Ilia Kenigshtein calls himself an evangelist of Israeli technological innovations. The Kyiv Post met him at Chasopys, a pay-for-your-time café in downtown Kyiv whose atmosphere is designed to foster creativity. Kenigshtein seems to be a regular here because the waitress whisks you directly to his favorite place on the balcony after being told who is being sought.
Currently he is the business development director for Central & Eastern Europe at LR Group, a Herzliya-based project development company operating worldwide. Its main areas of activity include rural development, internet technologies, telecommunications and medicine. One of the company’s key projects in Ukraine is Lissod, a cancer treatment facility near Kyiv.
However, it is not LR Group that brought Kenigshtein to Ukraine. He came here in 2007 to head Obozrevatel, a local news website. “It was a negative experience,” says Kenigshtein. “I just couldn’t understand the mentality of local business, audience and my employees.”
Born in Lviv in western Ukraine whose Jewish community made up to 30 percent of the city’s population before World War II, Kenigshtein failed to enter the local polytechnic institute and, thus, did not see too many opportunities ahead. “I wasn’t accepted – just like many Jews in those times,” he says. Although anti-Semitism has subsided in Ukraine, Kenigshtein adds, the Jewish community’s active involvement in the EuroMaidan Revolution as well as its support of Ukraine’s territorial integrity against Russian aggression has contributed much to this.
In 1991, he immigrated to Israel where he served in the army and obtained a bachelor’s degree in business administration from Hebrew University.
He strongly believes that the Ukrainian diaspora should play a far more essential role in the country’s business development. Kenigshtein recalls Yozma, the Israeli government’s initiative on attracting venture capital for local technological companies, which could be successfully replicated in Ukraine. Back in 1993, Israel’s government provided its guarantees for $100 million of investments in the technology sector, with the Israeli diaspora playing an active role in this.
“The diaspora saw this as mitzvah,” explains Kenigshtein. “An act of good will according to the Jewish religious tradition.”
Private capital in Yozma had reached nearly 60 percent, with the rest coming from the government. Israel has since invested $500 million in the project, earning an investment return of $3 billion.
What the Ukrainian government can do, according to Kenigshtein, is to provide support to the country’s IT-sector by introducing lower taxes to stimulate the industry’s growth first and foremost. “However, the government should realize that there is outsourcing and there is creation of homegrown products, while both of them call themselves the IT-sector,” he adds. “Outsourcing can’t be a powerful market force in the long run.”
In Ukraine, a newly created startup usually spends only three or four months in an incubator before being pushed to enter the market and become fully commercial, while in Israel this period may span up to two years. “You just don’t have enough time to create something in Ukraine,” Kenigshtein observes.
Some 90 percent of the ideas pitched by Ukrainian startups are not worth much, he says. But there are some really unique and innovative projects that could attract investments.
There’s been much talk also about implementing an electronic government in Ukraine, though this is still seen as a three- to four-year project demanding vast amounts of investments of tens of millions of dollars.
Kenigshtein refutes this perception, however. It would take more than several weeks and several hundred thousands of dollars to implement the project to make documents available online as well as to communicate with the government on a number of issues electronically.
“Ukraine does not have to reinvent the bicycle and should just purchase a license from one of the successful e-government models,” he adds. But eradicating corruption should be done first since it is holding back Ukraine’s development the most.
“It is kind of funny to talk about e-government in a country where it is okay to turn off the hot water for two weeks for so-called prophylactic measures,” he says ironically.
Kenigshtein, who writes on urban planning for several publications, admits there is a substantial imbalance between the western and eastern bank of Kyiv, which is divided by the Dnipro River. “Kyiv faces the Dnipro with its back (to it), while if it turns around – the imbalance problem would be solved, just like in Budapest or Vienna,” he emphasizes. “While being somewhere in downtown, you do not feel that Kyiv is a river-based city.”
When asked about the difference in the philosophy of global leading high technology companies – Apple, Google, Microsoft – Kenigshtein, himself a devoted Apple-user, puts it simple: “While Google and Microsoft provide you with numerous options for making a choice, Apple makes that choice for you and just gives exactly what you need.”
Kyiv Post associate business editor Ivan Verstyuk can be reached at [email protected].
