Shtogrin, Savchuk, NAVIGATING DIGITAL HORIZONS: UKRAINE’S TRANSFORMATIVE ROLE AND INTEGRATION IN THE EU CONTEXT

K.V. Shtogrin, Assistant Professor
V.O. Savchuk, student
Taras Shevchenko National University of Kyiv

NAVIGATING DIGITAL HORIZONS: UKRAINE’S TRANSFORMATIVE ROLE AND INTEGRATION IN THE EU CONTEXT

In an era defined by the rapid evolution of technology, the digital landscape serves as the frontier for nations aspiring to redefine their global standing. Among these, Ukraine emerges as a dynamic force, navigating the intricate web of digital transformations with a keen focus on sectoral integration into the European Union’s (EU) Digital Single Market (DSM).
The primary global assessments gauging the advancement of information and communications technology, as well as the regulatory landscape of nations, include United Nations e-Government Development Index (EGDI) and Network Readiness Index (NRI).
According to the EGDI index for 2020, Ukraine ranks 46th among 193 countries (with a total score of 0.8148) (Table 1). Ukraine received the lowest scores for Telecommunications Infrastructure (0,727), and the highest for Human Capital (0,8669) [5].
Compared to the previous EGDI rating (2020), in 2022 Ukraine improved its position from 69th to 46th rank. Nevertheless, Ukraine is lagging behind its neighbouring EU Member States, belonging to the group of countries with very high levels of e-government development. However, Ukraine falls behind its neighbouring EU Member States, which are part of the group of nations with a notably high level of e-government development. This group includes Poland, Hungary, Slovakia, Romania, Bulgaria, Latvia, and Lithuania, among others [6].

Table 1. Ukraine in the international digital development rankings


In the NRI ranking for 2022, Ukraine ranked 50th among 121 countries compared to its 63rd position in 2020. Ukraine lags regarding the following indicators: Future Technologies (45th), ICT Use by Government, and Online Government Services (57th) [4].
As we can see, leading countries are also members of the EU, which can be explained by the framework of the EU’s Digital Single Market. It is a great opportunity to implement initiatives to digitize various sectors of the economy. Recognizing this, the Ukraine-EU Summit on October 6, 2020, underscored the crucial role of the digital sector in enhancing economic integration under the Association Agreement.
The EU navigates a complex tech geopolitical landscape amid two contrasting powers with divergent tech development approaches. China pursues a centralized approach to becoming the global AI leader, expanding its influence through surveillance technology exports and infrastructure investments. In contrast, the United States has cultivated a powerful tech industry through market-driven innovation, exerting influence through lobbying and soft power while shaping global technological standards.
Ukraine, navigating this dynamic landscape, must carefully consider its strategic positioning in this increasingly competitive technological arena. Based on the outcomes of the year 2022, the ICT sector contributed $7.35 billion or 4.5% of the GDP to Ukraine’s economy. The adoption of technologies such as AI, big data, and the Internet of Things is transforming the way businesses operate and make decisions. The main challenge there is the high financial cost of such advancement. This includes not only acquiring software and hardware but integrating it into the economic system. AI, which is now also used in innovative weapons during the war, on average costs around 400,000 U.S. dollars annually for purchasing and maintenance [3].
Last year, Ukraine joined the seven-year "Digital Europe" program with a fund of €6 billion. Its goal is to accelerate economic recovery and digital transformation. The participation of countries in the program involves the payment of contributions. However, the EU exempted Ukraine from paying them in 2021-2022 and provided a 95% discount on financial contributions during 2023-2027.
Cybersecurity has emerged as another critical challenge, particularly in the light of the war. Since 2014 and particularly since the run-up to its full-scale invasion in February 2022, russia has directed cyberattacks against Ukraine’s government institutions and vital infrastructure such as telecommunications, electricity, and data storage systems. Throughout 2022, the State Special Communications Service documented over 2,000 cyber incidents and an even higher number of cyberattacks in Ukraine resulted in 1,79 billion U.S. dollars loss [1].
In March 2022, Ukraine became a member of the Cooperative Cyber Defence Centre of Excellence, a NATO-accredited institution dedicated to cyber defense research. Critical aspects of this partnership are the exchange of "threat indicators" and collaborative training exercises for cyber defense professionals. Ukraine should leverage its expertise in such collaborations to establish a distinct area of focus – cyber diplomacy [7].
Last but not least, even though Ukraine’s startup scene is rapidly gaining international recognition, the vast majority of new ventures need financial support. According to the Ukrainian Startup Fund, beginning enterprises are trying to adapt to new working conditions during martial law: 24,3% of startups – continue to work, 46,7% – partially work (mostly remotely), 28% – do not work at all, and 1% – have changed the scope of their activities [8].
Investments in growth and secondary deals, which usually account for the better part of deal volumes, fell dramatically. In contrast, early-stage investment in Ukrainian companies maintained a relatively high level, highlighting their resilience during the ongoing war. Moreover, Ukraine is experiencing a surge in innovation hubs and tech clusters, nurturing collaboration and knowledge sharing within specific regions, such as Lviv and Kyiv [2].
Aligning with this backdrop, the Digital Decade Policy Programme aims to double the number of unicorns in the EU by 2030 and ensure 90% of SMEs achieve a basic digital intensity by the decade’s end. For this reason, engaging in EU funding initiatives, including the European Innovation Council Accelerator and the Horizon Europe program, can offer substantial financial backing for promising startups in Ukraine [8].
To sum up, Ukraine's digital journey reflects resilience, innovation, and a commitment to EU integration through programs like Digital Europe. While progress is evident, competition and geopolitical challenges persist in technology. Aligning with the EU’s Digital Single Market remains vital for economic integration and strategic advancement.
References
1. Cyberattacks in Ukraine during 2022. URL: https://cip.gov.ua/en/news/statistika-kiberatak-na-ukrayinsku-kritichnu-informaciinu-infrastrukturu-15-22-bereznya
2. Investments in Ukrainian startups in 2022. URL: https://uadn.net/2023/05/30/investment-in-ukrainian-startups-fell-by-nearly-80-in-2022/
3. How much does AI cost? URL: https://www.suffescom.com/blog/how-much-does-artificial-intelligence-cost
4. The Network Readiness Index 2022. URL: https://networkreadinessindex.org/countries/
5. The UN Department of Economic and Social Affairs. "E-Government Survey 2022", pp. 70-72
6. Ukrainian Center for European Policy. P. Iavorskyi, S. Taran, O. Shepotylo, O. Hamaniuk "Ukraine’s integration into the EU’s Digital Single Market", 2020, pp. 8-12
7. Ukraine’s integration with the EU’s digital market. URL: https://prismua.org/en/english-eus-and-ukraines-approaches-to-digital-diplomacy-in-the-geopolitics-of-technologies/
8. Ukraine’s startup ecosystem. URL: https://ucluster.org/en/blog/2022/06/usf-continues-to-work-to-save-ukraines-startup-ecosystem/





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