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Hi, I'm Dmytro Shvets.

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Your host at the Start Global Insights, where I interview local experts in different countries

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about local insights and international expansion experience.

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This time we are going to talk how governments support exporters and my guest today is Andriy

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Litvin, a deputy director of entrepreneurship and expert promotion office of Ukraine.

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Hi, Andriy.

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Hi, good afternoon.

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My name is Andriy Litvin.

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I'm the deputy director of the state institution entrepreneurship and expert promotion office

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of Ukraine.

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And mainly I'm responsible in this office about expert activities of our governmental

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institutions, namely the education, consultancy, analytics and partner search.

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Andriy, I remember how more than 10 years ago we have been to Kiruna in Ice Hotel.

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This is in the far north of Sweden.

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And we met there an owner of the Ice Hotel and he told us a story how it all began.

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And he said that they were sitting in the middle of nowhere because Kiruna is actually

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almost the North Pole with some local guys and they were chatting how they could attract

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more people to this cold and unfriendly region.

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And as they had plenty of ice, they've got an idea to sell the ice.

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So to build a bar, an ice bar completely of ice and to export it to other countries.

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Then they just were thinking how to do that.

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And they contacted the Swedish expert promotion office.

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And as they contacted soon, they opened ice bars in several countries, like in Canada,

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I think, in New York, I believe, and also in Tokyo, what was the most amazing for me.

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And they began to export ice blocks from the nearby river to build this ice bars.

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And in other countries.

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And at that time, I saw that I would wish that one day we would also have such an organization

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in Ukraine.

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And at that time, it was almost impossible.

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And then suddenly, the expert promotion office appeared.

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Yeah.

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So could you tell us a bit the story, the short story of its creation?

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I remember that that was first not the part of the governmental organization.

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Yeah.

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A great case, actually.

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And I was dreaming about the two because I used to live in Poland.

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And I saw how the Polish organization works with almost 40 offices abroad.

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And it was like my dream to have such an office, such an institution in Ukraine, which will

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be responsible for the expert activities and promote our products and services.

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Basically, the story began in, if I remember, in 2016, when the international partners of

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Ukraine, like Canadian, European, they started to worry about Ukrainian experts.

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They were interested in Ukrainian products and services.

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And there were a few projects which started to fund and provide financial aid to organize

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such an office and hire consultants.

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Okay.

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So mainly, we invited a lot of consultants from different countries and also involved

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Ukrainian experts from the project management or consultancy directions and provided, like

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developed such services like educational courses, like consultancy, like analytics, and also

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the most important department search.

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Because before the 2014, the main markets for Ukrainian companies, they were like Russia,

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Kazakhstan.

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So nothing in common with the European certification, license, restrictions, et cetera, et cetera.

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And it was really hard to understand how to help Ukrainian companies diversify their markets

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and mainly to the European Union and Canada, United States, Middle East.

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So yeah, and after we proved our efficiency in 2018, this consultancy body was restructured

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to the state institution, which was funded, started to be funded by the government.

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And also in 2020, we started the process to add in this entrepreneurship.

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So we divided into one project, one institution, which is responsible for both activities.

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Okay.

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But in fact, this is not a very bad idea because to my opinion, yes, the entrepreneurship is

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very tightly connected to the global markets.

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Because if you are going to global markets, you are acting like a startup because you

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have like everything new, new clients, new markets.

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You need to make new hypothesis and check them like in startups.

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So the general approach could be the same.

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Our idea is that anyone could start their own business, develop it and became an exporter.

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So because now during the war, based on our surveys, more than 40% of Ukrainian businesses

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would like to export and start their export activities.

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Now Ukraine is known anywhere and Ukrainian products, really they're cool.

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I mean, you cannot find something similar in the world if you're talking about different

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products, about craft production and so on and so on.

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Cool.

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But you said that when you were creating the office, you have been researching different

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other types of other countries' organizations.

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Is there kind of a benchmark in the world of expert promotion offices or trade promotion

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offices in the world?

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Who are the best?

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Really difficult to choose one.

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But for example, for me, from my point of view, the Irish one is the best.

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And I think, and I heard a lot from the different TPO's from the European countries that they're

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also thinking that the benchmark is the Irish TPO.

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And they're collecting information from them about their procedures, about their services,

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and then trying to develop something similar, but for the internal audience.

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When I consult companies, so when I tell them where to search for information, I always

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suggest them to go to the expert gov, the US trade promotion organization, because they

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have a lot of valuable resources.

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So, dedicated to the US exporters, but in fact, anybody can use it.

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I suppose that we also have this type of data that can be used from abroad.

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Now we are providing analytical reports about some sectors, focused sectors for the Ukrainian

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economy and for us based on also surveys and analytics.

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We are providing the reports, the trends, main markets, which could be the best option

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for Ukrainian companies.

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Our main idea and our plans for the next year is to communicate the database and the expert

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gov UA.

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So, the information could be updated in the real time.

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So, any company, we would like to create such kind of dashboards with the database from

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the Euromonitor, for example, with the updated information or Statista.

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So, the Ukrainian companies could search anything they would like.

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It's like an open data and find anything they want.

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We used to made it with Ukrainian information platforms.

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For example, at the DIA business gov UA, you can find analytics in Ukraine about the sectors,

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about the new entrepreneurs, any information.

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And it was created especially for the governmental institutions for the decision making and for

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flexibility.

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I heard that as far as I know, the DIA business got some great award in Europe or even in

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the world for digital tools.

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Yeah.

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To be honest, our international partners are already asking about the platform, about the

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tools we are providing because they would like to provide involved with the systems.

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Ukraine now is the top of digital changes in the government.

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For example, the Minister of Digital Transformation, they're already helping Estonian partners

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to provide like DIA in their country.

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But as we know, Estonia was one of the top digital countries in the Europe and the world.

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But now, Ukrainians are helping them to provide such systems internally in their institutions.

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Yeah.

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The country that gave the birth to the video conferences, the Skype creators.

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I also remember that our Estonian partners also something like more than 10 years ago,

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maybe 15, they were like saying to me that, hey, you see, we can register a company from

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our laptop within five minutes and you cannot do it.

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And now we can do it.

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But we also can do it better than Estonians.

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That's interesting.

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And the more important to close the entrepreneurship also to end the...

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Yeah, this is very important.

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Yeah.

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To open the company is not a big problem, but to close the company, this is a big one.

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Coming back to the expert, I know that you are doing a lot of job now.

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Yeah.

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So you're helping companies to go abroad.

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You are making a lot of trade missions, looking for the partners abroad.

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What are the main obstacles or the main challenges now for Ukrainian exporters to go abroad?

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Yeah.

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The main one, the first is financing.

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So export is a long-term game.

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It's not a cheap activity to start an export, to promote company, to visit exhibitions,

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to present their products, to develop new products, to adapt it to the regulations,

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to get certification, licenses.

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And they are making mistakes, choosing not the right markets, choosing not the right

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exhibitions, choosing not the right partners.

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So it costs a lot.

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And also the additional problem, also based on our mentality in Ukraine, for example,

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that our companies, they don't want to export together with another companies from Ukraine,

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because it's really difficult for small business to find a great partner.

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For example, the main market for Ukrainian companies based on our service, the focused

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market for them is the United States.

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And they all think that it's easily, this is the best choice, because after the United

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States, the European market, the Middle East, they will be open for them.

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But they don't understand, for example, that the small business or medium-sized business,

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they don't have a capacity to go into big retail chains or supermarkets in the United

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States.

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And to do this, they should work with another companies in Ukraine, with their competitors

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in the internal market.

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Yeah, it will be cheaper and easily if you go in connection with someone and you divide

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the financial costs, you are sharing your experience.

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Take an example, yeah, we have a lot of textile manufacturers in Ukraine, which are working

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for the European huge companies like Hugo Boss or something like that.

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And for example, they're supplying some ingredients or if may call it from abroad.

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Also, it's possible to manufacture it in Ukraine internally, but they should invest some money

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in Ukraine.

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So, the best option is, for example, that five or ten companies, they're working together,

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they're sharing the costs, they're building this manufacturer, and then they're using

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it.

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Two episodes before, we were talking with a Romanian expert and he said that Romania

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has the lowest level of trust in Europe, and I believe that we are close to the Romanians.

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So, this is the mentality of low trust to each other, but I think that now it is changing

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dramatically also because of the war, because we are helping each other also heavily.

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But this is also about the long-term thinking, so the long-term investments, so not to have

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the profit, and this is because of the instability.

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So people are not accustomed to live in the stable world, like Europeans, for example.

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Yeah, like my colleague says, some CEOs, they would like to invest in the exhibitions, and

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other ones, they're buying new Toyota Land Cruiser.

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Yeah, if I remember, two years ago, I had a meeting with German cluster of the aircraft

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cluster.

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So, the cluster which is joining a lot of companies, which are producing some parts

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for the small planes.

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So the one company is responsible for engine, the other one for IT, the other one for something

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else, they're cooperating together.

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And this is a great idea because they're working quite long, they have some internal atmosphere,

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they trust each other, they're feeling quite good.

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The cluster is responsible for the lobby, everything works.

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You know, I think that it takes time.

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So I totally agree with you.

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So I see the same situation with all companies that I work with.

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But because of the struggles, we also have this muscle of innovation.

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We have a lot of struggles, and that makes us to be innovative, to be resilient, and

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to be innovative.

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And that's why when you're talking to some European organizations, your ideas are like

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for you is very simple.

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But for them, this is something innovative because they didn't even think about that

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because they are living in the stable and normal situation.

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So they're just not motivated to do some stuff.

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I usually, I'm looking not huge companies in Ukraine to understand the situation of

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the business environment.

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I usually look into small businesses, like up to 10 or 20 people.

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And I see when I see this creativity, the efforts also when I see that they are exporting

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their products or they're selling it on the marketplaces is great.

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Yeah, I mean, the European companies, they're not ready for that.

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They are trading like the local market in the city or in the region, but Ukrainian companies

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with 20 people, they're selling internally in Ukraine and also sending their products

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abroad.

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It's amazing.

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How do you support this small and medium enterprises when they're going abroad?

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Mainly the main difference of our institution that we call the company, our client.

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So we are working with them based on some businesses regulations.

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So they are our client and the client have the rights.

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So mainly we're asking them to fill the form to understand their readiness.

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So the form mainly was created based on the Canadian best practice.

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It's like 38 questions.

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After that, we understand on which stage of the export activities companies.

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After that, for example, if the company is a beginner, they don't have export, they're

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just starting.

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So we have some educational courses for them from what they should start, what they should

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read, what they should understand, et cetera, et cetera.

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Also we have some courses for companies with some experience, but they are divided into

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sectors.

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So those courses are niche courses.

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We are providing such courses in cooperation with the Estonian Marketing Institute and

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we have experts, foreign experts for such courses.

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And during those courses, this is a long-term courses for eight or nine months with practical

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cases.

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For example, if anyone, any company would like to participate, they should understand

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that they will have to do their homework.

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For example, it's divided into modules and during the each module, the participants should

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find Ukrainian company, small or medium sized businesses and work with them.

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For example, the one module is divided and the main topic is analytics.

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So they should find their client and free of charge provide the analytical services.

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So to investigate the market, to prepare the report, et cetera, et cetera.

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So those courses are practical.

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Unfortunately, they are also expensive.

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So those courses are financed by international partners.

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The second way of our help is consultancy.

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For example, we have individual consultations.

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We are talking with the company.

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We have individual meetings when we're trying to understand where they have some gaps and

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where the problems occur.

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For example, to understand probably they chose the not like the best option of the market

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for them.

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And also this is going in connection with the analytical department because they analyze

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in markets, the products of this company and the markets abroad.

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Also there are a lot of analytical services.

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There are some of them automatically provided on our website, expert.gov.ua.

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Any company should find the criteria, the regulations, the governmental or non-governmental

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barriers on the website.

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And another, we can prepare the report, analytical report for the companies based on their request.

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For example, if any association or the group of companies, they have a request to analyze

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five or six or 10 markets, they don't understand which one is the best for them, where the

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products will be competitive with the local producers.

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So we could help with them.

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We analyze in those markets.

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We are searching the information using our databases, like open data and also databases

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which are paid.

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And after that, partner search.

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It's also exhibitions, trade missions, the catalog of Ukrainian companies.

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And our huge dream is to have a Ukrainian brand like making Ukraine and to promote this.

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Talking about this partner search or these trade missions, you are making quite a lot

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of them.

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So you are organizing everything.

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So you're looking for the exhibition itself.

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You are paying for the booths and then you are finding the potential customers for the

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booths.

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How well does it go and what could be done better?

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So mainly we are providing services to the food sector, food and beverage, organic sector,

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IT, machinery, creative industries like lighting industry, furniture.

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So those are the most important, but we're also helping another one like medical equipment.

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So this is not a problem.

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We are looking for such exhibitions.

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Those days we had an opportunity to ask the organizers to provide something free of charge

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or with a discount.

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So this was the main way to cut the costs.

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So we have a lot of activities before the exhibition or any trade mission.

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For example, before the trade mission, we have some courses, not like courses, workshops

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about negotiations or presentations of the companies.

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So we're teaching them how to present the company, how to prepare the materials in the

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correct way, how to provide negotiations like one by one, how to sell your products, how

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to make it attractive.

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From our side, the exhibition for the prepared companies is the most efficient way and also

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trade missions.

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Yeah.

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Nowadays trade missions are really difficult to organize because it takes up to four months

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just to prepare.

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And it's really difficult to do it in Ukraine with some problems with electricity, internet

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connection.

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Based on our statistics, if for example, 10 companies participate in the trade mission,

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three of them will have contracts after the first time, after the first coming to the

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country.

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And if you're talking about exhibitions, it's like statistics are the same, but the amount

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of the contracts is bigger.

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What is the most efficient during these events?

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From our experience, this is about promotion.

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Like, you know this company, MHP, the biggest Ukrainian company and also...

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Paltry, Paltry producer, yeah?

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So they, for example, from our conversations, they don't need new clients on Middle East

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market, but they're participating each year on the biggest exhibition.

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They're paying for this gold partnership at the exhibition, so their logos are everywhere.

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It costs a lot of money.

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And that's all.

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They like making this kebab on their stand and presenting their companies, but they're

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not looking for the partners.

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This is more like a brand awareness thing, yeah?

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Yeah.

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This way, yeah.

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But for small and medium sized businesses, I would recommend to participate in some niche

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exhibitions, divided into concrete products.

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For example, we had an exhibition for organic producers, Nordic Organic Fair.

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It's quite small exhibition in Europe, but one company is even during the exhibition

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signed the contract.

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What do you think is the difference between this type of communication with your potential

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clients and remote one?

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So like sending the samples via post and communicating via emails or video conferences.

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Why this is so important to be in the place and meeting them physically?

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This was the main problem during the COVID-19.

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And the main problem is trust.

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I had a case with the Ukrainian IT company, which companies which are mainly working online,

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yeah?

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The CEO of the company has one rule that he will not sign the contract if the potential

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buyer will not come to Ukraine to see his office, his people and to talk with them.

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So after that, I just asked, what is the statistics?

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Because he paid everything.

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So he's inviting and he's paying for the flying for accommodation for everything.

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And I just asked, what is the statistics?

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Where is the result?

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He said that no one get back from Ukraine without the contract.

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From your experience working with so many requests from many industries and many directions,

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how do you think what countries are the most difficult to enter?

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I think that Asian countries, they are difficult because of the cultural difference and because

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they don't know about us.

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They know only like sunflower oil or something like that.

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They used to buy.

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Commodities, yeah.

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Commodities mainly, but they don't heard about Ukrainian products with added value.

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Like Indian probably heard about IT, but they don't know about anything else.

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Japan, for example, yeah, also, it's really expensive market to enter.

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So those markets are difficult for Ukrainian companies, like small and medium sized.

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They extremely difficult for the bigger one.

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It's could be okay for them to diversify.

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I know that Ukrainian huge companies, they're working with Chinese, with Japan also.

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Also I will not talking about the United States and Canada.

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It's everything is clear.

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Those markets are quite difficult, but it could be.

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This goal could be achieved.

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If you prepare all the documents, everything is clear with the company.

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So you could find a partner, but the difficulties are also on the African markets.

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Those markets are unpredictable.

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So if we are talking about huge companies as well, there should be a lobby there internally

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on the markets.

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If you're talking about small and medium sized companies, I think it's a small chance to

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enter those markets.

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Egypt, probably Algeria also, but for example, Nigeria or something like that, no, low chances.

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Even if they join like in cluster to this lobby?

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Cluster I think it could be.

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For example, at the first half of January, we will have like internal conference with

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our partners from the business France, the same TPO, and they will share with us the

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experience how they're working with the African markets.

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So they will be like a consultant from the African office.

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So we would like to get this experience to understand how to help Ukrainian companies

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because Africa is a quite good point for us now to exchange the Russian products as well

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and Chinese.

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What is the easiest country to export?

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I think that Ukrainian companies would like to say Poland, but it's not.

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It's not at all.

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The Ukrainian companies using Poland like a help to transfer their products into Germany

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and other countries.

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But the easiest, I think that Lithuania, Latvia, Estonia, those countries could be the easiest

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by they have small demand.

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What would be your advice to the exporters or the companies that are just going to start

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export?

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You know, the main recommendation is not to be afraid to start.

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It will be quite difficult.

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It will be expensive.

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It will be nervous.

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But after that, everything will be clear.

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And now export is the main solution for us and the main way to survive because the war

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should be going not on the front line, but also in the economic front line.

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Good.

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So thank you for such an advice.

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And I also motivate Ukrainian exporters or not exporters, just the companies that are

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looking to export and to start it and it won't be so frightening for you to do it because

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you won't be alone.

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You will be supported.

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Thank you, Andrii, for being at the show and good luck with your export promotion activity.

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Thank you for invitation.

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You are listening to the start global insights, the podcast for businesses looking to expand

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00:28:35,560 --> 00:28:39,160
globally with your host, Dmitry Shvets.

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00:28:39,160 --> 00:28:45,080
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00:28:45,080 --> 00:28:49,800
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