The aim of this study was to assess the feasibility of the proposed intervention in “Opportunity in Crisis – Empowering the Ukrainian Refugees to Rebuild the Ukrainian Economy”. The initial proposal aimed at training or employing at least 100 Ukrainian refugees in Austria and Germany, in sectors strategic to the economic integration of Ukraine in the EU. Here, we study the conditions under which such intervention can take place and can be effective. We study its scalability and its limits. We then recommend modifications and alternatives to the initial proposal.

This study was designed to go beyond data analysis and complement the part of our research focusing on understanding Ukraine’s Global Value Chains and it’s Foreign Direct Investments (Neffke, Hartog und Protzer, 2024), and labor market integration of the displaced Ukrainians in Austria (Ali and Nedelkoska, 2024) and Germany (Poltoratskaia, Schumacher, and Nedelkoska, 2024).

The methods used in this feasibility study are a survey of Austrian companies with branches in Ukraine, and interviews with German and Austrian multinational companies, companies providing start-up support to Ukrainian entrepreneurs, organizations helping the professional integration of Ukrainians in Austria and Germany, and governmental programs developed around Ukraine’s reconstruction efforts. We conducted a total of 24 interviews with CEOs of multinational companies active in Ukraine, co-founders and organizational leaders, and surveyed 12 Austrian companies with branches in Ukraine.

The findings of the study need to be put into the context of three important facts. First, while the number of Austrian and German companies operating in Ukraine seems large, the total impact on employment creation in Ukraine is small. Compared to Eastern European countries in closer proximity to Austria and Germany, Ukraine is poorly integrated in the EU’s value chains, and the inflow of FDI is limited (Neffke, Hartog und Protzer, 2024). Second, well over 70 percent of the 1.2 million displaced Ukrainians in Germany and the 84,000 displaced Ukrainians in Austria have tertiary education, and two-thirds of them are women. Third, while German and Austrian companies sorely need more workers, there exists a significant mismatch between the qualifications and interests of the displaced Ukrainians, and the needs of the companies, resulting in significant skill mismatch and underemployment of the Ukrainians.

Based on the survey and the interviews with companies, we find that: (a) the mobility of people is necessary for the flow of knowhow across borders, but this is often limited to the mobility of managers and the entrepreneurs; (b) some sectors, such as IT, research and science, and hospitality, enjoy significantly higher levels of worker cross-border mobility, and (c) companies whose connections to Ukraine extend beyond professional involvement have greater cross-border mobility of personnel. 3 As a result of multiple barriers to labor market integration, most highly educated displaced Ukrainians cannot find employment in their areas of expertise. Interviews with programs and organizations that support the professional development and integration of Ukrainians in Austria and Germany reveal that matching happens with great difficulty. However, once matched with temporary internships and job shadowing, the retention rates are high, suggesting that we should focus on designing a program that lowers the cost and risk for companies to accept interns and trainees.

In addition to focusing on placing Ukrainians in strategically important multinational companies, the study suggests that expanding the focus to Ukraine’s vibrant startup sector, in particular to IT startups, is promising.

We put forward two main recommendations for a second stage intervention. An internship program that would provide structured internships for displaced Ukrainians, and a diaspora support program, that would assist the Ukrainian government develop capacity to support the needs and leverage the potential of Ukraine’s sizable diaspora. We also discuss the need for further assessment of two potent areas of intervention – expanding credit to displaced entrepreneurs and mental health support of the displaced population.