Ukraine – Science, technology, and innovation public expenditure analysis (English)

World Bank

This report evaluates the quality mix of public support programs for science, technology, and innovation (STI) in Ukraine and provides recommendations for the improvement of the public support programs' effectiveness. The evaluation aims to determine the coherence in the allocation of STI expenditures in addressing the main innovation challenges in the country, as well as the main gaps and redundancies. The objective of the review is to increase the efficiency and effectiveness of STI public expenditure and maximize impact. The methodology used builds upon the Public Expenditure Reviews (PER) for STI (Correa 2014) and compares the demand for innovation policies arising from an innovation ecosystem diagnostic with the actual expenditure on STI. Given the lack of budget programming, STI expenditure sourced from the BOOST database only approximates actual expenditure due to the lack of budget codes for all STI-related expenditure. The fact that most expenditure is disbursed as block funding reduced the granularity of the analysis. The analysis uncovered significant gaps related to STI policies and revealed general trends in STI expenditure. It finds that existing innovation policy mix and relevant public funding do not respond to the critical needs of the Ukrainian National Innovation System. Additionally, the analysis finds that current governance arrangements with large transfers of block funding to the national academies do not provide strong incentives to business innovation. Based on these findings, the report makes three policy recommendation: First, Ukrainian policy practitioners should strengthen governance, planning, and learning mechanisms for better innovation policy efficiency. Second, they should shift budget allocation to induce enterprise innovation. Finally, Ukraine should invest resources in instruments that build firm capability, induce industry-specific research collaboration for business innovation, and improve the enabling environment of innovative firms.

Cirera, Xavier; Frias, Jaime Andres Uribe; Zolotarev, Andrey P.; Aridi, Anwar. 2017. Ukraine - Science, technology, and innovation public expenditure analysis (English). Washington, D.C. : World Bank Group.