Kyiv as an economy in its own right

Kyiv is where a disproportionate amount of Ukrainian economic activity happens, and a company deciding where to locate needs to understand both why that is and what it costs.

What is concentrated there

Head offices, essentially all of them. Financial services, since the banks and the regulator are there. Professional services — law, audit, consulting — which follow the head offices. The IT sector, though less exclusively than before. Media and publishing. And the central government, which is itself a very large employer and purchaser.

What is not concentrated there is heavy industry, agriculture and logistics, which is why the capital's composition looks quite different from the country's.

The gravitational effect

Wages are higher, which draws people. The people drawn are disproportionately young and qualified, which makes the city more attractive to employers, which raises wages further. This is a self-reinforcing loop and every capital has it.

The cost is borne by the regions the people leave, and it is the main reason regional development policy exists anywhere.

What a company should weigh

Kyiv gives access to talent, decision-makers, professional services and international connections, and charges for all four in rent and salaries.

A regional city gives lower costs, lower staff turnover and a stronger position as a significant local employer — which matters more than foreign investors expect when dealing with a municipality.

What changed recently

Relocation westward moved a meaningful amount of activity to Lviv and other western cities, and some of it has stayed. The concentration is slightly less extreme than it was, which is probably healthy.

I can measure the capital's gravitational pull in my own company: keeping an office in Kyiv is expensive and moving it is more expensive, because everyone who decides is there. That is the balance a company has to weigh. What has changed in recent years is a second centre forming to the west; it is no longer a single pole.