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Oleksandr Danchenko: Digital economy. Ukrainian style

Our country has developed its own specific understanding of the “digital economy” – the amount of numbers that can be stolen.
In 1993, former Editor-in-Chief of the Harvard Business Review, Joel Kurtzman, wrote that the money had lost its power in the traditional sense. He called the new currency “megabyte money” and added that very few people could understand the consequences of this fact. 23 years later, in Ukraine, the centre of Europe, still few people understand – the future belongs to digital economy.
At present, the best sample of digital economy is the United Kingdom – “digits” account for 12.4% of the country’s GDP, while the average figure for the G20 countries is 5.3%. IT-sector companies are becoming the most expensive in the world by the level of capitalization. In 2011, Apple for the first time for one day became the most expensive company in the world with the capitalization of $ 341.5 billion having surpassed the famous oil refining giant. Today, “Apple” is the first in the top 10 most expensive companies of the world; apart from them there are other four IT companies in the top 10.
So what is the digital economy in layman’s terms? This is improvement of the quality of life of citizens and improvement of the investment climate for the business, development of innovative products for other sectors of the economy in order to increase their capitalization, e-government at all levels, ensuring of public safety, development of digital content, and preservation of all cultural heritage. The secret of economic success of Singapore, which being one of the poorest developing countries has become an economic miracle, lies in the Smart Nation project. It brought together scientists, businesses, government officials, opinion leaders in order to introduce IT into everyday life. This is a multi-pronged project covering absolutely all spheres of human life and human interaction with the environment. The initiator and lobbyist of the Smart Nation project was the Government of Singapore. In the ranking of Transparency International in 2015 Singapore was eighth in terms of corruption fighting; by comparison, Ukraine is 132nd.
So what about Ukraine? In a nutshell, the situation is sad. And this is despite the fact that the sector of information and communication technologies (ICT) is among the top three exporters and generates 4% of GDP of the country.
In the index of economic freedom Ukraine is 162nd with the status of a repressed economy. We are below Laos and Papua New Guinea. The concept of economic freedom is based on the ideas of Adam Smith and it includes several criteria, among which there are the degree of technical modernization and the level of infrastructure development. In the whole world it is the ICT industry that is responsible for these two areas.
On September 20, there was an IT day in the Verkhovna Rada. Seven key bills laying the foundation for digital economy in Ukraine were presented for the deputies’ consideration. Six of them were adopted in the first reading. ICT market stakeholders had publicly promised the MPs that they would take to the streets if these laws were “killed”. It seemed that the state had taken this to heart. However, while the Parliament was considering the legislation, there were searches and confiscation of equipment by the Security Service in one of IT-companies in Kyiv. This is despite the fact that a bill that prohibits such actions of law enforcement was adopted in the first reading. How should international community treat these actions?
So we are declaring our willingness and commitment to change, we are demonstrating the level of innovation, we are attracting European Union deputies to the legislative framework reforming; and then there appears an investigator who, following someone’s orders, seizes equipment and hinders the work of an IT company. Are these the attempts to show who the boss at this market is? The only problem is that the IT employees do not strive to become bosses; by their daily work they make every effort to promote the economic growth and to improve the status of Ukraine in the international arena.
We have no intention to take part in this crazy race. IT is a new generation of progressive people who are interested in the development of the country, rather than their own enrichment. And yet our country has developed its own specific understanding of the “digital economy” – the amount of numbers that can be stolen.

Oleksandr Danchenko
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