Friday, May 30, 2008

Ukraine is an iceberg

A friend of mine just forwarded me The 2008 Ukraine Competitiveness Report published by the World Economic Forum. The section on Ukraine's rankings in the Networked Readiness Index gave me some good statistics. Some of the stats were in line with what I sensed here on the ground, but a couple of them surprised me. My main takeaway was not earthshattering. Basically, it's what I and any other moderately intelligent person whose lived here for any time knows: Ukraine is not living up to its potential, and it's mostly their own (read: government) fault. It's the iceberg phenomenom. Most of its potential lies hidden below the surface.

Below are a few I found most interesting:
  • Ukraine's broadband Internet monthly subscription cost, as a percentage of monthly GDP per capita and monthly income ranked as "relatively affordable" among all countries, although Internet usage overall is very low. However, the cost of mobile calls ranks as being "quite high" compared to international standards.

This surprises me given the intense price competition we've experienced between the mobile operators over the past 10 years. Maybe "mobile calls" in this report refers to mobile Internet calls. That I can believe. It would also indicate that there is a lot of untapped growth potential in mobile data services, whenever the operators decide they want to encourage usage. But in the context of this report, it seems there is already a lot of people who want to use the Internet and know how to use it, but don't have a computer or Internet connection available.

  • Ukraine's business readiness, or companies' preparedness to fully incorporate ICT into their operations and strategies, came in "mixed". Companies got mediocre marks for the quality of staff training the local availability of research and training services. It was also hurt by affordability of telecommunication services.
This doesn't surprise me, as my impression is that Ukrainian companies have a hard time implementing a complete solution or doing something the right way. I can easily a company paying for a new technology or piece of software and not bothering to figure out how to fully utilize it or even train people how to use properly. This requires strategic thinking, an ability to analyze a process and find a more efficient one, and probably additional expense for training. I'm sure Ukrainian companies aren't unique in this area, but from my experience many are notorious for slapping things together and forgetting about them.

  • Ukraine had a "rather large difference" in scores between business and individual ICT usage, with business usage scoring much higher. However, in terms of global rankings, Ukraine's individual usage ranks higher, suggesting that Ukraine's businesses are losing competitiveness against the international business community.
This is more of an outcome statistic for me, that shows how the ICT weaknesses of Ukraine's businesses are hurting the ability to compete with the rest of the world. It's causing them to lose ground. It also indicates to me the huge ICT potential of the Ukrainian population that is yet to be tapped.

  • Ukrainian firms are perceived as "not very successful in absorbing technology". But Ukrainian firms' innovation capacity ranked "quite high", which bodes well for the country's future preparedness.
A general statement, but, like the above stat effective at revealing Ukraine's ICT potential.