Last month saw the launch of the Innovations Development Platform (IDP), Ukraine’s first agency dedicated to the incubation and development of innovative defense projects.
Inspired by Israel’s Chief Scientist’s Office, this public-private partnership initiative aims to bring together developers, experts and investors “to develop innovations for the Ukrainian army and foreign partners in transparent commercial conditions.”
Developers with the most promising ideas will be selected from local higher education institutions, R&D organizations, design bureaus and enterprises. They will benefit from the agency’s expertise and equipment.
Priority will be given to projects that can be implemented by the military in less than two years.
Investors will be involved in each of the selected projects to ensure serial production.
The IDP was launched by Spetstechnoexport, a state enterprise for arms import-export, in partnership with industry association Ukrainian Defense Industry and Kyiv-Mohyla Business School.
Ukraine is a sizeable player on the global arms market, with a share of roughly 3% between 2010 and 2014. However, the country’s sales decreased significantly after 2014.
As reported last year by the Kyiv Post, industry analysts point out the lack of facilities to manufacture products that are in demand in the market. The reputation of some Ukrainian suppliers on the international arms market also leaves to be desired.
Techie Anton Galyashinsky, 34, seems small when he stands among the three 130-inch screens he’s been developing for 18 months. He hopes these screens, which he’s hooked up to powerful computers, will be popular among avid gamers.
Allocated to the premises of Kyiv Polytechnical University, the alma mater of thousands of tech people in Ukraine, Galyashinsky and his team at startup Wider haven’t invented anything new, but created a useful combination of already existing gadgets.
Galyashinsky’s device consists of 92Db Hi-Fi system made by Beyma, a self-assembled computer, a widescreen display with contour lighting, and lots of input-output ports. It’s compatible with video game consoles like PlayStation or Xbox, and can be connected to laptops or computers.
A no-break power supply keeps the whole thing running for up to 15 minutes if the power goes out.
The screen is a projection display with a 2.75:1 aspect ratio. The picture is projected by individually modulated laser rays from behind the screen.
The first three versions of the device had a projected picture that was rather dim, and blurry when standing close to the screen. Now the developers claim their fourth device with laser projector gives a 1.5 times brighter and clearer picture.
However, Galyashynsky admitted there’s still room for improvement.
The device can also be dismantled and transformed into a suitcase-sized package. The developers claim it takes 75 minutes to assemble the 67-kilogram edvice, and 50 minutes to take it apart.
Wider is aiming mostly at the entertainment market, seeking support from gamers. For this purpose, the company has acquired licenses for 100 most popular computer games.
The retail price for a gamer version of the device will be up to $12,000.
“The idea is to provide customers with a ready-made solution, so that a person does not have to go through the hassle of setting everything up,” Galyashinsky said. “We are aiming at entertainment market, because it’s global. There are games with million-dollar budgets. And gamers tend invest about $10,000 in their equipment.”
The starting technical characteristics for the gamer version are RAM of 32 gigabytes, with an 8 Gb video card, and a 4 GHz processor. The developers have individually calibrated the screen for all of the installed games.
“We looked at the games’ (video graphic) demands, and made the happy medium to support all the games on max graphic settings,” Galyashinsky said. “And it can be upgraded in the future at any time .”
However, Wider is also preparing a version of the kit for business purposes, the price of which will start from $7,000.
Shaky business plan
Despite having a promotion plan, and the first pre-orders, which Wider collected at tech conference CES 2017, the startup team hopes they can operate without investments.
Wider plans to collect 100 pre-orders and ship screen parts from China, but they expect factories there will agree to work with them upfront – producing the parts but taking payments after sale.
“We are looking for a partner-manufacturer, who has a factory and can take bigger part of production cost on itself,” Alexander Tulko, the sole Wider investor from Capital Venture Fund, told the Kyiv Post.
For Andrey Kolodyuk, a managing partner at AVentures, that sounds shaky.
“I know that factories do not do mass production this way,” Kolodyuk said. “Money first. That’s like taking credit in a bank and not drawing up documents, just promising that you’ll give this money back one day.”
Anyway, if this scheme does work out for Wider, it will manufacture the parts of the device in Ukraine but assemble them in any country in which they have customers.
“If we have pre-orders, the money will come,” Capital Venture Fund’s Tulko said. “Our best investor is the client.”
The number of complaints filed to the Business Ombudsman Council in Ukraine has increased. Among those complaining, most are dissatisfied with the work of State Fiscal Service, law enforcement authorities and local municipalities.
Most of the complaints come from small or medium-sized manufacturers, wholesalers, distributors, agribusiness, real estate and telecommunications market players, as well as individual entrepreneurs. They are based in Kyiv and Kyiv Oblast, Odesa, Dnipropetrovsk and Kharkiv regions.
In the last three months of 2016, the council received 242 complaints, the most since it started functioning 16 months ago. More than a half of them involve the State Fiscal Service, including Tax Inspection and Customs Service. Tax issues remain the most troubling with tax inspections being a pivotal roadblock.
“This tendency indicates the necessity to improve fiscal legislation and its execution,” said Business Ombudsman Algirdas Šemeta. “The majority of tax-related complaints that we receive are caused by the violation of law and failure to follow in-house instructions. It’s not that the existing laws are poor; they’re merely not executed.”
On Nov. 3, the Ukrainian parliament passed amendments to improve some laws on state regulation, including State Fiscal Service’s activities too.
Šemeta also expressed concern with growing pressure on business from law enforcement agencies such as Prosecutor’s Office, National Police, and State Security Service, as the number of complaints of them rose by a third.
There have been reports of criminal proceedings started before the results of fiscal inspection. Use of criminal law against businesses remains a serious challenge from the standpoint of business climate in Ukraine and the country’s reputation in the eyes of international investors.
“The problems won’t disappear fast. The system will need a lot of time to clean itself,” concluded Šemeta.
According to the State Fiscal Service of Ukraine, in 10 months of 2016 the five largest taxpayers were three public companies — UkrGazVydobuvannya, Naftogaz, and Ukrainian Railways — and two tobacco producers, Phillip Morris and British American Tobacco.
Improving tax and customs administration is one of the key points in the lending program of International Monetary Fund, Ukraine’s major creditor. In addition, fiscal decentralization has been a part of reform package supported by the European Union.
Source: Kyiv Post, By Bermet Talant, Published Nov. 5.