In 2017 21.9% of the total expenditures on R&D were spent on fundamental
research, which 92.4% was financed from the budget. The share of applied research
expenditures amounted to 23.6%, which was 51.5% financed from the budget and
27.6% at the expense of the enterprises [6]
The volume of funding for R&D and innovation in Ukraine is not sufficient. The
share of R&D in the GDP has been decreasing. Ukraine underperforms in R&D
expenditure per worker in relation to its peers. Low R&D intensity is driven by not
only the large number of firms that do not perform any formal R&D but also by low
intensity among those that do conduct R&D. This relative underperformance is driven
by the low use of foreign technology licenses by Ukrainian firms.
The share of foreign investments in R&D in Ukraine peaked at about 25 percent
of gross domestic expenditure on research and development (GERD) in 2010–2013 but
has dropped due to the political and economic instability since 2011 and the recent
military conflict in the occupied eastern regions. In 2005, this share was 24.8 percent,
and in 2014, 19.8 percent.
Low innovation capacity of research organizations and poor incentives to
collaboration hinder potential cooperation between science and industry. The
interaction between the research sector and industries and within the research sector
(between universities and academic institutes) is weak. Lack of information on
opportunities of such cooperation, high costs faced by organizations in search for
partnerships, lack of commercial orientation among research institutes and universities,
and inefficient technology transfer infrastructure are all hindering collaboration
opportunities. Ukraine’s state policies aim at closing this gap through different
strategies: creation of research infrastructures for joint use by different research
organizations, creation of organizations facilitating technology transfer, provision of
grants to promote R&D cooperation between universities and research organizations,
and establishment of technology parks.
Brain drain of innovation skills remains a problem, and investment in
inventiveness is decreasing. Ukraine has a well-developed education system.
University enrolment and higher education attainment in Ukraine are high. The
Ukrainian research system is weak concerning both scientific and technological outputs
as shown by international indicators relating to scientific production (publications and
impact factors) and technological production (patents) [12].
R&D infrastructure remains large but with some exceptions is considered
outdated. The number of researchers in Ukraine has decreased five times since 1990,
while the number of R&D performing organizations has dropped from around 1,400 to
around 1,000 Many institutions perform R&D, but most of this R&D does not have a
commercial focus, and when it does, it is linked with noncompetitive state-owned
enterprises (SOEs). The number of researchers, however, highlights the strength of
- 779 -