The continuing conflict in Ukraine has affected stock markets worldwide and caused countless stories lamenting the way the international business community has been impacted by what could be characterized as regional political strife. Arguments can be made from both sides about whether this conflict should have gained so much attention on the world stage, but the economic community must work in the here and now rather than debate what should have happened. Smart business executives will surely begin to see that the crisis in Ukraine may just hold more opportunities than drawbacks if approached correctly.
It has been said that war always leads to profits for someone. Whether the conflict is a war, strictly speaking or something else simply begs the question of who will profit from this situation. While Russia holds many of the cards presently, one of the biggest being that of energy supply to Ukraine, sometimes the way the cards are played has more to do with success than the cards themselves. As public transportation has a tendency to thrive when gas becomes more expensive, and prepaid credit cards have surged to the front of the financial market during recent economic hardships, someone will soon learn how to capitalize on problems in Ukraine to generate growth.
One of the principle rules of any economic market is that both supply and demand must exist. If no demand exists for a given product, it is not sold and if something needed is never produced no one can profit from its sale. Aside from the military action taking place in Ukraine right now the major impact of the current situation is that both supply and demand have changed in that region. Ukrainian businesses have lost customers in the form of Russians who are now barred from trade with them and are now suffering from the decreasing demand. They are also suffering from a reduction in the supply of energy and other resources they previously obtained from Russia. Surely there are businesses around the world that hold products needed in Ukraine, or that are in demand of resources it has in abundance in such a way as to take advantage of these opportunities.
Ukrainians are ready for a new world perspective on their economy. The government has already recognized that it can redirect resources previously devoted to the production of military vehicles for Russia to other needs within its country. New relationships are developed and new industries rise to take the place of those the Ukrainian public has lost access to. There are countless new avenues for trade and interaction that courageous entrepreneurs will grab hold of and runaway within the next few years. Whether it comes in the form of new ways to deliver energy to the now gas starved nation, possibly by increased market for solar technology or in delivering distinctly Ukrainian goods to those displaced by the continuing conflict, someone is sure to profit.
While a mighty tourism industry is not likely to spring up in Donetsk or Luhansk while conflicts continue with Russia, there are ready-made economies filled with resources to give and needs to fill there. As businesses in Ukraine, work to shift their customer base to make up for the lack of Russian demand the rest of the world needs to recognize the new opportunities hidden there and find the business model that can take hold and take advantage of them.
By David Morris