On August 19, the government supported the resolution that would allow men of conscription age to go abroad on a business trip, provided that the trip lasts seven days, with a deposit of UAH 200,000 per person. Companies that employ less than 10 people with an official salary of less than UAH 20,000 cannot use the initiative.
“In general, we consider the initiative to be a compromise solution in the conditions of war. We hope that the Prime Minister did not sign this resolution because at the stage of finalization, some nuances appeared, due to which the initiative does not solve the tasks assigned to it,” says Stepan Veselovskyi, CEO of the Lviv IT Cluster.
Drawbacks of the initiative
One of the main disadvantages is the length of the trip: seven days is too short a time for business trips to certain countries. According to the IT Research Resilience study: The impact of war on Ukraine’s IT development, 67% of companies operate in the foreign market, 30% in the mixed market and 3% in the Ukrainian market.
“Seven days are enough for visits to European countries. At the same time, traveling to the US or Australia often requires at least 12-14 days, given the logistics and plans to meet with a few clients in one trip. Face-to-face communication allows both to attract new clients and increase the scope of cooperation with existing ones, agree on future plans and sign contracts. Without regular meetings, the level of trust in the service export-oriented business drops and, as a result, the volume of cooperation decreases,” says Ihor Vershynin, CEO of Vector Software and member of the Lviv IT Cluster’s Supervisory Board.
IT representatives are already observing a decline in export revenue from the tech industry. Everything is moving towards a less optimistic forecast, which was modeled by the Lviv IT Cluster during the IT Research Resilience study, adds Stepan Veselovskyi:
“According to the latest NBU data, it is noticeable that export revenues from IT are decreasing: $601 million in May, $564 million in June and $542 million in July. If the current dynamics continue, then at the end of the year the industry will reach a not very optimistic figure of $7.2 – $8.1 billion for 2022. Therefore, the possibility of international business trips would have a positive effect on the situation and possibly increase the chances of improving revenue figures to our more optimistic forecast of $8.1 – $8.5 billion for 2022.”
“It is unfortunate that the problem of short-term business trips does not seem critical for officials, although it is indeed a significant restraining factor for the possibility of development and growth of companies. And for some, even a risk for further existence. But I still believe in the common sense of the country’s leadership and that in the near future a positive decision will be made on the initiative or some healthy alternative to it,” adds Ivan Babichuk, Supervisory Board Chairman of the Lviv IT Cluster, VP Engineering, EduNav.
What the IT industry offers
Representatives of Lviv IT Cluster point out that perhaps it would be worthwhile to introduce the initiative in the form in which it was presented. This would enable exporters to already use this mechanism.
“There are things where you need to be present, demonstrate your business and attract new customers. I mean personal contacts. You can postpone a trip for a certain time, but at some point you have to meet up with clients in person. Therefore, it is critically important for us that our colleagues can travel abroad. Putting this initiative on hold may have a negative impact on business. Although the IT industry is technological, there are always people behind it,” says Yuriy Adamchuk, СЕО Avenga and member of the Lviv IT Cluster’s Supervisory Board.
It is important to finalize the initiative, taking into account the opinions of those representing export industries, so that it works even more for the interests of the Ukrainian economy in the conditions of war.
In order to strengthen guarantees that the initiative will not be abused, it may make sense to increase the amount of the deposit to, for example, UAH 1 million, Ihor Vershynin suggests:
“The deposit can be paid by the company that sends the specialist on a business trip. Then companies will have an incentive to send specialists on business trips only when it is really necessary and only those who they are sure will return.”
The government returned the resolution to relevant ministries for finalization.