Research and development will play important role in reconstruction efforts in Ukraine

Human capital is key for successful recovery, so focus on people is essential. Even before the war, the Ukrainian labour market was characterised by an increasing amount of mismatch between the set of skills sought after by employers, and the skills that workers were able to supply. A key principle is Ukraine’s education policy mut be designed hand-in-hand with Ukraine’s future industrial policy.

Ukraine needs to make its labour market attractive to those who have been forced to leave the county by creating favourable conditions for their return. Labour market policies should focus on creating a level playing field in terms of regulations and taxation. 

The UK and international academic community are ready to support Ukraine with developing a Roadmap for Economy in the years to come that would set it on the right path to success and modernisation, and would include three major interconnected strategies: labour market strategy (including forecast and modelling), education and skills strategy (including skills for the future), and industrial policy strategy. 

Ukraine needs a significant investment in the education system ensuring quality rather than quantity with a focus on both higher education and vocational training to meet the demands of the labour market. Good skills development is a long-term process and will take time. The Ukrainian government will need to develop policies to address likely short- and longer-term skills deficits to aid economic growth and productivity. This will likely be costly, so going forward more thought is needed about the ways funding can be made more sustainable in the long term. The UK also has a long tradition in doing this, and can share its experience in this area. 

During its recovery stage, Ukraine has a unique opportunity to recognise the problem of severe depopulation and labour shortages and enact policies to counteract fertility decline. The country can develop a robust childcare system that supports and helps women participate in the labour market. This is one the most successful ways for countries to ensure lasting increase in birth rates. 

Ukraine needs to reform its regulatory system for social and retirement support for war veterans. It must consider not only the current cost of caring for veterans, but also future obligations, as veterans’ age. 

Disabilities, and “signature” disabilities in particular, degrade veterans’ perception of employment prospects. Ukraine requires policies to support war veterans in securing employment. 

Early reconstruction efforts must concentrate on rebuilding critical infrastructure and provide affordable, quality housing. Private funding is essential for this effort. To mobilise private funding, with the support of the international community, Ukraine could set up a development bank, which could help establish a functioning system for mortgages.

Finally, to guide successful recovery policy, the importance of data collection and data availability cannot be overstated. Ukraine needs to improve the measurement and data collection of high-quality, real-time information on the state of the country, including demographic changes, labour market, health, and wellbeing. The UK has outstanding expertise to support Ukraine with reforming of the data collection system.