Education as a Strategic Investment: New Approaches to Public Investment
Yevhen Kudriavets, First Deputy Minister of Education and Science of Ukraine
Over the past two years, government investment in education and science has increased by almost 40%, from 143 billion UAH to nearly 200 billion UAH. In today's conditions, focusing on these sectors is strategically important for Ukraine. Investments in education are not about covering the immediate expenses, but rather a long-term contribution to the future.
According to UNESCO, prioritizing education as a long-term investment is the foundation for achieving the Sustainable Development Goals. This is why highly developed countries, such as the USA and Japan, invest an average of 6–7% of their GDP in education. This approach directly impacts their economies, not only increasing labor productivity and citizens' income but also creating a long-term multiplier effect. An educated society fosters innovation, ensuring the economy's resilience. Therefore, investment in social capital is a catalyst for long-term economic progress.
This connection between education and economic development exists, and it works. For instance, according to the World Bank, each year of a child's education increases their hourly wage by 9% in the future. Even preschool education is crucial: kindergartens provide parents the opportunity to return to the labor market and resume regular contributions to the economy.
Ukraine's goal today is to implement effective strategic investments in education. This will enable our economy to shift towards innovation. In wartime conditions, this task has becomeparticularly significant, as quality should become our advantage over the aggressor’s quantity.
What is the logic behind government investment in Ukrainian education? With limited resources, we must balance addressing immediate needs with strategic decisions that guarantee long-term development. To ensure investments work for both of these vectors, simply increasing funding is not enough. That is why we are improving the distribution approach. In addition to traditional annual budget program formation, we are implementing long-term planning, which will ensure the systematic development of key educational reforms. When I talk about long-term planning, I don’t mean “internal documents” but concrete, developed projects—public investment projects (PIP).
What role do public investment projects play in strategic planning? In 2024, the procedure for forming capital expenditures from the state budget changed: now, each institution or organization can independently develop project concepts and submit them as public investment projects (PIPs) through the digital DREAM system. The projects are then assessed for strategic relevance, and selected initiatives receive government funding with transparent tracking of fund utilization.
Each approved PIP is a strategic goal for 3–5 years, which will be funded step by step annually. As a result, long-term priorities will be achieved. To draw an analogy, PIPs are a kind of "bank" opened for a specific need, which will be replenished annually from the state budget until the priority area is fully funded.
The Ministry of Education and Science of Ukraine (MoES) has submitted 19 PIPs for 2025, totaling approximately 36.5 billion UAH. Of these, 11.8 billion UAH were prioritized and received funding, accounting for about 30% of the submitted projects, one of the highest rates among all submitted PIPs. This high level of prioritization indicates the strategic importance of these initiatives for the state.
All approved PIPs submitted by MoES are already reflected in this year's state budget for education.
Let me explain how this works using the example of one of our priorities — ensuring the safety of the educational process. Its main component is radiation-proof shelters. We calculated that to meet 100% of the need for underground schools, almost 17 billion UAH is required. This year, the record investment of 6.2 billion UAH from the government will cover this need by almost one-third. The Ministry submitted this project for building underground schools to the DREAM system, where it was recognized as a priority.
Going forward, with defined priorities and accurate calculations of the required funding, it will become easier to fully address the educational needs, since subsidies will be allocated annually for this purpose. In fact, PIPs can synchronize or even evolve into national priorities for 3–5 years across all sectors, reflected in annual subsidies.
What are the plans for strategic investment in the future? All PIPs for 2025 are included into this year's subsidy. For the long term, the MoES is planning even more strategic investments to ensure the successful implementation of key reforms, namely in:
- Upper Secondary School: construction, repair, and reconstruction of new lyceum networks, setting up STEM classrooms, and comfortable dormitories;
- Modernization of vocational education: construction, repair, and reconstruction of vocational schools, creation of comfortable dormitories, and establishing centers of professional excellence;
- Comprehensive transformation of higher education: creation of centers of professional excellence and energy efficiency in educational institutions;
- Strategy to compensate for educational losses: equipping classrooms, creating digital hubs;
- Development of scientific infrastructure for recovery: equipping laboratories, research centers, and improving energy efficiency.
We expect that the subsidies for the upcoming years will also be directed towards these areas.
What positive changes do we expect? The DREAM system allows every hromada (municipality) and educational institution to review and analyze all PIPs. I believe that as its functionality expands, this platform will become a tool for synchronizing local work with national priorities. I am grateful to the Ministry of Finance for its initiatives on digitalization and the creation of new mechanisms for transparency and process efficiency.
Uniting projects into a single system under a common umbrella, so to speak, will ensure the rational use of investment in order to achieve our priorities. We already have a successful case—the distribution of funding for shelters. For the second year in a row, hromadas are submitting projects for construction through DREAM, ensuring transparency and accountability in fund utilization and distribution.
From my experience in educational diplomacy and cooperation with international donors, I can say that the role of the DREAM ecosystem is crucial for attracting donor funding. It is a transparent platform for partners, where they can choose projects they want to support financially. This is already working for shelters and has the potential to expand into other areas. Additionally, having pre-planned calculations positively influences donors' decisions regarding investments in the sector.
Our priority is to transform Ukrainian education into an investment project. To achieve this, we are committed to improving our approaches, finding innovative models of implementation, and ensuring that every investment truly drives the country's strategic development.