Ilia Kenigshtein sees Ukraine as a place of opportunity.
Kenigshtein, who moved to Israel from Ukraine after the Soviet Union collapsed, returned to Kyiv in 2007 to accept a job in a media holding. “In Israel, there are smart people on every corner, while there are just a bit fewer of them in Ukraine,” he jokes.
A lot of those smart people are now gravitating to Ukraine’s burgeoning tech sector, where Kenigshtein sees great prospects. He has been active in promoting tech in Ukraine practically since day one of his return to the country.
One of his focuses has been negotiating with PayPal, the online payments system, to convince it to launch a full-scale service for Ukrainians.
He is the CEO of Creative Quarter, a hub for tech collaboration and development in the city of Lviv. He was active in finally bringing 3G mobile Internet to Ukraine, even joining protests outside the Cabinet of Ministers in Kyiv to get the government to hold an open 3G tender.
The tram depot in Lviv built by engineering giant Siemens, pictured in the 1920s. After renovation, Creative Quarter plans to base several projects in the building. (Courtesy).
Creative Quarter hub
Kenigshtein founded Creative Quarter in 2015 as a hub for tech innovations based on social entrepreneurship. After he could not find a suitable venue in Kyiv, he returned to his hometown of Lviv, with 723,000 people 540 kilometer west of the capital. “Today, Lviv is the most suitable city for such reforms, but there should be similar projects in every city,” Kenigshtein said.
At the moment, the hub occupies an office in central Lviv, but Kenigshtein has plans to expand.
In the future, the hub will combine around 20 different projects, including office space for startups, co-working offices, a restaurant, an urban development center, premises for holding workshops and representative offices of international technology companies, an eco-park and space for kid’s development.
But for that, the hub needs more space. So as a new home for Creative Quarter, Kenigshtein has found an old tram depot, 15 minutes’ walk away from Lviv’s city center.
The depot was built in 1894 by German engineering company Siemens, which launched the first electric tram service in Lviv. The city authorities plan to hold a tender to lease the depot in exchange for renovation of the building. The Creative Quarter team is planning to put in a bid.
To raise funds, Kenigshtein plans to bring Siemens back to the depot project as an investor with a dozen other global technology companies who have already declared interest. “I’m trying to wake them up,” Kenigshtein said of engaging the world’s top technology brands in the development of Ukraine’s economy.
Kenigshtein went to Princeton University in United States to meet Karl Zaininger, ex-president and CEO of Siemens Corporate Research and Support, Inc. At a table where Albert Einstein used to sit, they discussed how to bring Siemens to Lviv.
“I’m trying to persuade their headquarters, which have a very bad attitude towards Ukraine, because the Ukrainian authorities steal and ask for kickbacks, that only companies like them can change the economy,” Kenigshtein said.
Besides technology companies, Kenigshtein plans to engage the Ukrainian diaspora, who currently finance Ukrainian Catholic University in Lviv. “The combination of high-tech European and U.S. companies and diaspora – that’s the essential cocktail that will begin to make changes in people’s minds,” he said.
Until Lviv City Council organizes the tender for the depot, Kenigshtein said he would continue to implement his Smart City strategy for Lviv. It includes, for instance, launching a 112 emergency telephone number and a citywide network of wi-fi hotspots, which people’s devices will automatically connect to as the user moves from one area to another, without them having to log in to each one separately.
Ilia Kenigshtein
3G internet
Beside his initiatives in Lviv, Kenigshtein promotes digital technology around the country and was active in promoting third generation mobile internet, which came to Ukraine only in 2015.
Kenigshtein helped by bringing together a group of activists within the Reanimation Package of Reforms group of non-governmental organizations to lobby.
Dmytro Shymkiv, the deputy head of Presidential Administration, took the draft legislation that Kenigshtein and his group had drawn up and made sure it reached President Petro Poroshenko. The announcement of a tender for licenses to operate 3G mobile Internet services in Ukraine soon followed.
“We thought that was it — we could open the champagne, it was a great victory,” Kenigshtein said.
But he said that former Prime Minister Arseniy Yatsenyuk then tried to stall the tender, saying two of the presumed applicants for the three licenses — Kyivstar and Mobile TeleSystems (MTS) – shouldn’t be allowed to “monopolize the Ukrainian telecommunications market” because the firms are backed by Russian capital.
“A 3G connection is digital democracy, like roads between cities,” Kenigshtein said. Without 3G, Ukrainians were being deprived of a basic civil liberty — free communication — in his view.
In turn, to prevent a monopoly for the life:) mobile operator (now Turkish operator lifecell), the only one without Russian investments, Kenigshtein and the Reanimation Package of Reforms held a rally. They bought a red Soviet callbox and installed it in front of the Cabinet of Ministers building, symbolizing the attitude of the state towards G.
Yatsenyuk backed down, declared a tender and agreed to issue three licenses.
“In the first place, I did it because my daughter was born at that moment, and I want to be able to tell her something when she asks ‘What were you doing all that time?’” Kenigshtein said of his activism.
The country’s mobile operators are ready to roll out the next generation of mobile Internet, 4G, but the state is again stalling the process, Kenigshtein said.
PayPal initiative
Kenigshtein’s next battle will be to persuade the PayPal payment system to introduce its full services in Ukraine. The U.S. company, which operates its money transfer service in 190 nations, allows its Ukrainian users to make payments with its system, but won’t let them receive payments from abroad.
Along with Vladyslav Rashkovan, one of the four deputy governors of the National Bank of Ukraine, Kenigshtein in March went to meet with officials at PayPal’s European department in Warsaw.
“While they invited us for talks in Warsaw, they offered nothing. It was very unprofessional from their side,” Kenigshtein said of the meeting. He said that while in general the company works professionally, they offered no explanation for their refusal to discuss the extension of their service in Ukraine.
Moreover, representatives of PayPal’s Russian office were present at the meeting in Warsaw, Kenigshtein said, a sign that everything related to Ukraine goes through the Russian office.
Kenigshtein said he wasn’t giving up his attempts to bring full-service PayPal to Ukraine, but from now on he’s going to concentrate on discussing it with the company’s U.S. office, he said.
