Ukrainians visit Web Summit with eyes to an Odessa tech hub
Vibrant Black Sea port of Odessa aims to become regional IT hub
Governor of Odessa Mikheil Saakashvili is determined to make Ukraine’s largest region, a model of liberal reform. Photograph: Alexey Kravtsov/AFP/Getty Images
Ukraine’s potential to become a new European hub of internet innovation was a feature of the Web Summit last week, where nine of the embattled country’s start-ups showcased its dynamic tech community.
The country’s IT sector has continued to grow despite two years of turmoil that have seen Ukraine endure a pro-western revolution, Russia’s annexation of Crimea and a Moscow-backed insurgency in eastern regions.
The upheaval is far from over, but the country’s pivot to the west, the urgent need to modernise the economy and the partial removal of the old elite has given impetus to a new generation of politicians and entrepreneurs.
In the vanguard of change is the Black Sea port of Odessa, where Readdle has earned a reputation for creating outstanding productivity apps for the iPhone and iPad, and now a social network start-up called Yeed hopes to earn similar acclaim.
Yeed is a mobile app that allows locals and visitors to quickly find events and entertainment taking place in a city, and to see who is attending and invite friends along – and a Dublin version was launched especially for Web Summit.
“Our app connects events and social media to bring people together – it brings people out of the virtual space and into the real world.”
Other Ukrainian start-ups coming to Web Summit range include Terminal FX, which creates special effects for movies and advertising, and microfinance firm Moneyveo – highlighting the diversity of products being developed by the country’s tech talent.
Quality algorithms and code
“Historically, our programmers had to work with outdated hardware lacking processing power and speed, thus programmers had to write very effective and extremely optimised code,” Khodorkovsky explained.
“Nowadays, the hardware and technologies are up to date, but the good habits of creating quality algorithms and code remained.”
With pro-western politicians now running Ukraine and major backing coming from the United States and European Union, Khodorkovsky and many others believe the country’s IT sector – which is worth more than €4.5 billion annually – can help drive economic recovery for the nation of 45 million people.
“For over a decade Odessa and Ukraine have been outsourcing IT talent to the world. There are many large, well-managed development teams located in Odessa, producing quality products for elsewhere, but not for our country,” said Khodorkovsky, who returned to his homeland after studying in Canada.
“Ukraine first of all has to learn how to use this human-resource potential for its own development.”
It is a sentiment shared by the new team running Odessa region – governor Mikheil Saakashvili, the former president of Georgia, and his adviser Sasha Borovik, a Ukrainian-born lawyer who studied at Harvard before moving to Silicon Valley and becoming an executive at Microsoft.
They are determined to make Odessa, Ukraine’s largest region, a model of liberal reform, by sweeping away the old guard and its deeply-rooted power structure characterised by corruption, cronyism and stifling bureaucracy.
The reforms they advocate – including a massive privatisation programme and tax overhaul – go beyond what Kiev is so far wiling to implement nationally, however, causing friction between Saakashvili’s team and the government.
“They are working hard. No one could change everything that needs changing here in just a few months,” said Khodorkovsky.
“Odessites sit on the couch and complain . . . But Saakashvili’s team expects activity on the part of local business too – they won’t do everything for us, just so we can reap the rewards. We need to change together with the system and not wait until someone will change the system for us.”
Saakashvili and Borovik face huge challenges in transforming Odessa and persuading the Kiev government to enact the radical reforms that they propose.
Borovik was soundly beaten in his bid to become mayor of Odessa last month, by a candidate that Saakashvili says represents “old Ukraine” and whom he claims used huge election fraud to retain control of the city – where many powerful business and political figures retain close and lucrative links with Russia.
By attracting reform-minded Ukrainians – and foreign firms – to Odessa, however, Saakashvili, Borovik and their supporters hope to create a critical mass in the city and region that reactionary and pro-Russian forces will be powerless to resist.
“Now we have a team in power in Odessa region that thinks the same way as young entrepreneurs, and can promote Odessa on a global scale,” said Khodorkovsky.
“The potential for software developers in Ukraine is huge. Odessa can be in the forefront of that,” he added.
“It’s an exciting and talented city, but for a long time many of its best people only became renowned elsewhere. IT is changing that – now we can produce something great, hopefully be successful, and stay in the city that we love.”