Opportunity in Crisis. Empowering the Ukrainian Refugees to Rebuild the Ukrainian Economy

The Russian war on Ukraine disrupted Ukraine’s economy and its global value chains and unleashed a refugee crisis of historic proportions. In a feasibility stage, we studied the preparedness of German and Austrian companies to employ and train Ukrainian refugees. We were particularly interested in companies with current or planned investments in Ukraine, as these are most likely to have a positive long-run economic impact in Ukraine.

The study was anchored in the literature that shows how industrial knowhow and innovation travel with the movement of people. This literature shows that across various sectors of the economy (e.g., industrial production, semi-conductors, and IT) the expansion of industry in new places happens when people with specific industrial knowhow move to new locations.

To develop its economic capacity and to integrate itself in the European value chains, Ukraine needs more economic links with countries like Austria and Germany. These links need to be formed through the joint production experience of Ukrainian, German, and Austrian workers. The large presence of highly skilled Ukrainians in Austrian and Germany presents an opportunity for closer economic integration among the three economies.

In a series of studies, we reveal:
* Ukraine's participation in the Global Value Chains.
* The dynamics of Foreign Direct Investments in Ukraine.
* The degree of labor market integration of the Ukrainian refugees in Austria and Germany.
* The interest of Austrian and German companies to employ and train displaced Ukrainians.