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DOI: https://doi.org/10.34069/AI/2023.68.08.17
How to Cite:
Verbivska, L., Abramova, M., Gudz, M., Lyfar, V., & Khіlukhа, O. (2023). Digitalization of the Ukrainian economy during a state
of war is a necessity of the time. Amazonia Investiga, 12(68), 184-194. https://doi.org/10.34069/AI/2023.68.08.17
Digitalization of the Ukrainian economy during a state of war is a
necessity of the time
La digitalización de la economía ucraniana en estado de guerra es una necesidad del
momento
Received: July 25, 2023 Accepted: August 29, 2023
Written by:
Liudmyla Verbivska1
https://orcid.org/0000-0002-2768-9157
Maryna Abramova2
https://orcid.org/0000-0001-7644-9988
Maryna Gudz3
https://orcid.org/0000-0002-1454-4987
Vladyslava Lyfar4
https://orcid.org/0000-0003-2758-9575
Оksаnа Khіlukhа5
https://orcid.org/0000-0002-1228-7171
Abstract
This article explores the digital economy's
importance for Ukraine's development,
analyzing its current state, identifying
digitization opportunities and threats, and
assessing readiness for adopting digital
technologies. The study employs a range of
methods to assess the extent of development of
Ukraine's digital economy. It examines global
trends in digital transformation and evaluates
Ukraine's digital resources and information
infrastructure. The advantages and disadvantages
of implementing digital technologies in the
Ukrainian economy are identified. The study
reveals that Ukraine lacks sufficient digital
resources compared to other European countries.
However, it highlights the country's active efforts
in developing its information infrastructure and
emphasizes the importance of digitization for
economic growth. The research identifies the
main prerequisites for the global era of the digital
economy and establishes the significance of
information and communication technologies for
1
Doctor of Economic Sciences, Associate Professor, Department of Business and HR Management, Faculty of Economics, Yuriy Fedkovych
Chernivtsi National University, Chernivtsi, Ukraine.
2
PhD in Economics, Senior Research Scientist, Department of Creation and intelligent network tools using, NC «Junior Sciences
Academy of Ukraine», Kyiv, Ukraine.
3
Doctor of Economic Sciences, Professor, Department of Economics and Customs, National University "Zaporizhzhia Polytechnic,
Zaporizhzhia, Ukraine.
4
Doctor of Economic Sciences, Professor, Head of the Department Marketing and Logistics, Faculty of Economics and Management,
National University "Zaporizhzhia Polytechnic", Zaporizhzhia, Ukraine.
5
PhD in Economics, Аssoсіаtе Profеssor, Department of Economics Lutsk National Technical University, Lutsk, Ukraine.
Verbivska, L., Abramova, M., Gudz, M., Lyfar, V., Khіlukhа, O. / Volume 12 - Issue 68: 184-194 / August, 2023
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economic development and people's well-being.
Conclusion: Based on the analysis of Ukraine's
digital economy, the study concludes that
digitization should be a priority direction for the
country. It proposes key measures for effectively
utilizing innovative technologies and stimulating
the development of the Ukrainian digital
economy in the "digital era." Expediting the
advancement of the Ukrainian economy in the
realm of innovative technologies is considered
essential for its future progress and well-being.
Keywords: digitalization, digital economy,
European integration process, digital
technologies, digital transformation.
Introduction
In an era marked by the rapid proliferation of
information and communication digital
technologies, their role in economic growth and
social development is undeniable. The
worldwide adoption of these technologies has
been swift, although some regions, such as
Ukraine, have experienced a slower pace of
integration compared to highly developed
countries. As we delve into this study, we will
explore the imperative need to strengthen the
application of digital technologies in various
aspects of production and social life, with a
particular focus on the economic sphere (Order
No. 67-p, 2018). Notably, Ukraine stands as the
sole European nation lacking sufficient digital
resources for a complete transformation into a
digital economy platform. This lag can be
attributed, in part, to the ongoing full-scale war
that continually strains the nation's economy and
impedes its transition to a new digital era.
Therefore, the relevance of our research is
centered around shedding light on the
contemporary aspects of the formation of
Ukraine's domestic digital economy. We aim to
analyze the main trends and explore the potential
for its development on the path to
Eurointegration. In this endeavor, we will
address the following research questions:
Research Questions:
To what extent has Ukraine embraced digital
technologies in various sectors of its economy
and society?
What are the primary challenges and barriers
hindering Ukraine's digital transformation?
What steps should Ukraine take to ensure a
seamless process of digitalizing its economy and
addressing the challenges it faces in this
endeavor?
Methodology
The following methods are used in the process of
researching the digitization of economic
processes in Ukraine:
➢ Economic-statistical method. This method
is based on processing a large amount of
statistical and empirical data. In the context
of military conflict, it is essential to collect
and analyze data on the state of the economy
before, during, and after the conflict. This
allows for identifying shifts and changes in
economic processes, as well as identifying
potential sources of instability or new
opportunities for digitization. The present
article includes processed data on the
implementation of certain stages of
digitization starting from 2016 up to the
present day.
➢ Thematic method. This method allows for
in-depth study of specific elements of the
researched phenomenon. In the context of
researching the digitization of economic
processes, it is crucial to focus on key sectors
that can benefit the most from digital
technologies during the conflict. The article
analyzes the most essential projects during
the state of war, including services for
internally displaced persons, payment
services, job searches, digital literacy
enhancement, and many others.
➢ Schematic method. The use of diagrams
and graphs helps visualize complex
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researched phenomena, processes, and laws.
In the context of studying the digitization of
the economy, diagrams can help identify
relationships between economic factors and
the impact of digital innovations on
economic development. The article
schematically presents theoretical
approaches to understanding the concept of
"digitization" of the economy, the directions
of project financing under the "Digital
Europe" program, the implementation of
digital technologies, and their impact on
Ukraine's GDP by 2030, as well as the
prospects of digitizing the Ukrainian
economy from 2021 to 2030.
➢ Methods of analysis, synthesis, and
comparison. These methods allow for a
detailed study of the researched
phenomenon through the analysis of its key
elements, consideration of the synergistic
effect between digital technologies and
economic processes, and comparison of
achievements and challenges of digitization
in Ukraine with other countries. The article
analyzes Ukraine's position on digitization
among European countries, the main
challenges in improving the digitization
process, and the necessary steps to improve
Ukraine's ranking among European
countries.
The use of these research methods allows for
obtaining a systematic and analytical
understanding of the digitization of the economy
in the conditions of military conflict in Ukraine.
Such an approach helps to comprehend which
sectors may be particularly vulnerable and,
conversely, which sectors may have
opportunities for accelerated development
through the implementation of digital
innovations.
Theoretical Framework or Literature Review
The primary trajectory in the evolution of
contemporary society is the digitization of all its
spheres (Okhrimenko et al., 2019). Modern
information technologies are an integral part of
our lives and constantly influence various
economic, social, technical, and managerial
systems (Plakhotnik & Pavlenko, 2022; Order
No. 67-p, 2018).
The processes of digitization play a vital role in
the development of economic activity and the
security of national economies (Rudenko, 2018;
Tokar, 2022); Miethlich et al., 2020). As a result,
the establishment and rapid development of the
digital economy, characterized by the
comprehensive implementation and application
of new information technologies in all areas of
economic life, are global trends in the
development of the world economy (Yanenkova,
2017; Dovgal & Makhova, 2020; Tokar et al.,
2023; Kasianova, et al., 2020). Modern scientific
literature defines digitization as an integral
component of the contemporary global economy,
which contributes to more rational resource
management (Borblik, 2022), optimization of
business management models (Bushman, 2021),
and structural changes (Нlazova, 2021). A
collective of researchers underlines that digital
transformation is a natural process of societal and
business development (Riabov & Riabova, 2021;
Zhavoronok et al., 2022; Нlazova, 2021;
Vdovichena et al., 2022). This evolutionary stage
is unique as it eliminates barriers and globalizes
the market. Success or failure in this so-called
race will divide the world into two classes:
conscious leader countries that create values and
innovations shaping the future, and countries that
lag in civilization (Dorosh-Kizym et al., 2020).
According to Yanenkova (2017), the basis for
successful integration into global value chains
lies in developed innovative ecosystems of high-
tech industries, which can serve as a foundation
for advanced sectoral and regional clusters, and
where deeper smart specialization takes place.
A similar view is held by Dovgal & Makhova
(2020), noting that there is a direct link between
the development of the digital economy in a
country and the well-being of its population:
without improved well-being, the real
establishment of the digital economy becomes
challenging, and without it, the growth of well-
being becomes practically impossible.
Therefore, as emphasized by Bank (2021), the
digital development of Ukraine plays a
significant role in accelerating the country's
economic and social development, directing its
economic and innovative potential toward
international competitiveness and increasing the
efficiency of the Ukrainian industry.
The establishment of the digital economy can be
seen as an attractor, a gravity point in the
trajectory of the country's economic
development. Unfortunately, Ukraine currently
lacks a unified view on the transition to the
digital economy (Mosiichuk & Poita, 2020),
which is the main reason for the divergence of
efforts and low effectiveness in the country's
digital sphere (Novikova, Diachenko, &
Holovnia, 2022). Researchers note that Ukraine,
with significant IT potential, is operating below
its digital capabilities (Spivakovskyy et al.,
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2021). The measures outlined in the adopted
concepts lay the foundation for digital
transformation aimed at digitizing business
processes (Viknianska et al., 2021). It's crucial to
acknowledge that the advancement of digital
technologies is inexorable in today's world, and
the level of effectiveness and the future we'll
inhabit largely hinge on our choices and actions.
A group of researchers led by Novak et al. (2020)
emphasizes that the implementation of digital
technologies requires Ukrainian policymakers
and public figures to apply economic,
production, and social mechanisms aimed at
supporting precise digital development,
preparing qualified specialists with up-to-date
knowledge, and creating a favorable atmosphere
for the development of domestic digitization.
Despite this, a significant number of problems
regarding the further development of the digital
economy remain insufficiently studied. The
dynamic development in the field of digital
innovations requires regular research and the
development of more advanced methods to
accelerate their implementation into the national
economy.
Results and Discussion
To what extent has Ukraine embraced digital
technologies in various sectors of its economy
and society?
The digital economy, as a key feature of modern
times, influences all spheres of social life. As a
global economic trend, digitization has varying
effects on these spheres, but the extent of its
impact on a country's economic and social
environment determines its position in the
international community. The process of
digitization not only plays an important role in
the social and economic development of a
country but also helps channel innovation
potential in the right direction and establish
competitiveness in the global market
(Sokolovska, 2020). Digital technologies form
the basis of a circular economy. By a closed-loop
economy, we mean the secondary, nonlinear,
closed utilization of all available material and
natural resources to ensure production and
consumption without losing the accessibility of
goods and services developed through innovation
and the use of information technologies
(Ladonko et al., 2022). The systematic
combination of digital technologies provides the
greatest economic effect in the practical
application across various sectors of social
production, ranging from industry to various
service sectors (Plakhotnik & Pavlenko, 2022).
The term "digital economy" was first used in
1995 by American scientist Nicholas Negroponte
from the Massachusetts Institute of Technology,
who described the advantages of utilizing new
information and communication technologies as
a factor in shaping a new economy (Rudenko,
2018). To establish the fundamental prerequisites
for the effective integration of digitization into
the economy, it is imperative to precisely
articulate its essence and fundamental
components. It's worth noting that a universally
accepted interpretation of the term "digitalization
of the economy" within economic theory is
currently lacking (Borblik, 2022). An analysis of
theoretical developments has allowed for the
systematization of theoretical approaches to
defining the concept of the digitization of the
economy (Table 1).
Table 1.
Theoretical approaches to defining the concept of economic digitalization
Name of the approach
Essence of interpretation
Time-space
A catalyst for worldwide economic expansion with the goal of hastening economic progress,
enhancing the efficiency of established sectors, fostering the emergence of fresh markets and
industries, and realizing inclusive, sustainable growth.
A new type of economy based on knowledge and digital technologies that creates new digital
skills and opportunities for society, business, and the country.
Functional
The utilization of digital information technologies for the consumption of goods and services,
including e-government and online commerce, among others.
Communicative
This type of economic activity emerges as a consequence of countless network connections
among individuals, companies, devices, data, and operations. At its core, this phenomenon relies
on hyperconnectivity, characterized by the increasing interlinking of individuals, organizations,
and machines, driven by the Internet and mobile technologies.
Processual
The development of a technology-driven system aimed at generating additional income streams
and broadening the horizons of economic possibilities for a business entity.
The proactive incorporation and real-world utilization of digital technologies for gathering,
processing, storing, converting, and transmitting information across all domains of human
endeavor.
Systematic
A process or ecosystem that encompasses the comprehensive conversion of all sectors of
economic activity into a digital economy in its broadest interpretation.
Source: (Borblik, 2022; Ministry of Electronics and Information Technology, 2021).
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When systematizing the perspectives on
comprehending the core of economic
digitalization, it's crucial to recognize that the
temporal and spatial approach regards it as a
phase within the evolution of the global
economy. The functional approach delves into
the essence of economic digitalization by
emphasizing the content and crucial activities
conducted in establishing an economic
framework via the Internet. Meanwhile, the
communicative approach uncovers economic
digitalization as the process of interaction among
diverse business entities. The processual
approach centers on the immediate
transformation of the economic system. Lastly,
the systematic approach conceives the
digitalization of the economy as a unified system
composed of interconnected components
(Sokolovska, 2020).
Нlazova (2021) states that digitalization of the
economy allows:
• improving business processes in the country;
• creating new products and services using
Internet technologies, cloud services, virtual
reality, and artificial intelligence;
• reducing costs by minimizing personnel
through automation and robotization of
business processes;
• offering completely new business solutions:
peer-to-peer systems, modern insurance
models, mobile educational applications,
alternatives to banking services,
personalized advertising, and individual
targeting for online shoppers.
Before the adoption of the Concept, Ukraine had
introduced the Digital Agenda in 2016, with the
goal of endorsing key areas, initiatives, and
digitization projects until 2020, aligning with the
Europe 2020 Strategy to enhance opportunities
for Ukraine's development in partnership with
the EU. This document outlined the foundational
principles for advancing Ukraine's digital
landscape on a national scale and laid the
groundwork for the growth of the digital
economy (Ministry of Economic Development
and Trade of Ukraine, 2020).
According to Yanovska et al. (2019), the main
statements of this document were the following:
• every citizen has the right to access digital
technologies, the Internet of Knowledge;
• digital technologies should become a tool for
achieving certain development goals of
various sectors of the national economy;
• the possibility of additional investment
attraction;
• creation of predominantly Ukrainian content
to meet national needs, which will contribute
to the development of not only the economy
but also social and cultural development;
• Ukraine's integration into the global and
European communication system;
• the need to create digitalization standards
that will increase competition and reduce
costs and production costs;
• compliance with international standards in
the financial sector;
• avoiding the orientation of the digital
economy exclusively in private business;
• ensuring cybersecurity measures at the state
level;
• protecting the rights of Internet consumers;
• the government should play a key role in
preparing, developing, and promoting
national digital strategies.
Over the next few years, the Ministry and
Council of Digital Transformation developed a
series of projects that became particularly
important in COVID-19 and during the state of
war in Ukraine (Plakhotnik & Pavlenko, 2022).
Among the projects presented were e-School, e-
Notary, e-Social Protection, e-Property, e-
Permit, and many others. Additionally, an
important step in this direction was the adoption
of the Law on March 30, 2021, "On Amendments
to the Law of Ukraine 'On the Unified State
Demographic Register and Documents
Confirming the Citizenship of Ukraine,
Identifying a Person or Their Special Status'.
In the context of war, the issue of migration at the
national level has also become particularly
relevant. In Ukraine, by October 30, 2022, more
than 7 million Ukrainians were internally
dislocated due to the war. More than a million of
them are children. Although 60% of the territory
of Zaporizhzhia region was occupied during the
Russian military invasion, the city of
Zaporizhzhia nevertheless remains a
humanitarian hub for internally displaced
persons (IDPs) from Zaporizhzhia, Donetsk,
Kharkiv, Sumy, Kherson and other regions of
Ukraine (Plakhotnik & Pavlenko, 2022).
The Ministry of Digital Transformation has
developed new government services for
internally displaced persons (IDPs) on the
unified "Diia" portal. Among these services are
services related to registration, payments, job
search, business registration, obtaining candidate
status for adoption, family creation, childbirth,
and improving digital literacy through
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educational mini-series, and many others
(Zhavoronok et al., 2022). The next area of
activity is countering the aggressor in
cyberspace, which is referred to as the "fifth
theater" of military operations. In the conditions
of a large-scale war with Russia, Ukraine is
repelling constant aggression and paying
attention to its cybersecurity. Projects related to
this include CryptoFund, IT Army, Starlink,
digital blockade, and others. Since March 2022,
the Ministry of Digital Transformation has
identified three key directions of activity for its
team: firstly, utilizing Ukraine's IT Army to
counter invaders in cyberspace; secondly,
exerting sanction pressure on Western
companies; and thirdly, developing new
products.
The most powerful volunteer team, consisting of
over 300,000 individuals, has been created to
unite for Ukraine's victory in cyberspace.
Activists have been engaged in further attacks on
the enemy's state and private resources. It is also
worth noting that military bonds have been
issued to support the Armed Forces of Ukraine
and our economy. Ukraine actively cooperates
with leading organizations to raise awareness of
cybersecurity issues at all levels of commercial
and non-profit entities (Plakhotnik & Pavlenko,
2022).
ISACA has opened a branch in Kyiv for the
development of methodologies and standards in
IT management, audit, and security. It provides
advanced guidance to cybersecurity
professionals, assisting organizations and experts
in overcoming challenges in technology and
information management, control, and
facilitating the implementation of IT
management processes (Tokar, 2022).
A subdivision called CERT-UA, the State Center
for the Protection of Information and
Telecommunication Systems, has also been
established. It detects and responds to cyber
incidents and ensures the mitigation of threats to
both foreign and private sectors. It provides
cybersecurity professionals with significant
resources to assist them in information and
technology management and control. Various
educational programs in cybersecurity are also
being introduced in higher education institutions
(Bulkot, 2021). The third direction is the further
development of the information technology
industry, exporting its services, fulfilling
contracts, generating foreign currency inflows,
and supporting the domestic economy. Ukraine's
status as a candidate country for EU membership
and the opportunities provided within the
"Digital Europe" program for financing various
digitalization projects will contribute to the
progressive development of the digital economy
in the conditions of a state of war. The program
mentioned contributes to the process of
digitalization in European countries in various
ways. In order to participate in the program,
countries are required to make a contribution.
However, the EU exempted Ukraine from paying
the contribution for the year 2022 and provided a
95% discount on contributions for the years
2023-2027 (Plakhotnik & Pavlenko, 2022).
The project financing under the "Digital Europe"
program operates in five main directions (Figure
1).
Figure 1. Main areas of project funding under the Digital Europe program
Source: created by the author based on (Plakhotnik & Pavlenko, 2022).
High-performance
computing
Cybersecurity
Advanced digital
technology
Areas of project
funding
Widespread use of digital
technologies in business
and society
Artificial intelligence,
data and cloud services
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As per the Ukrainian Institute for the Future, the
"Economic Strategy of Ukraine - 2030" outlines
two potential paths for the growth of Ukraine's
digital economy. These scenarios are contingent
on the evaluation of the significance and urgency
of implementing substantial changes in the
conventional economy: the inertia (evolutionary)
scenario and the target (compelled) scenario.
(Ukrainian Institute of the Future, 2021). The
inertia scenario foresees the persistence of
historical patterns, encompassing the gradual
adoption of technology, economic digitization,
and human capital development. In this scenario,
Ukraine's economy is expected to remain
inefficient, labor migration will persist, and
domestic production will struggle to maintain
competitiveness in international markets.
Conversely, the target scenario envisions a swift
transformation of the Ukrainian economy over a
5-10 years period, with a substantial portion of
the digital economy, accounting for up to 65% of
GDP. Realizing a GDP of 1 trillion dollars is
within Ukraine's reach, but it necessitates the
integration of information technologies across all
sectors of the economy (Ukrainian Institute of the
Future, 2021).
Figure 2 shows that by 2030, digital products will
account for 65% of the overall economy.
However, to achieve this, the Ukrainian market
needs to produce and consume information
products worth 4 billion dollars by 2024, and by
2030, this figure is expected to reach
approximately 16 billion dollars.
Figure 2. Adoption of digital technologies and their impact on Ukraine's GDP by 2030
Source: (Borblik, 2022; Ukrainian Institute of the Future, 2021).
According to the Ukrainian Institute of the Future
(2021), to achieve this goal, it is necessary to invest SD 70 billion in digital technologies over
the next ten years (Table 2)
Table 2.
Prospects for the digitalization of Ukraine's economy in 2021-2030
Indicators
2021
2025
2030
Total 2021-2030
Investments in digital infrastructure, USD billion.
0,7
3
6
16
Investments in the digitalization of business, manufacturing,
and industry, USD billion.
1,5
5
14
70
Increase in productivity through digitalization, %.
1,1
1
13
Additional GDP generated by digitalization, USD billion.
17
93
280
1 260
Additional GDP, %.
11
44
95
240
Number of new vacancies (excluding the export IT industry),
thousand people
150
300
700
Share of the digital economy in Ukraine (in total GDP), %.
3
15
65
Source: created by the author based on (Ukrainian Institute of the Future, 2021)
The process of digitization is of crucial
importance for the Ukrainian economy, as it can
increase the number of new jobs and contribute
to further growth in annual GDP. The
development of new segments and productions
will accelerate business and industrial
development (Нlazova, 2021). Furthermore,
researchers argue (Plakhotnik & Pavlenko,
2022).
3% 5% 8% 11% 15%
20%
28%
40%
52%
65%
0%
10%
20%
30%
40%
50%
60%
70%
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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that the labor market will create an additional
700,000 jobs if innovations are implemented in
all sectors of the economy. Financing for
digitization can come from both domestic and
external markets. Investments in the
digitalization of business, manufacturing, and
industry, USD billion.
Tokar (2022) note that according to the Network
Readiness Index and the Digital Competitiveness
Index in 2021, Ukraine ranked 50th in terms of
the level of digitalization of its economy.
What are the primary challenges and barriers
hindering Ukraine's digital transformation?
We believe that this situation is undoubtedly
associated with a series of major systemic
problems that exist in Ukrainian society and the
national economy.
In our opinion, these problems can be
categorized into the following groups:
1. Economic barriers that hinder information
and technological development within the
national economy.
2. Institutional barriers arise in the functioning
of state institutions and their participation in
supporting the processes of digitalization in
society.
3. Institutional barriers of a social nature, are
characterized by historical formation and
complexity in finding short-term solutions.
4. Infrastructure barriers arise in the sphere of
supporting digitalization processes within
the functioning of economic systems at
various levels.
Yes, economic issues are always relevant to
Ukraine's economy, particularly in terms of its
innovative development. The current process of
digitalization in the national economy is quite
chaotic. It should be noted that the country has a
certain system of support for the implementation
and utilization of such technologies by various
enterprises. On the other hand, the digitalization
of businesses is primarily the task of their
owners. However, this requires resources,
particularly affordable funding. In this regard,
there are also several problems in our country.
Unfortunately, credits for business entities are
currently too expensive. Consequently, the
processes of digitalization primarily occur with
the help of funds from business owners.
Entrepreneurs whose businesses are fully
dependent on new information and
communication technologies actively implement
digitalization (Spivakovskyy et al., 2021).
Therefore, the systemic economic problems that
hinder the development of Ukraine's digital
economy include a lack of accessible financial
resources for small and medium-sized
enterprises; the absence of systematic and
consistent support for the development of
domestic ICT; cyclical macroeconomic
instability; low levels of household income, etc.
Institutional barriers directly arise in the sphere
of state regulation of the digitalization processes
in Ukrainian society and are mainly related to the
ineffective functioning of government bodies,
inadequate levels of interaction, and low quality
of regulatory policies implemented in the country
(Verbivska, Lutsiv, Dehtyarova, Melnyk &
Domin, 2022). These barriers include systemic
destructive processes within government
institutions (corruption, lobbying, shadow
economy influence), discrepancies in the
implementation of adopted regulatory acts,
insufficient funding for measures defined by
legislative acts, divergent priorities of
digitalization between Ukrainian society and
economic entities, discrepancies in efforts to
implement specific measures to enhance the use
of digital technologies, inadequate participation
in the development of digital infrastructure,
mismatch between state financial capabilities and
measures intended to stimulate digitalization,
low effectiveness of state support and regulation
of scientific development, and insufficient digital
competence of government officials.
Institutional problems are complex and may
require a longer-term perspective for resolution.
However, addressing these issues allows for the
formulation of a firm foundation for the further
implementation of digital technologies across all
sectors of society. Such barriers are undoubtedly
associated with historical aspects of the country's
development, the peculiarities of national
economic development, openness, and
participation in the global economy. These
obstacles include low levels of trust in
government institutions, insufficient digital
literacy among the population, a tendency
towards informal economic activities, difficulties
in adapting business entities to new digital
technologies, value orientations of the younger
generation, a tendency towards studying and
living abroad, the digital divide in the digital
economy, low levels of security and trust among
internet users, insufficient levels of information
culture, and more.
Infrastructure barriers to the development of the
digital economy are directly linked to economic
problems. In this context, the systematic
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importance of digital infrastructure for the
development of information and communication
technologies in Ukrainian society is primarily
considered Plakhotnik & Pavlenko (2022)
including the following aspects the high cost of
mobile communication, uneven access to
network technologies, regional digital inequality,
insufficient competition among companies in the
telecommunications sector, underdeveloped
satellite communication, and the absence of a
stable national policy regarding the import of
equipment necessary for the development of
network infrastructure.
What steps should Ukraine take to ensure a
seamless process of digitalizing its economy and
addressing the challenges it faces in this
endeavor?
Therefore, to ensure a seamless process of
digitalizing the economy, the following measures
are envisaged:
1. Reduce regulatory and administrative
burdens for businesses and introduce new
support tools for small and medium-sized
enterprises by implementing a list of market
access regulation instruments based on a
risk-oriented approach, digitalization, and
integration of tools.
2. Increase access to markets for high-value-
added products, including transitioning to an
innovative economy using digital
technologies, ensuring full access to EU and
G7 markets, including by:
• Developing innovative priorities to facilitate
the transition to an innovative economy.
• Creating favorable conditions for exporting
products and developing innovative digital
technologies (Verbivska et al., 2022).
• Developing a support system for innovation-
driven economic development through
innovative priorities and tax incentives for
entrepreneurs (Tokar et al., 2023).
• Providing primary and targeted (priority)
financing for innovation development
sectors (Sokolovska, 2020).
• Improving the intellectual property
protection system.
The identified infrastructure barriers to the
development of the digital economy in Ukraine
highlight significant challenges that need to be
addressed. The high cost of mobile
communication, uneven access to network
technologies, regional digital inequality, and
insufficient competition among
telecommunications companies are key issues
that hinder the widespread adoption of digital
technologies. Overall, addressing the
infrastructure barriers and implementing the
suggested measures can pave the way for a
thriving digital economy, stimulating economic
growth, and positioning Ukraine as a competitive
player in the global digital landscape.
Conclusions
The findings of the conducted research reveal a
step-by-step shift of the national economy
towards the digital realm, while taking into
account the aspects of European integration.
Even in the midst of the ongoing conflict,
Ukraine persists in its digital transformation
efforts and the advancement of the digital
economy. Efforts are being made to ensure
institutional support for these processes and
create conditions for innovative business
activities. The participation of Ukraine in the
"Digital Europe" program plays a significant role
in this process, aiming to accelerate economic
recovery and digital transformation in
participating countries. Research on the main
obstacles to the successful digitalization of the
Ukrainian economy shows that significant
attention needs to be paid to the economic,
institutional, institutional, and infrastructure
aspects of the economic sphere. In our opinion,
the successful implementation of a seamless
process of digitalizing the economy requires the
implementation of a list of market access
regulation instruments based on a risk-oriented
approach, digitalization, and integration of tools,
as well as transitioning to an innovative economy
using digital technologies and ensuring full
access to EU and G7 markets.
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