Odesa is one of the key port cities in Ukraine, and it opens the way for sea transportation. Tourism was also highly developed here.
Since the beginning of the full-scale Russian invasion, the city, like the rest, has experienced upheavals, and the economy – huge challenges.
In addition, the journalists of The Ukrainian Review are located in different cities of Ukraine, but the editorial office and its founders are located in Odesa.
Therefore, we offer to know more about this region, such as what development prospects and opportunities for investments and startups it can offer.
Natural and economic features
Odesa region is a highly developed, industrial region. On its territory are located enterprises for oil processing, machine building, repair and installation of machines, metallurgy and metal processing, chemical and petrochemical, food, light industry and other industries.
One of the main features of Odesa is that it serves international transit cargo and passenger flows and performs the most essential transport and distribution functions at the national and international levels due to the presence of seaports.
Also, Odesa is the leading region of Ukraine in terms of the level of development of the maritime complex and industries related to the use of the sea resources and the world ocean.
Odesa business now
According to Oleg Kiper, the head of the Odesa Military Administration, in 2023, more than 3,000 FOPs (individual entrepreneurs) and more than 1,000 legal entities were opened in Odesa.
Most of them work in the fields of wholesale and retail trade (42.8%), information and telecommunications (10.3%), and agriculture (5.6%). That is, business in Odesa continues to develop during a full-scale war.
Odesa has always been a city that combines creative and entrepreneurial talents. Many natives now represent Ukraine in the international business arena.
In Odesa, local entrepreneurs have a knack for creating product IT companies. Among them are the IT group Netpeak Group, Readdle, which develops mobile applications, Looksery, which works in the field of augmented reality, Keepsolid, which is engaged in the production of products aimed at protecting privacy, etc. In addition, many large IT companies have offices in Odesa, such as Luxoft, HYS Enterprise, SoftServe, DataArt, Intellias, Sigma Software, Autodoc, and others.
In general, Odesa has an economically attractive climate for the development of companies that can take advantage of the city’s logistical position and its diverse business ecosystem. Even despite the pressure of the aggressor country, Odesa remains a business hub capable of offering investors solutions and access to qualified specialists, – believes Oleksiy Mamontov, CEO of digital marketing agency Inweb.
What challenges does Odesa business face
In addition to war risks, this is, first of all, an unstable situation with energy supply and the expectation of a significant increase in the cost of energy carriers. Yuriy Grinchenko, a professor of the Department of marketing and business administration of Odesa I.I. Mechnikov National University.
The second factor is a noticeable reduction in the labour force, connected both with the departure of a significant number of Ukrainians abroad and with mobilisation. It also causes an increase in wages, which in the short term directly affects the costs of enterprises, but in the long term gives a significant impetus to the modernisation of the economy.
Yuriy Grinchenko notes that the third challenge is the complication and increase in internal and external logistics costs. Despite the end of the border blockade in the West and the resumption of maritime transport, logistical risks remain incredibly high.
Development of Odesa business
The Ukrainian Review spoke with Jan Shapiro, founder/CEO of U-Nation, ambassador of the Regional Development Agency of the Odesa region, and ambassador of the Ukrainian Review, about Odesa’s business development during a full-scale invasion.
According to him, despite the war, Ukraine managed to keep the economy afloat, which is a unique phenomenon in history and once again proves that we have a great future ahead of us.
It has been mentioned more than once that this year the logistics volume of grain transportation reached 95% of the pre-war level, agro-industry is working, even the tourist season in Odessa was in the summer – apart from domestic tourists, I personally know Germans who bought real estate in Odesa, and regularly they come to us during the warm months.
An important role in this is played by the participation of international programs and projects aimed at attracting European and American partners to economic recovery. Innovative projects are beginning to occupy an increasing share of influence, which opens up many opportunities for partnership with the technological ecosystems of world leaders.
There are also international programs and partnerships aimed at supporting businesses in the region. But it is important to understand that the majority will still be implemented ahead since we are moving from a humanitarian direction to an economic one. And society needs to be prepared for this.
So far in September, we launched the first international innovation accelerator with the support of USAID, where more than 50 mentors, experts and investors from all over the world are involved, and quite a few of them come to us personally, and this is during the war, imagine what will happen next?
We also involved partners from the Regional Development Agency of the Odesa region and The Ukrainian Review (or Urban Buro) in establishing partnership relations between the cities of The Hague and Odesa. In October, the municipality of The Hague presented potential projects for joint implementation, one of which was the European Embankment.
There are also attractive startups in Odesa that can make entrepreneurs in the agro-industrial vector more competitive, which fully corresponds to the relevant focuses of the Odesa region:
We are also working on the launch of a platform for attracting global technologies for the recovery of Ukraine, where global corporations and startups will be able to test their innovative solutions by integrating into our ecosystem. Because sometimes it is even easier to create from scratch, and this is a window of opportunity for partnership with the world’s technological leaders.
For this, we have already developed a partner network.
The Odesa region is a corridor for the recovery of the entire southern part of Ukraine, thanks to the logistical connection with the EU through Romania and the port infrastructure.
Also, climate change and timely adaptation to conditions open up new opportunities for farmers, such as growing olives. The tourism sector needs to be updated with a medical and rehabilitation direction, which will provide a powerful development and contribution because it is one of the most profitable types of tourism.
The integration of technology is relevant to any of these areas, so when we talk about recovery – we can and will be able to update the entire economic ecosystem according to modern standards, and this is always accompanied by investment!
Restoration of the Odesa region
The Ukrainian Review also spoke with Serhiy Kononenko, director of the Regional Development Agency of the Odesa region. The Agency’s focus in 2023 is to work on planning the reconstruction and development of the Odesa region in the post-war period. The Agency is involved in developing the Regional Recovery and Development Strategy and the Recovery Plan together with international donors and experts.
This year, Odesa region became a partner of the Swiss-Ukrainian project “Cohesion and Regional Development of Ukraine”, UCORD, and the Agency’s activities will be focused on developing projects from UCORD and participating in international project activities.
Despite the full-scale invasion, the Agency’s activities increased thanks to contacts with international donors and increased attention to Ukraine and the region. As a result, there was an increase in grant opportunities for communities and regional businesses, which contributed to the development and functioning of the institution.
In particular, the agency developed a grant application for the amount of UAH 18,100,000 in the interests of the Suvoriv territorial community. (Request for submission of applications (RFP) for receiving sub-grant No. 40 from the USAID Program for Agrarian and Rural Development (AGRO) for receiving a sub-grant for the implementation of new irrigation technologies, energy- and water-saving equipment, and irrigation automation in the organisation of water users within the Suvoriv irrigation system”.
The agency provided assistance to Viking Alliance LLC (Swedish-Ukrainian container terminal) in the implementation of a pilot project to obtain financial leasing from JSC “Oschadbank” for the purchase of cargo handling equipment during martial law. Expanding the technical capabilities of the enterprise made it possible to ensure the stable operation of the terminal and the permanent employment of about 60 employees. It also helped implement a number of social and infrastructure initiatives for the community, as well as to increase revenues to the budgets of various levels.
The representatives of the Agency are included in the working group for the development of the Strategy of comprehensive post-war reconstruction and development of the Odesa region. The analytical part has been worked out. Work has begun on the development of the program part.
Funding from the USAID HOVERLA project was attracted for the holding of 5 thematic Recovery Forums as open discussion platforms for discussing priority issues within the framework of work on the regional strategy: “Security. Integration. Potential”, “Transformation. Sanitation. Rehabilitation”, “Transport. Logistics. Infrastructure”, “Regional development. Spatial planning”, “Strategic horizon. Harmonisation of processes”.
***
Odesa region is a key region of Ukraine with a high level of industrialisation and development of the maritime complex. Thanks to its natural and economic resources, Odesa provides essential transport and logistics functions at the national and international levels. Local entrepreneurs demonstrate success in the field of IT, in particular in the development of mobile applications and technologies, which confirms the attractiveness of the region.
Anya Ostymchuk
