Igor Mazepa, investment banker, CEO and founder of Concorde Capital, told Economichna Pravda why Ukrainians should invest in technology and innovation rather than apartments in new buildings.
The pandemic has significantly affected the situation in the investment market. Consumption fell, followed by production. Investment has begun to migrate from the real sector to industries growing despite the global quarantine: technology solutions and IT.
People began to order food at home - the scope of applications for delivery has grown. Everyone began to communicate remotely - the scope of programs for online conferences and training has grown.
Cybersecurity has gained new value as the number of people who are forced to rely on online tools in their daily lives has increased.
The pandemic is temporary, but the online transition it has triggered is irreversible. If before it was gradual, then in 2020-2021 there was a leap: the distance, which would have taken five years, we passed in a year.
One peculiarity of online is that people do not return from it. Those who switched from analog to digital products do not go back, even if the initial decision was made under the pressure of circumstances.
Where do Ukrainians invest? In construction. In agriculture. We are the homeland of endless black earth and endless sedges growing on them. Big investors, medium, small - the size is not important, just such a tradition.
Suppose there is a senior Ukrainian IT specialist. He works in an American or Ukrainian "unicorn", has attracted huge rounds of investment and earns a lot of money. Where does he invest his $ 100,000 when it appears? Buy an apartment in a new building. Then he will hand it over. This is an investment plan.
Investment plans of medium and large investors often differ only in the number of residential or commercial spaces they can buy.
That is, even working in the most tumultuous industry in the world, even in a country where this industry is developing faster than anywhere else - in Ukraine, even with the resources and desire to invest them, people tend to choose conservative ways to invest money.
"We've always done that," is a logical decision to invest in real estate or agriculture. Pragmatic, but not adventurous.
The Ukrainian IT market is growing by 20-30% annually. It is dynamic, not overheated, has a growth potential of up to 50-60%. Ukrainian unicorns become decacorns.
"IT and technology – it’s the new gold and oil. However, in Ukraine they still invest in resources or real estate, rather than in ideas,” Igor Mazepa said.
The capitalization of IT businesses exceeds the capitalization of the oligarchic economy: the factory economy is losing ground under the pressure of the idea economy. These ideas are very expensive and their price will only increase. After all, with each passing day comes a future in which artificial intelligence will share the risks across portfolios.
However, the tradition of investing in Ukraine remains archaic: investing in something reliable, conservative, strong, in what was invested in the 1990s.
“The situation has changed. It is time to gradually change investment preferences. To attract attention, I founded the annual Mazepa Awards. It is dedicated not only to investors, but also to investment projects, namely - projects in technology, innovation. The goal of the Mazepa Awards is to show investors what is happening outside the bank-LCD-agricultural holding. I sincerely hope that the Mazepa Awards will change the culture of investing in Ukraine. And that the world's top investors will soon enter the Ukrainian technology industry”, said Igor Mazepa.