The role of public investment in innovative projects during martial law

Abstract

The purpose of the study was to analyse the impact of martial law on public investment in innovation projects and to identify ways to adapt them to the new economic environment. The study analysed changes in financial and economic policy during martial law, assessed the priorities of public investment in innovation, and investigated the impact of regulatory measures on the development of technology projects. The martial law in Ukraine has significantly changed the economic priorities of the state, affecting the mechanisms for financing innovation projects. The analysis showed that a significant portion of public resources was redirected to defence needs, with defence funding amounting to UAH 350 billion in 2022 and expected to reach UAH 550 billion in 2024. This has also contributed to the development of dual-use technologies. The introduction of tax incentives and grant programmes has supported businesses operating in strategically important sectors, including cybersecurity, healthcare, and energy. Public investment in innovation in 2022 was only UAH 5.8 billion, but in 2024, this figure increased to UAH 7 billion, which became a key tool to support the national economy in the face of limited access to private capital. The creation of strategic funds made it possible to allocate funds for the development of critical innovative solutions that ensure defence capability and economic stability. An analysis of legislative changes has shown that the government has simplified the procedures for financing innovative projects and encourages the export of technological products. Despite serious challenges, the country retains the potential for innovative development through the adaptation of financial instruments and the active use of publicprivate partnership mechanisms. The study identified effective approaches to financing innovative projects under martial law, which contributes to the development of a strategy for economic sustainability and technological development.