Hi, I'm Dmytro Shvets.
Your host at the Start Global Insights, where I interview local experts in different countries
about local insights and international expansion experience.
This time we are going to talk how governments support exporters and my guest today is Andriy
Litvin, a deputy director of entrepreneurship and expert promotion office of Ukraine.
Hi, Andriy.
Hi, good afternoon.
My name is Andriy Litvin.
I'm the deputy director of the state institution entrepreneurship and expert promotion office
of Ukraine.
And mainly I'm responsible in this office about expert activities of our governmental
institutions, namely the education, consultancy, analytics and partner search.
Andriy, I remember how more than 10 years ago we have been to Kiruna in Ice Hotel.
This is in the far north of Sweden.
And we met there an owner of the Ice Hotel and he told us a story how it all began.
And he said that they were sitting in the middle of nowhere because Kiruna is actually
almost the North Pole with some local guys and they were chatting how they could attract
more people to this cold and unfriendly region.
And as they had plenty of ice, they've got an idea to sell the ice.
So to build a bar, an ice bar completely of ice and to export it to other countries.
Then they just were thinking how to do that.
And they contacted the Swedish expert promotion office.
And as they contacted soon, they opened ice bars in several countries, like in Canada,
I think, in New York, I believe, and also in Tokyo, what was the most amazing for me.
And they began to export ice blocks from the nearby river to build this ice bars.
And in other countries.
And at that time, I saw that I would wish that one day we would also have such an organization
in Ukraine.
And at that time, it was almost impossible.
And then suddenly, the expert promotion office appeared.
Yeah.
So could you tell us a bit the story, the short story of its creation?
I remember that that was first not the part of the governmental organization.
Yeah.
A great case, actually.
And I was dreaming about the two because I used to live in Poland.
And I saw how the Polish organization works with almost 40 offices abroad.
And it was like my dream to have such an office, such an institution in Ukraine, which will
be responsible for the expert activities and promote our products and services.
Basically, the story began in, if I remember, in 2016, when the international partners of
Ukraine, like Canadian, European, they started to worry about Ukrainian experts.
They were interested in Ukrainian products and services.
And there were a few projects which started to fund and provide financial aid to organize
such an office and hire consultants.
Okay.
So mainly, we invited a lot of consultants from different countries and also involved
Ukrainian experts from the project management or consultancy directions and provided, like
developed such services like educational courses, like consultancy, like analytics, and also
the most important department search.
Because before the 2014, the main markets for Ukrainian companies, they were like Russia,
Kazakhstan.
So nothing in common with the European certification, license, restrictions, et cetera, et cetera.
And it was really hard to understand how to help Ukrainian companies diversify their markets
and mainly to the European Union and Canada, United States, Middle East.
So yeah, and after we proved our efficiency in 2018, this consultancy body was restructured
to the state institution, which was funded, started to be funded by the government.
And also in 2020, we started the process to add in this entrepreneurship.
So we divided into one project, one institution, which is responsible for both activities.
Okay.
But in fact, this is not a very bad idea because to my opinion, yes, the entrepreneurship is
very tightly connected to the global markets.
Because if you are going to global markets, you are acting like a startup because you
have like everything new, new clients, new markets.
You need to make new hypothesis and check them like in startups.
So the general approach could be the same.
Our idea is that anyone could start their own business, develop it and became an exporter.
So because now during the war, based on our surveys, more than 40% of Ukrainian businesses
would like to export and start their export activities.
Now Ukraine is known anywhere and Ukrainian products, really they're cool.
I mean, you cannot find something similar in the world if you're talking about different
products, about craft production and so on and so on.
Cool.
But you said that when you were creating the office, you have been researching different
other types of other countries' organizations.
Is there kind of a benchmark in the world of expert promotion offices or trade promotion
offices in the world?
Who are the best?
Really difficult to choose one.
But for example, for me, from my point of view, the Irish one is the best.
And I think, and I heard a lot from the different TPO's from the European countries that they're
also thinking that the benchmark is the Irish TPO.
And they're collecting information from them about their procedures, about their services,
and then trying to develop something similar, but for the internal audience.
When I consult companies, so when I tell them where to search for information, I always
suggest them to go to the expert gov, the US trade promotion organization, because they
have a lot of valuable resources.
So, dedicated to the US exporters, but in fact, anybody can use it.
I suppose that we also have this type of data that can be used from abroad.
Now we are providing analytical reports about some sectors, focused sectors for the Ukrainian
economy and for us based on also surveys and analytics.
We are providing the reports, the trends, main markets, which could be the best option
for Ukrainian companies.
Our main idea and our plans for the next year is to communicate the database and the expert
gov UA.
So, the information could be updated in the real time.
So, any company, we would like to create such kind of dashboards with the database from
the Euromonitor, for example, with the updated information or Statista.
So, the Ukrainian companies could search anything they would like.
It's like an open data and find anything they want.
We used to made it with Ukrainian information platforms.
For example, at the DIA business gov UA, you can find analytics in Ukraine about the sectors,
about the new entrepreneurs, any information.
And it was created especially for the governmental institutions for the decision making and for
flexibility.
I heard that as far as I know, the DIA business got some great award in Europe or even in
the world for digital tools.
Yeah.
To be honest, our international partners are already asking about the platform, about the
tools we are providing because they would like to provide involved with the systems.
Ukraine now is the top of digital changes in the government.
For example, the Minister of Digital Transformation, they're already helping Estonian partners
to provide like DIA in their country.
But as we know, Estonia was one of the top digital countries in the Europe and the world.
But now, Ukrainians are helping them to provide such systems internally in their institutions.
Yeah.
The country that gave the birth to the video conferences, the Skype creators.
I also remember that our Estonian partners also something like more than 10 years ago,
maybe 15, they were like saying to me that, hey, you see, we can register a company from
our laptop within five minutes and you cannot do it.
And now we can do it.
But we also can do it better than Estonians.
That's interesting.
And the more important to close the entrepreneurship also to end the...
Yeah, this is very important.
Yeah.
To open the company is not a big problem, but to close the company, this is a big one.
Coming back to the expert, I know that you are doing a lot of job now.
Yeah.
So you're helping companies to go abroad.
You are making a lot of trade missions, looking for the partners abroad.
What are the main obstacles or the main challenges now for Ukrainian exporters to go abroad?
Yeah.
The main one, the first is financing.
So export is a long-term game.
It's not a cheap activity to start an export, to promote company, to visit exhibitions,
to present their products, to develop new products, to adapt it to the regulations,
to get certification, licenses.
And they are making mistakes, choosing not the right markets, choosing not the right
exhibitions, choosing not the right partners.
So it costs a lot.
And also the additional problem, also based on our mentality in Ukraine, for example,
that our companies, they don't want to export together with another companies from Ukraine,
because it's really difficult for small business to find a great partner.
For example, the main market for Ukrainian companies based on our service, the focused
market for them is the United States.
And they all think that it's easily, this is the best choice, because after the United
States, the European market, the Middle East, they will be open for them.
But they don't understand, for example, that the small business or medium-sized business,
they don't have a capacity to go into big retail chains or supermarkets in the United
States.
And to do this, they should work with another companies in Ukraine, with their competitors
in the internal market.
Yeah, it will be cheaper and easily if you go in connection with someone and you divide
the financial costs, you are sharing your experience.
Take an example, yeah, we have a lot of textile manufacturers in Ukraine, which are working
for the European huge companies like Hugo Boss or something like that.
And for example, they're supplying some ingredients or if may call it from abroad.
Also, it's possible to manufacture it in Ukraine internally, but they should invest some money
in Ukraine.
So, the best option is, for example, that five or ten companies, they're working together,
they're sharing the costs, they're building this manufacturer, and then they're using
it.
Two episodes before, we were talking with a Romanian expert and he said that Romania
has the lowest level of trust in Europe, and I believe that we are close to the Romanians.
So, this is the mentality of low trust to each other, but I think that now it is changing
dramatically also because of the war, because we are helping each other also heavily.
But this is also about the long-term thinking, so the long-term investments, so not to have
the profit, and this is because of the instability.
So people are not accustomed to live in the stable world, like Europeans, for example.
Yeah, like my colleague says, some CEOs, they would like to invest in the exhibitions, and
other ones, they're buying new Toyota Land Cruiser.
Yeah, if I remember, two years ago, I had a meeting with German cluster of the aircraft
cluster.
So, the cluster which is joining a lot of companies, which are producing some parts
for the small planes.
So the one company is responsible for engine, the other one for IT, the other one for something
else, they're cooperating together.
And this is a great idea because they're working quite long, they have some internal atmosphere,
they trust each other, they're feeling quite good.
The cluster is responsible for the lobby, everything works.
You know, I think that it takes time.
So I totally agree with you.
So I see the same situation with all companies that I work with.
But because of the struggles, we also have this muscle of innovation.
We have a lot of struggles, and that makes us to be innovative, to be resilient, and
to be innovative.
And that's why when you're talking to some European organizations, your ideas are like
for you is very simple.
But for them, this is something innovative because they didn't even think about that
because they are living in the stable and normal situation.
So they're just not motivated to do some stuff.
I usually, I'm looking not huge companies in Ukraine to understand the situation of
the business environment.
I usually look into small businesses, like up to 10 or 20 people.
And I see when I see this creativity, the efforts also when I see that they are exporting
their products or they're selling it on the marketplaces is great.
Yeah, I mean, the European companies, they're not ready for that.
They are trading like the local market in the city or in the region, but Ukrainian companies
with 20 people, they're selling internally in Ukraine and also sending their products
abroad.
It's amazing.
How do you support this small and medium enterprises when they're going abroad?
Mainly the main difference of our institution that we call the company, our client.
So we are working with them based on some businesses regulations.
So they are our client and the client have the rights.
So mainly we're asking them to fill the form to understand their readiness.
So the form mainly was created based on the Canadian best practice.
It's like 38 questions.
After that, we understand on which stage of the export activities companies.
After that, for example, if the company is a beginner, they don't have export, they're
just starting.
So we have some educational courses for them from what they should start, what they should
read, what they should understand, et cetera, et cetera.
Also we have some courses for companies with some experience, but they are divided into
sectors.
So those courses are niche courses.
We are providing such courses in cooperation with the Estonian Marketing Institute and
we have experts, foreign experts for such courses.
And during those courses, this is a long-term courses for eight or nine months with practical
cases.
For example, if anyone, any company would like to participate, they should understand
that they will have to do their homework.
For example, it's divided into modules and during the each module, the participants should
find Ukrainian company, small or medium sized businesses and work with them.
For example, the one module is divided and the main topic is analytics.
So they should find their client and free of charge provide the analytical services.
So to investigate the market, to prepare the report, et cetera, et cetera.
So those courses are practical.
Unfortunately, they are also expensive.
So those courses are financed by international partners.
The second way of our help is consultancy.
For example, we have individual consultations.
We are talking with the company.
We have individual meetings when we're trying to understand where they have some gaps and
where the problems occur.
For example, to understand probably they chose the not like the best option of the market
for them.
And also this is going in connection with the analytical department because they analyze
in markets, the products of this company and the markets abroad.
Also there are a lot of analytical services.
There are some of them automatically provided on our website, expert.gov.ua.
Any company should find the criteria, the regulations, the governmental or non-governmental
barriers on the website.
And another, we can prepare the report, analytical report for the companies based on their request.
For example, if any association or the group of companies, they have a request to analyze
five or six or 10 markets, they don't understand which one is the best for them, where the
products will be competitive with the local producers.
So we could help with them.
We analyze in those markets.
We are searching the information using our databases, like open data and also databases
which are paid.
And after that, partner search.
It's also exhibitions, trade missions, the catalog of Ukrainian companies.
And our huge dream is to have a Ukrainian brand like making Ukraine and to promote this.
Talking about this partner search or these trade missions, you are making quite a lot
of them.
So you are organizing everything.
So you're looking for the exhibition itself.
You are paying for the booths and then you are finding the potential customers for the
booths.
How well does it go and what could be done better?
So mainly we are providing services to the food sector, food and beverage, organic sector,
IT, machinery, creative industries like lighting industry, furniture.
So those are the most important, but we're also helping another one like medical equipment.
So this is not a problem.
We are looking for such exhibitions.
Those days we had an opportunity to ask the organizers to provide something free of charge
or with a discount.
So this was the main way to cut the costs.
So we have a lot of activities before the exhibition or any trade mission.
For example, before the trade mission, we have some courses, not like courses, workshops
about negotiations or presentations of the companies.
So we're teaching them how to present the company, how to prepare the materials in the
correct way, how to provide negotiations like one by one, how to sell your products, how
to make it attractive.
From our side, the exhibition for the prepared companies is the most efficient way and also
trade missions.
Yeah.
Nowadays trade missions are really difficult to organize because it takes up to four months
just to prepare.
And it's really difficult to do it in Ukraine with some problems with electricity, internet
connection.
Based on our statistics, if for example, 10 companies participate in the trade mission,
three of them will have contracts after the first time, after the first coming to the
country.
And if you're talking about exhibitions, it's like statistics are the same, but the amount
of the contracts is bigger.
What is the most efficient during these events?
From our experience, this is about promotion.
Like, you know this company, MHP, the biggest Ukrainian company and also...
Paltry, Paltry producer, yeah?
So they, for example, from our conversations, they don't need new clients on Middle East
market, but they're participating each year on the biggest exhibition.
They're paying for this gold partnership at the exhibition, so their logos are everywhere.
It costs a lot of money.
And that's all.
They like making this kebab on their stand and presenting their companies, but they're
not looking for the partners.
This is more like a brand awareness thing, yeah?
Yeah.
This way, yeah.
But for small and medium sized businesses, I would recommend to participate in some niche
exhibitions, divided into concrete products.
For example, we had an exhibition for organic producers, Nordic Organic Fair.
It's quite small exhibition in Europe, but one company is even during the exhibition
signed the contract.
What do you think is the difference between this type of communication with your potential
clients and remote one?
So like sending the samples via post and communicating via emails or video conferences.
Why this is so important to be in the place and meeting them physically?
This was the main problem during the COVID-19.
And the main problem is trust.
I had a case with the Ukrainian IT company, which companies which are mainly working online,
yeah?
The CEO of the company has one rule that he will not sign the contract if the potential
buyer will not come to Ukraine to see his office, his people and to talk with them.
So after that, I just asked, what is the statistics?
Because he paid everything.
So he's inviting and he's paying for the flying for accommodation for everything.
And I just asked, what is the statistics?
Where is the result?
He said that no one get back from Ukraine without the contract.
From your experience working with so many requests from many industries and many directions,
how do you think what countries are the most difficult to enter?
I think that Asian countries, they are difficult because of the cultural difference and because
they don't know about us.
They know only like sunflower oil or something like that.
They used to buy.
Commodities, yeah.
Commodities mainly, but they don't heard about Ukrainian products with added value.
Like Indian probably heard about IT, but they don't know about anything else.
Japan, for example, yeah, also, it's really expensive market to enter.
So those markets are difficult for Ukrainian companies, like small and medium sized.
They extremely difficult for the bigger one.
It's could be okay for them to diversify.
I know that Ukrainian huge companies, they're working with Chinese, with Japan also.
Also I will not talking about the United States and Canada.
It's everything is clear.
Those markets are quite difficult, but it could be.
This goal could be achieved.
If you prepare all the documents, everything is clear with the company.
So you could find a partner, but the difficulties are also on the African markets.
Those markets are unpredictable.
So if we are talking about huge companies as well, there should be a lobby there internally
on the markets.
If you're talking about small and medium sized companies, I think it's a small chance to
enter those markets.
Egypt, probably Algeria also, but for example, Nigeria or something like that, no, low chances.
Even if they join like in cluster to this lobby?
Cluster I think it could be.
For example, at the first half of January, we will have like internal conference with
our partners from the business France, the same TPO, and they will share with us the
experience how they're working with the African markets.
So they will be like a consultant from the African office.
So we would like to get this experience to understand how to help Ukrainian companies
because Africa is a quite good point for us now to exchange the Russian products as well
and Chinese.
What is the easiest country to export?
I think that Ukrainian companies would like to say Poland, but it's not.
It's not at all.
The Ukrainian companies using Poland like a help to transfer their products into Germany
and other countries.
But the easiest, I think that Lithuania, Latvia, Estonia, those countries could be the easiest
by they have small demand.
What would be your advice to the exporters or the companies that are just going to start
export?
You know, the main recommendation is not to be afraid to start.
It will be quite difficult.
It will be expensive.
It will be nervous.
But after that, everything will be clear.
And now export is the main solution for us and the main way to survive because the war
should be going not on the front line, but also in the economic front line.
Good.
So thank you for such an advice.
And I also motivate Ukrainian exporters or not exporters, just the companies that are
looking to export and to start it and it won't be so frightening for you to do it because
you won't be alone.
You will be supported.
Thank you, Andrii, for being at the show and good luck with your export promotion activity.
Thank you for invitation.
You are listening to the start global insights, the podcast for businesses looking to expand
globally with your host, Dmitry Shvets.
And our episodes on Google and Apple podcast and other major platforms, including YouTube.
Don't forget to subscribe not to miss the next episode about another interesting country
and how to make your business there.