflict
adds troubles. If reforms continue, a gradual recovery is possible starting from 2016. It is
anticipated to be driven by net exports, capital investment and privatization.
Despite lower GDP growth in 2015, the country’s general fiscal and budget performance has so
far been better than anticipated. The current account saw declining pressures and reached a
balance earlier this year, but risks confronting Ukraine remain high. To guard against these
risks, it is very important that authorities continue with flexible exchange rate regime and
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prudent fiscal policy. They need to redouble efforts at fighting corruption and improving
governance. They need to continue reforms to reduce Naftogaz imbalances and strengthen the
energy sector’s capacity. In addition, the authorities need to boost confidence in the banking
system (World Bank, 2016).
2.7 International cooperation within the sector
Ukraine joins Horizon 2020 to work with EU in science and research
Researchers, businesses and innovators from Ukraine will now be capable to fully participate in
Horizon 2020, the European Union's research and innovation funding program, on equal terms
with EU Member States and other associated countries. This is thanks to the Agreement for the
Association of Ukraine to Horizon 2020, signed today in Kyiv by Carlos Moedas, European
Commissioner for Research, Science and Innovation, and Serhiy Kvit, Minister of Education and
Science of Ukraine.
Commissioner Moedas said: "I merely pleased to welcome Ukraine into our EU research funding
program Horizon 2020. Ukraine has chosen to invest in its cognition and in its people. Chosen
to contribute to the common goals of the broader science and technology community. Ukraine's
great research and innovation potential offer promising partnerships in Europe. And Ukraine
will now have access to the entire spectrum of activities funded under the Horizon 2020, helping
spur its economy. I hope Ukraine will make the most of these chances."
Horizon 2020 is the first EU program in which Ukraine has chosen to participate following the
beginning of provisional application of the EU-Ukraine Association Agreement. This association
to Horizon 2020 highlights that both the EU and Ukraine consider research and innovation
crucial for economic development and the creation of jobs (Europa.eu, 2015).
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The agreement opens a wide orbit of new opportunities to Ukrainian research institutions,
universities and businesses across the whole research and innovation, value chain, from
fundamental research up to close-to-market activities. For instance, Ukraine will now be
capable to host European Research Council (ERC) grants, apply for financial support to
innovative SMEs, benefit from support for scientific excellence and other research policies and
participate in the governance structures of the program (Europa.eu, 2015).
Background
With a budget of almost € 80 billion for 2014-2020, Horizon 2020 is the largest multinational
program dedicated to research and innovation. In its predecessor, FP7, Ukraine was one of the
top ten most performing third countries, with a total number of 274 successful participations in
a sum of 207 retained proposals. The top five priority areas with retained participation from
Ukraine have been an environment (including Climate Change); tape drive (including
aeronautics); Nanosciences, nanotechnologies, materials and new production technologies;
food, agriculture and fisheries, biotechnologies; and space (Europa.eu, 2015).
Today's agreement will need to be ratified by the Ukrainian Parliament to enter into force, but
Ukrainian legal entities can already participate in all Horizon 2020 actions funded under the
2015 budget, as this association covers the years 2015-2020. Ukraine has also requested
association to the Euratom Research and Training Program but negotiations need to trace a
separate track (Europa.eu, 2015).
2.8 History of development after 1990
In the field of science in general in Ukraine pose great difficulties, low level of funding, the crisis
of production and lean enterprise demand for scientific development. This resulted in
insufficient logistical and personnel support of scientific institutions, which have received
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almost no modern devices and computing. Some institutions have lost 50-60% of their
employees who left the country or moved to other areas. Already in 1994 it was known that in
western countries have gone from Ukraine to thirty thousand. Scientists, mainly from natural
and applied sciences. As a result of a decline in the prestige of scientific work decrease
professionalism scientists' reluctance of young people to enter the graduate school there and
the lack of competition. This situation does not give hope for a quick exit from the crisis, Ukraine,
although many scientists working in this direction.
In the mid 90's gradually changing attitude to fundamental research in the institutes of NAS of
Ukraine develop its relations with some foreign research institutions. In 1996-1997 pp., After
the establishment of the structure of government in the Ukraine special Ministry of Science,
headed by Academician Semynozhenko, the work of many scientific institutions activated.
Dynamically developing Humanities, new institutions, new research directions. In particular,
the Institute established Ukrainian, Institute of Oriental Studies named after A. Krymsky
Institute of World Economy and International Relations, Institute of Sociological Studies et al.,
Mainly as part of the NAS. In 2001-2003 pp. There is some increase in funding for research, new
developments in the space industry and others.
3. TECHNOLOGY TRANSFER AND COMMERCIALIZATION IN UKRAINE
3.1 Current situation
In modern Ukrainian law the concept of "commercialization" is not exciting at all, but for, it is
used as the phrase "intellectual property to attract economic exchange." It is believed that the
commercialization of the technology is the final stage of transfer of technology. However, some
scientists believe that the commercialization of the technology is the same as the commercial
transfer or transfer should be seen as a way to implement commercialization.
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According Methodical recommendations on commercialization developments created as a
result of scientific and technical activity, approved by the State Committee of Ukraine for
Science, Innovation and Informatization of Ukraine as for 13 September, 2010,
commercialization development mechanism (technology) for enterprises and institutions of the
state form involves the following steps: 1) technological audit; 2) market research; 3) economic
audit; 4) obtaining protection; 5) promotion; 6) contract.
Below, there is a frame of commercialization of technologies in Ukraine:
The focus in the process of activation of commercialization is paid to the relationships and
information exchange between the participants in the innovation process. Therefore, in
Ukraine there is a need to create a network of agencies transfer and commercialization of
Methods of
commercialization
technology
Transfer of rights to
development(IPR)
Adding to the IP rights
to the authorized
capital of the company
The transfer of rights
to use IPR
Under licensing
agreement
Under the contract
commercial concession
(franchise)
Under the lease
agreement
Transfer (assignment)
property rights to IPR
Use in own production
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accession to international agreements and national patent data banks. Currently operating a
number of state agencies that have access to a significant amount of scientific, technical and
economic information including: Research Institute of Intellectual Property, the State Statistics
Committee, Ministry of Education, Science, Youth and Sports of Ukraine, Association of
Inventors and Innovators, DC Science, Innovation and Information, centers of scientific and
technical information, etc., whose function is to provide information and consulting services to
business entities on the possibilities of new technologies and attract the necessary resources
and participate in the implementation of innovative projects.
In the area of commercialization of research activities in developed countries, an interest on
the part of the various structures, networks. The main transfer networks include:
 Enterprise European Network (EEN) - has been established as an integrated network of
support services business, based on the experience of two networks of 270 Euro Info
Centers (EIC) and 250 Innovation Relay Centers (IRC), whose work ended in December
2007. Program CIP - Competitiveness and Innovation Program - improving the
competitiveness of enterprises and innovation development (budget of 3.621 billion.
euro period - 2007-2013.)
 Russian Technology Transfer Network RTTN - was established in 2002 initiator of the
Russian technology transfer network by the Ministry of industry, science and
technologies of the Russian Federation with the support of TACIS “Innovation centers
and science cities”
 Ukrainian Technology Transfer Network - establishment of technology transfer centers
network UTTN, certification participants and partner network UTTN, organization of
international cooperation
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So, as a conclusion it noted that the commercialization of scientific and technical activities
(IPR), in terms of increased competition and accelerated NTP, is a major and important areas
of innovation for both companies that want to gain a competitive advantage in business, and
for inventors and scientists who want to bring to the final stage of his intellectual product and
get a reward.
3.2 Problems of commercialization
Analysis of the statistics shows that the high-tech sector Ukraine faces a number of problems.
State Agency for Science, Innovation and Information revealed problems high technology sector
and has concluded that despite the fact that Ukraine remained a major research institution,
science and technology and innovation does not play properly as a source of economic growth,
the pace of development and the structure of science, technology and innovation sphere do not
meet the growth of demand for advanced technologies; show low the susceptibility of the
business sector to innovate; occurring loss rate and reduce material and technical means in
science and technology and innovation.
The main reasons for these problems are:
1) reduction of state financing of R & D and innovation sector;
2) the ineffectiveness of the system of budget financing of Ukrainian science:
 The system is not configured to obtain the final result of application;
3) legislative restrictions that complicate the financing of scientific areas:
 Because of the complicated procedure of servicing the State Treasury special
accounts, including the activities funded by public research institutions and
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universities educational institutions, customers, including foreign, often refuse
cooperate with these institutions;
 Government customers research and development work (R & D) in addition to a
competitive selection procedure have to use competitive bidding in the
implementation of public procurement
4) lack of economic entities of economic incentives to carry out technological modernization by
introducing new scientific and technical developments.
3.3 Recommendations
Having analysed the experience of developed countries, initially improve technology sector can
also recommend distinguish high-priority industries and focus on their development. It is
necessary to strengthen state support to priority high-tech industries and encourage their
funding. To do this on the level of government- improve the regulatory framework to facilitate
the development of investment in the industry. It is necessary to involve Ukrainian and foreign
scientists for the development of these industries, enable researchers to realize their works and
inventions in practice. That should enhance the interaction between scientists and
entrepreneurs. It is also a useful introduction tax incentive to companies that invest in the
creation of high technologies.
Initially, improve technology sector Ukraine is also an important condition for attracting foreign
investment in this sector. It is necessary to take measures to improve the investment
attractiveness of the sector.
Research in the field of high technologies should be focused on the development of domestic
production of high-tech products, state support of high technology sector and investment in the
sector (particularly foreign).
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3.4 Conclusion
So, today Ukraine has enough high scientific potential, a significant amount of the IPO, retains a
significant amount of high technology in the aviation and space industries, IT technologies,
shipbuilding, etc., but has significant problems with the commercialization of scientific and
technological development and transfer nearly all industries. To solve these problems requires
consolidation of the efforts of both public institutions, legislators and representatives of
business and production sector, universities and research organizations.
4. ANNEX 1 - INFORMATION ABOUT THE ACTORS WITHIN THE
SECTOR AND THE RATING OF THE INSTITUTES/UNIVERSITIES
List of TOP technical institutions:
# University Field City Website
1 Kharkiv National
University of Radio
Electronics
Radar
Technology
Kharkiv http://www.univer.kharkov.ua/en
2 National Aerospace
University "Kharkiv
Aviation Institute"
Space
Technology
Kharkiv http://www.khai.edu/
3 Kiev Polytechnic
Institute (KPI)
Multiple Kiev http://kpi.ua/
4 Kharkiv Polytechnic
Institut
Multiple Kharkiv http://www.kpi.kharkov.ua/en/
5 Vinnytsia National
Technical University
Multiple Vinnytsia http://vntu.edu.ua/
6 National
Metallurgical
Academy of Ukraine
Material Science Dnipropetrovsk http://nmetau.edu.ua/en
7 Poltava National
Technical University
Multiple Poltava http://pntu.edu.ua/uk/
8 National Mining
University of
Ukraine
Mining Dnipropetrovsk http://www.nmu.org.ua/
9 Donetsk National
Technical University
Multiple Donetsk http://donntu.org/
10 Lviv Polytechnic Multiple Lviv http://lp.edu.ua/
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List of private technical institutions:
1. KIBIT (Kiev Institute of Business and Technology)
Website: http://kibit.edu.ua/ City: Kiev
2. ITSU (Academician Yuriy Bugay International Scientific and Technical University)
Website: http://www.istu.edu.ua/en/ City: Kiev
Other institutions by industry:
Space Technology City Website
Kiev Polytechnic Institute (KPI) Kiev http://kpi.ua/en/node/7242
Oles Honchar Dnipropetrovsk National
University Dnipropetrovsk http://www.dnu.dp.ua/
Zhytomyrskyi viiskovyi instytut im. S. P.
Korolova Zhytomyr http://zvir.zt.ua/
Zaporizhzhya National Technical
University Zaporizhzhya http://www.zntu.edu.ua/
Oil & Gas Technology
Zhytomyr State Technological
University Zhytomyr https://ztu.edu.ua/
Ivano-Frankivsk National Technical
University of Oil and Gas (IFNTUOG) Ivano-Frankivsk http://nung.edu.ua/
National Mining University (NSU) Dnepropetrovsk http://www.nmu.org.ua/
Institute of Refrigeration, and
cryotechnology Ecoenergy (IHKE) Odessa http://onaft.od.ua/Pages_cat_44.html
Material Science
MRC Kiev http://mrc.org.ua/
Institut for Problems of Material
Sciences NAS of Ukraine Kiev http://www.materials.kiev.ua/
Medical technology
Kyiv Medical University UANM Kiev http://www.kmu-kyiv.com/
Kyiv International University (KIU) Kiev
http://www.kymu.edu.ua/language-
english/
International Humanitarian
University Odessa http://www.odessa-education.com/en/
Applied Mathematics
Taras Shevchenko National University
of Kyiv Kiev http://www.univ.kiev.ua/en/
Ivan Franko National University of
Lviv Lviv http://www.lnu.edu.ua/
23 | P a g e
National University of Kyiv-Mohyla
Academy Kiev http://www.ukma.edu.ua/
Radar Technology
none
Cryptography
National University of Kyiv-Mohyla
Academy Kiev http://www.ukma.edu.ua/
Kiev Polytechnic Institute (KPI) Kiev http://kpi.ua/en/node/7242
Kharkiv National University of
Internal Affairs Kharkiv http://univd.edu.ua/
Electronics
Kyiv National University of Construction
and ArchitectureKyiv Kiev http://www.knuba.edu.ua/
Ukrainian State Chemical Technology
University Kiev http://udhtu.com.ua/
Chemistry
Ukrainian State Chemical Technology
University Kiev http://udhtu.com.ua/
National Pedagogical Dragomanov
University Kiev
http://www.npu.edu.ua/index.php?lang
=en
5. ANNEX 2 - LIST OF SUCCESS STORIES IN COMMERCIALIZATION OF
TECHNOLOGY
1. Preply (link) - an online search service of a foreign language tutors. The site launched in April
2013 since then, he has undergone several milestones. In July, the team went on acceleration in
the Berlin branch of the incubator TechStars and received a $ 120,000 investments.
2. Kwambio (link) initially is an online platform on which designers can upload their 3D-
projects, and users - to change their appearance to your taste and print on their devices.
However, in February he changed the model and became an online store: Now Kwambio offering
designer goods, printed the 3D-printer-made ceramics and metals, including precious.
3. LifeTracker.io (link) - PDNA is the first project of the company, which is working to create a
symbiotic artificial intelligence. While this is a mobile app for iOS and Android, but in the future
24 | P a g e
product plan to combine with all possible interfaces, including - the internet of things. In January
2016 the project attracted investment company Digital Future of EUR 200 000.
4. Wishround (link) - online service fulfilment of desires, which launched two ex-employee
Terrasoft. The site can fill out a form and create any wish and start collecting money on it. The
service already has many large clients in Ukraine: Citrus, LeBoutique, SuperDeal, Repka.ua. He
also recently became a form of payment at online stores.
5. Sale Looksery (link) - an innovative platform that allows you to edit photos and video selfie
in real time, for $ 150 million was the main event of the 2015 Uanete. Now Looksery as a
separate project does not exist, the application is long gone in the App Store, it became part of
the project Snapchat Lenses.
6. Competera (link)- it rial-time service that helps online merchants daily set prices
corresponding to the market realities. Start-up is focused on the global market with clients from
the CIS, England, America and even Australia.
7. Ecoisme(link) - a system of home energy management, and the most "prominent" in the
startup UA internet. The children regularly receive awards at various exhibitions abroad. And
in March of this year, hit the accelerator Ecoisme Richard Branson and attracted investments
from two business angels - Nick Belogorskogo and Sergey Povzner.
25 | P a g e
6. REFERENCES
An Assessment of the International Science and Technology Center. (1996). .
e.V., T. (2016). Transparency International - Country Profiles. [online]
Transparency.org. Available at: https://www.transparency.org/country/#UKR
[Accessed 15 Apr. 2016].
Encyclopedia.com. (2016). Ukraine Facts, information, pictures | Encyclopedia.com
articles about Ukraine. [online] Available at:
http://www.encyclopedia.com/topic/Ukraine.aspx [Accessed 14 Apr. 2016].
Europa.eu. (2015). European Commission - PRESS RELEASES - Press release - Ukraine
joins Horizon 2020 to work with EU in science and research. [online] Available at:
http://europa.eu/rapid/press-release_IP-15-4640_en.htm [Accessed 20 Apr. 2016].
The Good Country. (2016). The Good Country - Overall Rankings. [online] Available at:
http://goodcountry.org/index/overall-rankings [Accessed 16 Apr. 2016].
World Bank. (2016). Ukraine: Reforms Helped to Stabilize Economy, but Continued and
Faster Reforms are Key. [online] Available at:
http://www.worldbank.org/en/news/press-release/2015/10/05/ukraine-
macroeconomic-update-october-2015 [Accessed 20 Apr. 2016].
Освіта.UA. (2016). Приватні вузи України - довідник. [online] Available at:
http://osvita.ua/vnz/guide/search-17-43-0-0-134-100.html [Accessed 15 Apr. 2016].
Реактор, к. (2016). ВНЗ України — авіація і космонавтика. [online] Osvita.com.ua.
Available at: http://www.osvita.com.ua/ua/universities/?directions=51 [Accessed 20
Apr. 2016].
Слово і Діло. (2015). Дорогоцінні знання: як Україна фінансує наукові дослідження.
[online] Available at:
http://www.slovoidilo.ua/2015/11/25/infografika/suspilstvo/dorohoczinni-znannya-
yak-ukrayina-finansuye-naukovi-doslidzhennya [Accessed 15 Apr. 2016].
Яровая, М. (2015). Как Upwork развивает украинский рынок IT и фриланса и кого
ищут западные клиенты – интервью с кантри-менеджером Катей Божковой.
[online] AIN.UA. Available at: http://ain.ua/2015/12/10/620827 [Accessed 18 Apr.
2016].

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Commercialization of Technology in Ukraine P

  • 1. 5/11/2016 Commercialization of Technology in Ukraine Report Paper SEOSTAR ✪
  • 2. 1 | P a g e Table of Contents 1. INTRODUCTION ................................................................................................................... 2 2. OVERVIEW OF SCIENTIFIC & RESEARCH SECTOR ................................................................... 2 2.1 Main challenges .......................................................................................................................... 3 2.2 Structure of sector...................................................................................................................... 4 2.3 Independency & Transparency................................................................................................... 8 2.4 Demographic situation................................................................................................................ 9 2.5 Most famous people originated and migrated from Ukraine .................................................. 11 2.5 Current situation with work...................................................................................................... 12 2.6 Organizational/funding reforms that have taken / is taking place .......................................... 13 2.7 International cooperation within the sector ............................................................................ 14 2.8 History of development after 1990 .......................................................................................... 15 3. TECHNOLOGY TRANSFER AND COMMERCIALIZATION IN UKRAINE ........................................ 16 3.1 Current situation....................................................................................................................... 16 3.2 Problems of commercialization ................................................................................................ 19 3.3 Recommendations.................................................................................................................... 20 3.4 Conclusion................................................................................................................................. 21 4. ANNEX 1 - INFORMATION ABOUT THE ACTORS WITHIN THE SECTOR AND THE RATING OF THE INSTITUTES/UNIVERSITIES........................................................................................................ 21 5. ANNEX 2 - LIST OF SUCCESS STORIES IN COMMERCIALIZATION OF TECHNOLOGY................... 23 6. REFERENCES ......................................................................................................................... 25
  • 3. 2 | P a g e 1. INTRODUCTION This work aimed to evaluate and analyse commercialization of technology and science sector in Ukraine. Currently Ukrainian science and research industry occupy a 13th place in Science and Technology category among the other 124 countries in accordance with Good Country Index (The Good Country, 2016). It demonstrates positive prospective and result, despite the fact that country’s political and economic situation are not stable, the level of inflation and corruption are high. However, the number of certified professionals is the main driver of progress and technology development is globalization. Nowadays, globalization is stronger than ever, and Ukraine is not exceptional, it was influenced a lot. The barriers for data exchange, research and development activities - are rapidly eliminated, scientists can have access to data and technologies through all over the world. 2. OVERVIEW OF SCIENTIFIC & RESEARCH SECTOR The development of any modern economy is significantly dependent upon the level of development of its science and technology sector. The decades of experience indicate that research and development are more important factors that drives the economy and growth. As for now, the world market of high technology products is about 2.3 trillion. US. a year, the share of Ukraine is not more than 0.05% of its volume. Experts predict that demand for high-tech industrial and consumer markets 10-15 years reach 3.5-4 trillion. US. Understanding customer needs, the ability to realize the scientific and technological potential into profitable commercial projects is a prerequisite for success in the market of high technologies. Thus, the special interest worthy of study in marketing approach to promote high-tech products.
  • 4. 3 | P a g e 2.1 Main challenges The main challenges for Ukraine in the development of science and technology:  Unstable political and economic situation in country  High inflation rate 20.9 % (Tradingeconomics, 2016)  Many young and talented are leaving the country for better opportunities  Low salary due to market situation  High dynamics of market – technologies are changing very fast  High competition worldwide due to globalisation  High value of brand name producers Although, there is a high inflation, it demonstrates recovery since April, 2015 60,9%. See the table below: The future of the market of high technologies in Ukraine is its significant backlog of markets as highly developed countries and from the world market as a whole. The main reason experts say is the entire subordinated long-term high-tech sector of the military-industrial complex. As a result, today there is no mechanism to attract investments in high-tech industries, not infrastructure market intellectual
  • 5. 4 | P a g e property, enterprise specializing in developing and manufacturing high-tech products, there is little experience and skills in market conditions. 2.2 Structure of sector Laws and regulations In Ukraine, the formation of zones of high technology began in the late 90s of last century. Parliament adopted the law "On Special Investment and innovation of technology parks" Semiconductor technologies and materials, optoelectronics and sensor technology "," Electric Welding Institute named after EO Paton "," Institute for Single Crystals ". Preferential terms of functioning as cancelled and normal subjects’ innovation - potential partners for technology parks. The Law of Ukraine "On State Budget of Ukraine for 2005" excluded articles that assumed the features of tax and customs innovation regulation performers innovation beyond technology parks. This also provided funds to subsidize such projects. So, now in Ukraine there is no direct or indirect state support innovation and innovative sector of the country returns to the state beginning in 1999 In this regard, it is worth noting that compared to the amount of benefits granted to free economic zones, incentives for domestic technological parks is almost negligible. From the latest documents significant achievement was the adoption of the Law of Ukraine "On innovation activity priorities in Ukraine» №433-IV of 16 January 2003, which formulated the legal, economic and organizational basis for the formation and implementation of the priority areas in the country. The purpose of the law is a legislative provision of resources in the major areas of scientific and technological renewal of production and service sectors in the country, the needs of society in high-tech, competitive, environmentally friendly products, quality
  • 6. 5 | P a g e services, increase export potential state, the output of competitive high technology products for the global market. Financing Despite the high potential Ukraine from year to year funding cuts its own scientific field. Compared with 1991, when contributions to research were 2.44%, now local researchers have a really survive. It is for the government than to advanced technologies in 2015 to finance the sector allocated only 0.5% of GDP. State funding is one of the main financial instrument sciences, technology and innovation policy economically developed countries, the main form of direct state support of innovative development. Total expenditures of the state budget of Ukraine in 2014 to finance scientific field in 56 major budget programs 32 spending money - customers’ scientific works were: the plan - 5,598,280,000. UAH., including 4,118,040,000. UAH. or 73.6% from the general fund; 1,480,240,000. UAH. or 26.4% - of the special fund; financed - 5,278,520,000. UAH., of which from the general fund - 4,085,260,000. UAH. (77.4% of the planned amount), special - 1,193,260,000. UAH. (22.6%) Analysis of the distribution of total funding scientific sphere by spending units shows that the largest expenditures for funding scientific sphere have five spending units around them accounted for almost 88% of spending (4,639,550,000. UAH). Meanwhile, a 100-point scale in 2012-2014, our country, according to the innovation index, gained 36.3 points. The world leader - Switzerland - received 64.8 points, United States - 60.1, neighbouring Russia - 39.1.
  • 7. 6 | P a g e Add that to the world innovation index takes into account such factors as academic institutions, human capital, infrastructure, domestic market development, business development, innovation and practical results of creative activity The situation with financing is quietly dramatic in Ukraine. The government spent less and less. The graph below – demonstrates these changes: (Slovo & Dilo, 2015) 0,00 0,50 1,00 1,50 2,00 2,50 3,00 1985 1990 1995 2000 2005 2010 2015 2020 FINANCING OF TECHNOLOGY IN UKRAINE % FROM GDP 2,44 1,20 0,82 0,73 0,75 0,77 0,66 0,5 -0,50 0,00 0,50 1,00 1,50 2,00 2,50 3,00 1990 2000 2010 2011 2012 2013 2014 2015 Financing of technology in Ukraine % from GDP
  • 8. 7 | P a g e Institutions Ukraine has a great number of institutions oriented to prepare technical specialists and develop technology and science sector. Despite the fact, that government decreases investments in science and technology, there are thousands of specialists that graduate and work each year. The overall number of technical institutions in Ukraine is 61 from 440 all institutions in Ukraine. Also, Ukraine has 1 academy of science: National Academy of Sciences of Ukraine. The Ukrainian Academy of Sciences, founded in 1919, has sections of physical engineering and mathematical sciences, and chemical engineering and biological sciences; it holds 66 scientific and technical research institutes attached to it. The Ukrainian Academy of Agrarian Sciences has 13 research institutes, and the Ukrainian Academy of Medical Sciences has six research institutes. All three academies are headquartered in Kiev. A botanical museum is situated in Kiev. Ukraine has 92 universities, polytechnics, and institutes that offer courses in basic and applied scientific disciplines. In 1987–97, science and engineering students accounted for 42% of university registration. In 2002, research and development (R&D) expenditures totalled $2,805.687 million, or 1.18% of GDP. Of that amount, the government offered the largest portion at 37.4%, followed by the business sector at 33.4%, foreign sources at 26.2%, higher education and private non-profit organizations at 0.4% each, with 2.3% listed as undistributed. During that same year, there were 1,749 scientists and engineers, and 456 technicians engaged in R&D per million people. High technology exports in 2002 were valued at $572 million, accounting for 5% of the country's manufactured exports (Encyclopedia.com, 2016).
  • 9. 8 | P a g e 2.3 Independence & Transparency The information agency Ukrinform is holding a press-conference, where the Regional Press Development Institute will publish the monitoring results on transparency of 100 websites of higher educational institutions of Ukraine. The monitoring, research was extended out to estimate the quality of informing international citizens as to the admission requirements to higher educational institutions of Ukraine and training there. The monitoring criteria of websites included availability of general data concerning an educational institution and the information needed for admission, training and stay of international students in Ukraine. There was also estimated the fullness of present information, its translation into foreign languages and good access to it. Rule of law Ukraine has made some progress in fighting corruption, but considerable problems persist. The removal of Victor Yanukovych ended the extensive graft by the president, his family, and his closest associates. However, the old oligarchies continue to benefit financially from their close association with top politicians. Even in areas controlled by the national government, the judiciary remains weak, and contracts may not be well enforced. Regulatory efficiency The labour code is outmoded and lacks flexibility. The government influences prices through state-owned enterprises. The IMF reports that 740 state-owned enterprises registered losses amounting to about 1 percent of GDP in 2014 and that, as a group, SOEs have accumulated substantial liabilities amounting to more than 12 percent of GDP.  Business Freedom 56.8
  • 10. 9 | P a g e  Labour Freedom 47.9  Monetary Freedom 66.9 Open markets Ukraine’s average tariff rate is 2.1 percent. Government procurement procedures favour local companies. Foreign investors may not purchase agricultural land, and the investment frame- work remains underdeveloped with other sectoral restrictions. The Russia–Ukraine conflict continues to interfere with trade and investment streams. The large figure of non-performing loans continues to be a drag on the banking system.  Trade Freedom 85.8  Investment Freedom 20.0  Financial Freedom 30.0 2.4 Demographic situation Major urban areas - population: KYIV (capital) 2.942 million; Kharkiv 1.441 million; Odesa 1.01 million; Dnipropetrovsk 957,000; Donetsk 934,000; Zaporizhzhya 753,000 (2015) Due to the complex situation in Ukrainian economy and politic situation there are many people that decided to migrate. The fourth wave - the so-called "migrant" - began in the 1990s. Its main reasons - economic hardship of transition in Ukraine. Some researchers emphasize the deliberate creation of unemployment, mostly - in Western Ukraine. As a result, for temporary work in Europe, America and Russia have left about 7.8 million. People. Some of them probably will not return to Ukraine. According to the director of the Institute for Diaspora Studies (Kyiv) Igor Vinnichenko 2001 lived outside Ukraine 10-13 million. Ukrainian. Due to the fact that outside of their own country was forced to travel under pressure from economic, political and military circumstances active part of the nation, but also because of the
  • 11. 10 | P a g e lack of full Ukrainian state on ethnic Ukrainian lands, in the new EU settlement abroad Ukrainians continued and developed the national government (UNR), political (virtually the entire spectrum of political parties in the Diaspora), social, cultural, scientific and religious institutions. For the Ukrainian diaspora one of the highest social-cultural values was the goal of full restoration of the Ukrainian state. Current demographic situation in Ukraine Age structure:  0-14 years: 15.22% (male 3,480,870/female 3,281,363)  15-24 years: 10.85% (male 2,470,594/female 2,349,313)  25-54 years: 44.63% (male 9,703,407/female 10,126,348)  55-64 years: 13.5% (male 2,563,195/female 3,435,022)  65 years and over: 15.8% (male 2,343,097/female 4,676,262) (2015 est.) Dependency ratios:  total dependency ratio: 43.3%  youth dependency ratio: 21.4%  elderly dependency ratio: 21.9%  potential support ratio: 4.6% (2015 est.) Median age:  total: 40.1 years  male: 37 years  female: 43.3 years (2015 est.) Population growth rate: 0.6% (2015 est.)
  • 12. 11 | P a g e Birth rate: 10.72 births/1,000 population (2015 est.) Death rate: 14.46 deaths/1,000 population (2015 est.) Net migration rate: -2.25 migrant(s)/1,000 population (2015 est.) Education expenditures: 6.7% of GDP (2012) Literacy: age 15 and over can read and write total population: 99.8% 2.5 Most famous people originated and migrated from Ukraine 1. Steve Wozniak One of the founders, perhaps the most famous companies in the world - Apple. His father was born in the village of Krasnaya Dubrava in Bukovina. Two Steves - Jobs and Wozniak - had been friends at school, and when grown in the same together ushered in the era of personal computers. 2. Igor Sikorsky Future genius was born in Kiev. First he gained worldwide recognition in the 24 - his plane "Ilya Muromets" was the record in capacity. Subsequently, the aircraft went to the States, where he opened his own company - Sicorski Air Engineering. He used helicopters armed forces of the United States. And that "birds" Ukrainian engineer first ever flew the Atlantic and the Pacific. Since its planes and helicopters continents together and allowed to overcome the vast distances in a matter of hours. 3. Max Levchin In Silicon Valley in the US, which is famous for its concentration of high-tech companies, has also distinguished us. In his 27 Kievan Max Levchin established payment system PayPal, which now
  • 13. 12 | P a g e enjoys a world. Ukraine left the guy at 16. Today it is one of the most successful and richest programmers Valley. 4. Heidemarie Stefanyshyn-Piper According to the Foreign Ministry press service, American astronaut of Ukrainian extraction HeidemarieStefanyshyn-Piper intends to visit Ukraine after the Atlantis space mission is over. The Atlantis was launched from Cape Canavaral in Florida on September 9 with six astronauts on board. The Atlantis crew includes one Canadian and five Americans, one of whom is Heidemarie Stefanyshyn-Piper. The crew's space mission is scheduled to last twelve days. Heidemarie Stefanyshyn-Piper is supposed to make two out of the crew's three space walks, each lasting about six and a half hours. The American female astronaut has two uncles and two aunts in Ukraine, who are her father's brothers and sisters. 2.5 Current situation with work Currently, there are many Ukrainian professionals and researchers that are looking for opportunities abroad. This is due the current drastic economic situation in country and very low wages on local market. People are willing to work for foreign market, because even if they bit a low rate on the foreign market, they still win at local. Salary in $ is most attractive perspective. Current exchange rates are very unbalanced. Therefore, 1/3 of Ukrainian It professionals are working for foreign market. Now the market has more than 123 000 freelancers from different cities of Ukraine. Most of them work in the IT, in particular - in web development and mobile application development.
  • 14. 13 | P a g e Their number is constantly growing: in 2014 alone, 31 000 new Ukrainian specialists were registered on the platform. In 2015, the company expects growth at the same level or higher. Freelancers who use Upwork, set their own hourly rate. Working for foreign customers, Ukrainian developers may earn $ 20-30 per hour depending on skills, experience and the rating on the platform. Professional developers with a good rating, on average, 25% more than other freelancers (Ain.UA, 2015). 2.6 Organizational/funding reforms that have taken / is taking place Kyiv, October 5, 2015 – Despite a few encouraging signs of economic stabilization seen in July and August 2015, in its new Ukraine Macroeconomic Update the World Bank projects real GDP to go down by 12 percent this year, down from an earlier projected 7.5 percent decline. The macroeconomic policy mix adopted by the authorities proved to be effective in mitigating a much more painful shock on the country’s economy, but the on-going conflict in the east has made stabilization more difficult. Coupled with an unfavourable global economic environment, it has gone to a much sharper contraction in the economy. Ukraine’s economic recovery depends on whether the authorities continue implementing much-needed macroeconomic and structural reforms, even as periodic flaring up of conflict adds troubles. If reforms continue, a gradual recovery is possible starting from 2016. It is anticipated to be driven by net exports, capital investment and privatization. Despite lower GDP growth in 2015, the country’s general fiscal and budget performance has so far been better than anticipated. The current account saw declining pressures and reached a balance earlier this year, but risks confronting Ukraine remain high. To guard against these risks, it is very important that authorities continue with flexible exchange rate regime and
  • 15. 14 | P a g e prudent fiscal policy. They need to redouble efforts at fighting corruption and improving governance. They need to continue reforms to reduce Naftogaz imbalances and strengthen the energy sector’s capacity. In addition, the authorities need to boost confidence in the banking system (World Bank, 2016). 2.7 International cooperation within the sector Ukraine joins Horizon 2020 to work with EU in science and research Researchers, businesses and innovators from Ukraine will now be capable to fully participate in Horizon 2020, the European Union's research and innovation funding program, on equal terms with EU Member States and other associated countries. This is thanks to the Agreement for the Association of Ukraine to Horizon 2020, signed today in Kyiv by Carlos Moedas, European Commissioner for Research, Science and Innovation, and Serhiy Kvit, Minister of Education and Science of Ukraine. Commissioner Moedas said: "I merely pleased to welcome Ukraine into our EU research funding program Horizon 2020. Ukraine has chosen to invest in its cognition and in its people. Chosen to contribute to the common goals of the broader science and technology community. Ukraine's great research and innovation potential offer promising partnerships in Europe. And Ukraine will now have access to the entire spectrum of activities funded under the Horizon 2020, helping spur its economy. I hope Ukraine will make the most of these chances." Horizon 2020 is the first EU program in which Ukraine has chosen to participate following the beginning of provisional application of the EU-Ukraine Association Agreement. This association to Horizon 2020 highlights that both the EU and Ukraine consider research and innovation crucial for economic development and the creation of jobs (Europa.eu, 2015).
  • 16. 15 | P a g e The agreement opens a wide orbit of new opportunities to Ukrainian research institutions, universities and businesses across the whole research and innovation, value chain, from fundamental research up to close-to-market activities. For instance, Ukraine will now be capable to host European Research Council (ERC) grants, apply for financial support to innovative SMEs, benefit from support for scientific excellence and other research policies and participate in the governance structures of the program (Europa.eu, 2015). Background With a budget of almost € 80 billion for 2014-2020, Horizon 2020 is the largest multinational program dedicated to research and innovation. In its predecessor, FP7, Ukraine was one of the top ten most performing third countries, with a total number of 274 successful participations in a sum of 207 retained proposals. The top five priority areas with retained participation from Ukraine have been an environment (including Climate Change); tape drive (including aeronautics); Nanosciences, nanotechnologies, materials and new production technologies; food, agriculture and fisheries, biotechnologies; and space (Europa.eu, 2015). Today's agreement will need to be ratified by the Ukrainian Parliament to enter into force, but Ukrainian legal entities can already participate in all Horizon 2020 actions funded under the 2015 budget, as this association covers the years 2015-2020. Ukraine has also requested association to the Euratom Research and Training Program but negotiations need to trace a separate track (Europa.eu, 2015). 2.8 History of development after 1990 In the field of science in general in Ukraine pose great difficulties, low level of funding, the crisis of production and lean enterprise demand for scientific development. This resulted in insufficient logistical and personnel support of scientific institutions, which have received
  • 17. 16 | P a g e almost no modern devices and computing. Some institutions have lost 50-60% of their employees who left the country or moved to other areas. Already in 1994 it was known that in western countries have gone from Ukraine to thirty thousand. Scientists, mainly from natural and applied sciences. As a result of a decline in the prestige of scientific work decrease professionalism scientists' reluctance of young people to enter the graduate school there and the lack of competition. This situation does not give hope for a quick exit from the crisis, Ukraine, although many scientists working in this direction. In the mid 90's gradually changing attitude to fundamental research in the institutes of NAS of Ukraine develop its relations with some foreign research institutions. In 1996-1997 pp., After the establishment of the structure of government in the Ukraine special Ministry of Science, headed by Academician Semynozhenko, the work of many scientific institutions activated. Dynamically developing Humanities, new institutions, new research directions. In particular, the Institute established Ukrainian, Institute of Oriental Studies named after A. Krymsky Institute of World Economy and International Relations, Institute of Sociological Studies et al., Mainly as part of the NAS. In 2001-2003 pp. There is some increase in funding for research, new developments in the space industry and others. 3. TECHNOLOGY TRANSFER AND COMMERCIALIZATION IN UKRAINE 3.1 Current situation In modern Ukrainian law the concept of "commercialization" is not exciting at all, but for, it is used as the phrase "intellectual property to attract economic exchange." It is believed that the commercialization of the technology is the final stage of transfer of technology. However, some scientists believe that the commercialization of the technology is the same as the commercial transfer or transfer should be seen as a way to implement commercialization.
  • 18. 17 | P a g e According Methodical recommendations on commercialization developments created as a result of scientific and technical activity, approved by the State Committee of Ukraine for Science, Innovation and Informatization of Ukraine as for 13 September, 2010, commercialization development mechanism (technology) for enterprises and institutions of the state form involves the following steps: 1) technological audit; 2) market research; 3) economic audit; 4) obtaining protection; 5) promotion; 6) contract. Below, there is a frame of commercialization of technologies in Ukraine: The focus in the process of activation of commercialization is paid to the relationships and information exchange between the participants in the innovation process. Therefore, in Ukraine there is a need to create a network of agencies transfer and commercialization of Methods of commercialization technology Transfer of rights to development(IPR) Adding to the IP rights to the authorized capital of the company The transfer of rights to use IPR Under licensing agreement Under the contract commercial concession (franchise) Under the lease agreement Transfer (assignment) property rights to IPR Use in own production
  • 19. 18 | P a g e accession to international agreements and national patent data banks. Currently operating a number of state agencies that have access to a significant amount of scientific, technical and economic information including: Research Institute of Intellectual Property, the State Statistics Committee, Ministry of Education, Science, Youth and Sports of Ukraine, Association of Inventors and Innovators, DC Science, Innovation and Information, centers of scientific and technical information, etc., whose function is to provide information and consulting services to business entities on the possibilities of new technologies and attract the necessary resources and participate in the implementation of innovative projects. In the area of commercialization of research activities in developed countries, an interest on the part of the various structures, networks. The main transfer networks include:  Enterprise European Network (EEN) - has been established as an integrated network of support services business, based on the experience of two networks of 270 Euro Info Centers (EIC) and 250 Innovation Relay Centers (IRC), whose work ended in December 2007. Program CIP - Competitiveness and Innovation Program - improving the competitiveness of enterprises and innovation development (budget of 3.621 billion. euro period - 2007-2013.)  Russian Technology Transfer Network RTTN - was established in 2002 initiator of the Russian technology transfer network by the Ministry of industry, science and technologies of the Russian Federation with the support of TACIS “Innovation centers and science cities”  Ukrainian Technology Transfer Network - establishment of technology transfer centers network UTTN, certification participants and partner network UTTN, organization of international cooperation
  • 20. 19 | P a g e So, as a conclusion it noted that the commercialization of scientific and technical activities (IPR), in terms of increased competition and accelerated NTP, is a major and important areas of innovation for both companies that want to gain a competitive advantage in business, and for inventors and scientists who want to bring to the final stage of his intellectual product and get a reward. 3.2 Problems of commercialization Analysis of the statistics shows that the high-tech sector Ukraine faces a number of problems. State Agency for Science, Innovation and Information revealed problems high technology sector and has concluded that despite the fact that Ukraine remained a major research institution, science and technology and innovation does not play properly as a source of economic growth, the pace of development and the structure of science, technology and innovation sphere do not meet the growth of demand for advanced technologies; show low the susceptibility of the business sector to innovate; occurring loss rate and reduce material and technical means in science and technology and innovation. The main reasons for these problems are: 1) reduction of state financing of R & D and innovation sector; 2) the ineffectiveness of the system of budget financing of Ukrainian science:  The system is not configured to obtain the final result of application; 3) legislative restrictions that complicate the financing of scientific areas:  Because of the complicated procedure of servicing the State Treasury special accounts, including the activities funded by public research institutions and
  • 21. 20 | P a g e universities educational institutions, customers, including foreign, often refuse cooperate with these institutions;  Government customers research and development work (R & D) in addition to a competitive selection procedure have to use competitive bidding in the implementation of public procurement 4) lack of economic entities of economic incentives to carry out technological modernization by introducing new scientific and technical developments. 3.3 Recommendations Having analysed the experience of developed countries, initially improve technology sector can also recommend distinguish high-priority industries and focus on their development. It is necessary to strengthen state support to priority high-tech industries and encourage their funding. To do this on the level of government- improve the regulatory framework to facilitate the development of investment in the industry. It is necessary to involve Ukrainian and foreign scientists for the development of these industries, enable researchers to realize their works and inventions in practice. That should enhance the interaction between scientists and entrepreneurs. It is also a useful introduction tax incentive to companies that invest in the creation of high technologies. Initially, improve technology sector Ukraine is also an important condition for attracting foreign investment in this sector. It is necessary to take measures to improve the investment attractiveness of the sector. Research in the field of high technologies should be focused on the development of domestic production of high-tech products, state support of high technology sector and investment in the sector (particularly foreign).
  • 22. 21 | P a g e 3.4 Conclusion So, today Ukraine has enough high scientific potential, a significant amount of the IPO, retains a significant amount of high technology in the aviation and space industries, IT technologies, shipbuilding, etc., but has significant problems with the commercialization of scientific and technological development and transfer nearly all industries. To solve these problems requires consolidation of the efforts of both public institutions, legislators and representatives of business and production sector, universities and research organizations. 4. ANNEX 1 - INFORMATION ABOUT THE ACTORS WITHIN THE SECTOR AND THE RATING OF THE INSTITUTES/UNIVERSITIES List of TOP technical institutions: # University Field City Website 1 Kharkiv National University of Radio Electronics Radar Technology Kharkiv http://www.univer.kharkov.ua/en 2 National Aerospace University "Kharkiv Aviation Institute" Space Technology Kharkiv http://www.khai.edu/ 3 Kiev Polytechnic Institute (KPI) Multiple Kiev http://kpi.ua/ 4 Kharkiv Polytechnic Institut Multiple Kharkiv http://www.kpi.kharkov.ua/en/ 5 Vinnytsia National Technical University Multiple Vinnytsia http://vntu.edu.ua/ 6 National Metallurgical Academy of Ukraine Material Science Dnipropetrovsk http://nmetau.edu.ua/en 7 Poltava National Technical University Multiple Poltava http://pntu.edu.ua/uk/ 8 National Mining University of Ukraine Mining Dnipropetrovsk http://www.nmu.org.ua/ 9 Donetsk National Technical University Multiple Donetsk http://donntu.org/ 10 Lviv Polytechnic Multiple Lviv http://lp.edu.ua/
  • 23. 22 | P a g e List of private technical institutions: 1. KIBIT (Kiev Institute of Business and Technology) Website: http://kibit.edu.ua/ City: Kiev 2. ITSU (Academician Yuriy Bugay International Scientific and Technical University) Website: http://www.istu.edu.ua/en/ City: Kiev Other institutions by industry: Space Technology City Website Kiev Polytechnic Institute (KPI) Kiev http://kpi.ua/en/node/7242 Oles Honchar Dnipropetrovsk National University Dnipropetrovsk http://www.dnu.dp.ua/ Zhytomyrskyi viiskovyi instytut im. S. P. Korolova Zhytomyr http://zvir.zt.ua/ Zaporizhzhya National Technical University Zaporizhzhya http://www.zntu.edu.ua/ Oil & Gas Technology Zhytomyr State Technological University Zhytomyr https://ztu.edu.ua/ Ivano-Frankivsk National Technical University of Oil and Gas (IFNTUOG) Ivano-Frankivsk http://nung.edu.ua/ National Mining University (NSU) Dnepropetrovsk http://www.nmu.org.ua/ Institute of Refrigeration, and cryotechnology Ecoenergy (IHKE) Odessa http://onaft.od.ua/Pages_cat_44.html Material Science MRC Kiev http://mrc.org.ua/ Institut for Problems of Material Sciences NAS of Ukraine Kiev http://www.materials.kiev.ua/ Medical technology Kyiv Medical University UANM Kiev http://www.kmu-kyiv.com/ Kyiv International University (KIU) Kiev http://www.kymu.edu.ua/language- english/ International Humanitarian University Odessa http://www.odessa-education.com/en/ Applied Mathematics Taras Shevchenko National University of Kyiv Kiev http://www.univ.kiev.ua/en/ Ivan Franko National University of Lviv Lviv http://www.lnu.edu.ua/
  • 24. 23 | P a g e National University of Kyiv-Mohyla Academy Kiev http://www.ukma.edu.ua/ Radar Technology none Cryptography National University of Kyiv-Mohyla Academy Kiev http://www.ukma.edu.ua/ Kiev Polytechnic Institute (KPI) Kiev http://kpi.ua/en/node/7242 Kharkiv National University of Internal Affairs Kharkiv http://univd.edu.ua/ Electronics Kyiv National University of Construction and ArchitectureKyiv Kiev http://www.knuba.edu.ua/ Ukrainian State Chemical Technology University Kiev http://udhtu.com.ua/ Chemistry Ukrainian State Chemical Technology University Kiev http://udhtu.com.ua/ National Pedagogical Dragomanov University Kiev http://www.npu.edu.ua/index.php?lang =en 5. ANNEX 2 - LIST OF SUCCESS STORIES IN COMMERCIALIZATION OF TECHNOLOGY 1. Preply (link) - an online search service of a foreign language tutors. The site launched in April 2013 since then, he has undergone several milestones. In July, the team went on acceleration in the Berlin branch of the incubator TechStars and received a $ 120,000 investments. 2. Kwambio (link) initially is an online platform on which designers can upload their 3D- projects, and users - to change their appearance to your taste and print on their devices. However, in February he changed the model and became an online store: Now Kwambio offering designer goods, printed the 3D-printer-made ceramics and metals, including precious. 3. LifeTracker.io (link) - PDNA is the first project of the company, which is working to create a symbiotic artificial intelligence. While this is a mobile app for iOS and Android, but in the future
  • 25. 24 | P a g e product plan to combine with all possible interfaces, including - the internet of things. In January 2016 the project attracted investment company Digital Future of EUR 200 000. 4. Wishround (link) - online service fulfilment of desires, which launched two ex-employee Terrasoft. The site can fill out a form and create any wish and start collecting money on it. The service already has many large clients in Ukraine: Citrus, LeBoutique, SuperDeal, Repka.ua. He also recently became a form of payment at online stores. 5. Sale Looksery (link) - an innovative platform that allows you to edit photos and video selfie in real time, for $ 150 million was the main event of the 2015 Uanete. Now Looksery as a separate project does not exist, the application is long gone in the App Store, it became part of the project Snapchat Lenses. 6. Competera (link)- it rial-time service that helps online merchants daily set prices corresponding to the market realities. Start-up is focused on the global market with clients from the CIS, England, America and even Australia. 7. Ecoisme(link) - a system of home energy management, and the most "prominent" in the startup UA internet. The children regularly receive awards at various exhibitions abroad. And in March of this year, hit the accelerator Ecoisme Richard Branson and attracted investments from two business angels - Nick Belogorskogo and Sergey Povzner.
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