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Henry M. Robert

Additional 14 billion hryvnias of GDP from the Internet

Google has proven the dependence of business incomes from its activity as an Internet user. Read the exclusive interview with the director of the Ukrainian Google office in the upcoming issues of The Day
19 November, 2013 - 11:40
Photo by Mykola TYMCHENKO, The Day

The companies actively using the Internet have better possibilities for incomes growth as compared to the companies using the Internet less actively. This advantage makes 6.6 percent of the growth rate. This is what the analysts of the company GfK Ukraine are sure of. On November 13 GfK Ukraine and Google presented the results of the research “The influence of the Internet on the Ukrainian economy.”

By the way, the authors of the research emphasize that it is the first deep analysis of this issue. During the research the analysts have found out in what way and how actively the Ukrainian companies of different size and different areas use the Internet and if there is a connection between using the global net and profitability.

In general, the analysts have made three main conclusions. The first one is that in 2012 the companies actively using the Internet in Ukraine successfully expanded their businesses, reached a higher profitability level, and ensured higher salary growth rates for their employees as compared to those using the virtual space less actively. The second conclusion is that in the conditions of economic growth the business that actively uses the Internet grows by 6.6 percent better than its less “advanced” competitors and, accordingly, in the conditions of GDP falldown the losses of the active Internet users are 6.6 percent lower than the losses incurred by the businesspeople who struggle with the Internet. According to the calculations of GfK analysts, in 2012 the incomes of the companies actively using the Internet decreased only by 0.7 percent, whereas the incomes of the companies using the Internet less actively in average went down by 7.3 percent. The third and the main conclusion is the following: in case the real Ukrainian economy starts using the Internet more actively by 10 points, the GDP will grow by 1.2 percent. “In money terms it would make additional 14 billion hryvnias,” the research reads. Despite all the advantages, the part of the companies actively using the Internet is quite small in Ukraine, Google representatives remarked. Only 62 percent of companies have their own websites, 49 percent place the information about them in the Internet guides, 22 percent have their profiles in social networks, and only 12 percent sell their produce online. When speaking at the presentation, the director of the Ukrainian Google office Dmytro Sholomko emphasized that one of the main tasks of the office he heads is promoting the Internet in Ukraine. The analysts stress that there is a lot of work in this sphere. “If we summarize the results of the research and assess the activity of the Internet use with the scale from 0 to 100 points, the current Internet use index we calculated makes only 25. The potential is concentrated in the regions. This is where the companies lag behind using the Internet,” GfK emphasized.

In its turn the government promises to help remedy the situation. This is what the First Deputy Prime Minister Oleksandr Vilkul present at the conference emphasized.

“IT sphere is the one Ukraine can compete in with the leading countries. That is why the Ukrainian government has granted benefits to the IT companies. The new rules provide for exempting informatization services from VAT; the income tax of 5 percent, and the profit tax of 5 percent for IT companies,” he emphasized.

After the presentation, in his exclusive commentary to The Day Vilkul assured: despite the fact that Ukraine does not have a unified document called “The development strategy for the IT industry” the government is doing its best to help this sphere of business. “The project ‘Bionic Hill’ with 35,000 workplaces is being implemented, as well as the project ‘Open World.’ The last one is almost completely funded by the government. As for the ‘Bionic Hill,’ the government has allocated 50 million hryvnias so far. We are mainly helping with the communication... We are implementing the initiatives of exempting IT companies from taxes. That is why the absence of a unified document does not prevent us from moving ahead. The government has always supported the IT sphere and will always do it,” Vilkul emphasized. To sum up, he assured: the Ukrainian IT workers will get their strategy next year. “The working group developing the strategy comprises the representatives of the largest Ukrainian IT companies and the government. The direction of their work is developing the IT industry and implementing the electronic government… Next year we will have the strategy for sure,” Vilkul assured The Day.

By Alla DUBROVYK, The Day
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