DIGITAL TRANSFORMATION OF UKRAINE’S AGRICULTURAL SECTOR: IMPACT ON INVESTMENT ATTRACTIVENESS

Abstract

In this study, the strategic role of digitalization in ensuring economic resilience and enhancing the investment attractiveness of Ukraine’s agricultural sector under conditions of ongoing military aggression is examined in depth. The analysis substantiates that, due to the loss of approximately 18% of agricultural land and a critical workforce shortage of nearly 150,000 displaced or unavailable employees, the sector is undergoing a forced shift toward a model characterized by higher capital intensity, deeper automation, and greater technological sophistication. It is argued that the level of technological readiness – primarily reflected in the adoption of advanced AgriTech solutions – is becoming a decisive indicator of future operational efficiency, long-term stability, and overall investment potential. The study further explores the direct impact of digital transformation on return on investment (ROI), emphasizing how data-driven technologies reduce operational expenditures (OPEX) while simultaneously supporting revenue growth through both productivity gains and value-added diversification. Particular attention is given to precision agriculture, digital farm-management systems, and the transition toward high-value FoodTech products, all of which significantly strengthen competitiveness in global markets. Special emphasis is placed on the role of the government in regulatory derisking, including the implementation of the WINWIN Strategy, the introduction of unified data standards, and the expansion of digital transparency instruments. These measures serve as essential prerequisites for attracting financing from international financial institutions (IFIs) and for aligning the sector with modern ESG-oriented investment frameworks. Finally, the study identifies the systemic barriers that currently constrain technological modernization – most notably financial limitations, shortages of skilled personnel, and insufficient digital infrastructure. These challenges are characteristic of the prevailing “light digitalization” scenario, in which isolated technologies are adopted without a cohesive ecosystem approach. The research proposes a set of targeted recommendations aimed at overcoming these obstacles and enabling a transition toward a fully integrated, high-efficiency AgriTech environment.