- What are innovations in the modern world?
In the context of economy, innovation is a set of tools that can dramatically increase labor productivity and create added value. In other words, a person working on a tractor can generate much more value than a man with a shovel. And all this concerns not only a separate business or company but also whole countries.
– What hinders the introduction of innovations in Ukraine? Why are we lagging so far behind other countries?
There are two simple parameters that are very relevant to Ukraine in the context of innovations. The first is the so-called basic hygiene. The physical and legal security of business, the opportunity to work peacefully and create something without fear that masked people will come by some day, take everything from your office and block the company's work. The second is investment. Unfortunately, the institute of venture investment, which existed in Ukraine three years ago at least in some form, has been completely destroyed by now. But it is impossible to build a business without investing, it's jerry-rigging.
– According to some estimates, a few years ago, Ukraine saw a real boom of startups.
A single or even 10 successful examples is not enough to declare the ecosystem operational. I believe that it is necessary to make an assessment of the whole country in a comprehensive and objective way. For example, Finland, which is only five times the size of Lithuania, has 50 times more startups in the Silicon Valley. This is a measure of success.
– What state policy can ensure the successful development of innovations and startups?
It is important to understand that it is not the state that creates innovations, and not even corporations such as HP or Microsoft. This is the level of universities, active and progressive young people, entrepreneurs. But at the same time, the state and controlling agencies should not act as police. Instead they should help, advise and physically protect business. It is also necessary to ensure the reliability and transparency of the banking system. After all, many entrepreneurs prefer to open accounts in banks outside of Ukraine not because they are trying to hide money but simply because they are afraid of losing their capital.
– And yet, how to attract investment in startups which are trying to develop in Ukraine nevertheless?
I have deep trust in angel investors' capital, which is the global driving force in the range of 0 to 100,000 euros and can make a huge contribution to the development of the startup industry. For example, the UK has substantially increased the efficiency of investing after it introduced benefits for business angels seven years ago. Investors, in fact, have a choice: either they pay several thousand in taxes or invest in a startup. This not only provided an inflow of investment but also allowed a huge number of people to get involved in innovation. As a result, all - both business and the state – have won.
– In which projects does your fund invest?
For my fund, the year of 2018 is about blockchain, crypto currencies and FinTech. All banks and other financial institutions, as well as investment instruments, have been designed inefficient. And in the next 10 to 20 years they will simply crumble under the pressure of new technologies. Blockchain and FinTech are omnipresent, they are fundamental. In addition, these are the areas where countries such as the United Kingdom, the United States and China cannot compete with "partisan" states such as Latvia, Lithuania, Estonia, Singapore and Luxembourg, which have a real chance to become a new Switzerland. Why? Because a "small and fast" one will achieve much more success than a "big and heavy" one.
– Why, despite the fact that the whole world is discussing blockchain, is it still a kind of ephemeral technology?
Any new technology experiences a period of misunderstanding, followed by hype and recession and only then does it achieve normal growth. Blockchain or bitcoin were a true "breakthrough" and proved a lot to humanity. For example, an alternative reality where people create technology is possible. And it exists outside the format of corporations or state regulators, without control or public capital, and it can even advance on its own.
– And when can we expect a massive emergence of truly operational companies in this area?
This question is clearly not of the coming months but rather the next 5-6 years. Moreover, in the distant future, we can even talk about such seemingly utopian scenarios as a blockchain-based state without the participation of people since a man would be the weakest link in this scheme.
Interview by Pavlo Kharlamov.
Photos provided by KIEF Organizational committee.