Business news from Ukraine

As we know, personnel are everything. This is not just an empty phrase, because in science, where training sometimes takes decades, the future of a country is determined by the availability of qualified researchers.

After the collapse of the USSR, where scientists occupied an honorable place in the hierarchy of professions, Ukraine acquired one of the largest research systems in Europe. The scientific school of the Ukrainian SSR era was known for its advanced technologies and groundbreaking ideas. Subsequently, in the early years of independence, changes in the structure of the economy began. While in 1991-1995 the share of industry in GDP exceeded 40%, by 2024 it had fallen to 19.0%, and the service sector had taken the lead, growing from 40% to over 70%.

The country’s economic problems and economic transformation also led to a reduction in funding for science. The dynamics of this reduction are shown below:

Table 1. Dynamics of expenditure on research and development in 2010-2023.

The share of science spending in gross domestic product (GDP) has been steadily declining since 2010 and has fallen to 0.33% in recent years. Back in 2017, the World Bank noted that “…the current innovation policy and corresponding state funding do not meet the critical needs of the Ukrainian national innovation system.” A significant reduction in funding has led to the disappearance of a number of scientific institutions (SIs) and a decline in the prestige of scientific work. Young people are not going into science because of low salaries and the low status of scientists. It cannot be otherwise, given that the salary of a senior researcher at the National Academy of Sciences of Ukraine is 13,034 hryvnia.

All this has led to increased migration, a decrease in the number of scientists, and a loss of opportunities to reproduce human resources. The number of personnel in the field of research and development (R&D) has decreased sevenfold: from more than 400,000 people in 1991 to 63,800 in 2024. Below you can see the dynamics of the number of personnel engaged in R&D.

Fig. 1. Dynamics of the number of personnel employed in R&D in Ukraine

Table 2. Dynamics of the number of personnel employed in R&D in Ukraine

The period of sharp decline in the number of R&D personnel (1991-1999) was characterized by a drop in funding. Subsequently, in 2000-2008, the number of research personnel stabilized at 200,000. The financial crisis accelerated negative trends in the dynamics of R&D personnel. This was followed by the annexation of Crimea and parts of the eastern regions, and the war. In 2024, the UNESCO report “Analysis of war damage to the Ukrainian science sector and its consequences” noted that as a result of the Russian Federation’s aggression, 12% of scientists were forced to emigrate or move within the country. Of these, 6.3% were forced to emigrate to other countries, and 5.5% became internally displaced persons. About 30% of all scientists began to work remotely. In other words, there was a “brain drain” from science. According to some data, more than 20,000 R&D workers were temporarily displaced or left Ukraine in 2022. Thus, losses associated with the war were added to the traditional outflow of scientific personnel. Changes in the structure of science have also led to the disappearance of the previously massive category of designers and technologists. Ukraine’s recovery will take place through investment projects that will require a huge amount of design and technological documentation, which no one is left to prepare.

Table 3 shows that, in addition to the decline in the number of scientists, there is also an aging of science. The most numerous age group in science is scientists over 65 years of age. Scientists aged 55 and older make up about 40% of scientists.

Table 3 Number of researchers involved in R&D by age:

The situation with personnel in science is such that it can be described in the words of Ernest Hemingway: “Ask not for whom the bell tolls, for it tolls for thee.” And without personnel, there will be no science.

In the structure of science funding, the largest share is concentrated in the business sector – 59.9%, in the public sector it is 33.4%, and in the higher education sector – about 6.7% of expenditures. In terms of personnel, the public sector accounts for 49%, the business sector for 34.6%, and higher education for 16.4%. Scientific institutions and universities are predominantly state-owned. Research in universities is not a key activity and is largely separate from teaching.

The main channels of public funding are the Ministry of Education and Science, sectoral academies, and the National Research Fund of Ukraine. Another source is the foreign sector. In the pre-war period, foreign sources accounted for 20-25% of R&D funding in Ukraine. In the context of the war, foreign partners have stepped up grant funding.

For many years, Ukrainian science has been unsuccessfully trying to establish links with business due to the lack of a comprehensive policy aimed at supporting such cooperation. However, these efforts are often fragmented, short-term, and insufficiently integrated into national innovation and industrial strategies. The lack of coordination between universities, business, and government agencies hinders the development of an innovation system.

Another feature of Ukrainian science is the almost complete absence of funding from regional sources, which is incomprehensible given the decentralization and significant increase in community budgets, which are not being used for regional science. It appears that local authorities know nothing about science and do not want to use it.

The negative changes in the state of Ukraine’s scientific human resources urgently require state intervention to stabilize and further reduce these influences. The state body responsible for the development of science, the Ministry of Education and Science, is monitoring these trends and attempting to change the situation.

Recently, the Ministry of Education and Science prepared the Concept for the Support and Development of Human Resources in the Field of Scientific and Scientific-Technical Activities, “National System of Researchers of Ukraine” (NSR), which was approved by the Cabinet of Ministers of Ukraine. The concept “aims to identify, recognize, support, and promote the best Ukrainian scientific and scientific-pedagogical workers who have achieved outstanding results in scientific and scientific-technical activities and made a significant contribution to the development of science in the country, as well as to provide them with further individual financial support.” Support will be provided to scientists on the basis of questionnaires, regardless of their current ability to conduct research.

The proposed NSD is based on a rating assessment of scientists’ achievements, with additional funding for the best researchers. However, distributing money based on questionnaires among a limited number of scientists, as is essentially proposed, is not rational.

The set of indicators for determining the best mainly duplicates the indicators used in state certification of institutions. It is unclear how the summarization will be carried out and how the characteristics of different scientific disciplines will be taken into account. And how, for example, can a representative of fundamental science be compared with someone from an industry or a theoretical physicist with a lawyer? Furthermore, scientists perform different functions in scientific teams: some generate ideas, some conduct experiments, etc.

Furthermore, with the support of individual scientists, the place and role of creative teams and infrastructure and information support are completely negated. Scientists do not work alone, but as part of teams with their own functions.

The use of mechanistic approaches to ratings will primarily support scientists with many years of experience in science and managers (they have better publication indicators, in particular thanks to the opportunities for co-authorship and the “duration” of scientific work). It is impossible to apply the same requirements to everyone. Therefore, the general ranking of Ukrainian scientists is an artificial measure. In developed countries, such rankings are not conducted. The idea of distributing funds among scientists based on rankings is not new. In Ukraine, there was an attempt to create something similar in the Lviv region. There are no mentions of its results.

Another example of support for scientists at the national level is Mexico, where the NSD has been operating since the mid-1980s as a response to the mass emigration of scientists to the United States. It is difficult to assess the effectiveness of this system because, in addition to it, the government has applied other incentives, in particular various grant programs. However, the level of emigration of scientists from Mexico remains high, and the results of the impact of the creation of the NSD are unclear to its initiators. Other Latin American countries with similar problems have not introduced it.

Ukraine needs solutions that are not copies of foreign models, but responses to its own challenges. To overcome Ukraine’s personnel problems in science, it is necessary to:

1. Strictly comply with the provisions of the Law of Ukraine “On Science and Scientific Activity” with a level of funding for science at 1.7% of GDP.

2. Make scientific work prestigious by significantly increasing scientists’ salaries, which will ensure the competitiveness of Ukrainian science.

3. Ensure acceptable basic funding for universities and substantial funding on a competitive basis, as well as partial funding for regional science and education institutions from local budgets.

4. Create and implement mechanisms for financing regional science aimed at solving regional problems from community budgets.

5. Introduce a number of specialized competitions at various levels (national, regional, departmental, etc.), including in cooperation with foreign partners, where the customers would be national government bodies, regions, and private companies seeking to solve priority problems. This will lead to the financing of scientific teams for work on relevant projects, rather than individual scientists receiving rent for questionnaires.

6. Allow only organizations from the “Register of Scientific Institutions” to participate in competitions for research using budget funds.

Today, Ukrainian science is on the brink of survival. Without systematic action on the part of the state and society, we risk losing the intellectual capital necessary for the restoration and modernization of the country.

Author: Volodymyr Khaustov, scientific secretary of the State Institution “Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine”, Honored Economist of Ukraine, Candidate of Technical Sciences.

Source: Experts Club Information and Analytical Center.