A Country’s Recovery Begins Not with Big Money, but with Small Businesses in Local Communities

Fr. Mykhailo Melnyk, PhD | PCC ICF | Founder, Platform for Social Change

When we talk about Ukraine’s recovery, we tend to envision large-scale government programs, international aid, reconstruction funds, and major investments. All of these are essential. Yet there is a risk that within this broader picture we overlook a simple truth: genuine recovery often begins much closer to home — with one person’s decision to remain in their community, build a business, create jobs for others, and gradually restore economic meaning to the place they call home.

This is where social entrepreneurship begins.

In Ukraine, it is still frequently mistaken for charity. When a business pursues a social mission, it is perceived as something secondary — not quite a real business, but a well-meaning initiative that will always depend on external support. This is a misconception.

A social enterprise is a business. It serves customers, manages costs, competes in the market, generates revenue, and takes risks. It must be financially sustainable. The difference is that alongside profit, it deliberately addresses a specific problem facing people or communities. Social enterprise is multi-stakeholder enterprises — organizations with multiple goals, multiple groups of stakeholders, and multiple resource streams operating simultaneously. This is not business plus mission. It is a different organizational architecture.

European economic thought offers a precise framework for this. Stefano Zamagni, professor at the University of Bologna, calls it civil economy — a tradition rooted in the work of Antonio Genovesi, who established the world’s first chair of economics in Naples in 1754, twenty-two years before Adam Smith’s *Wealth of Nations*. The core thesis: the market is not the opposite of community. The market can *be* community — when it operates not only on exchange and competition, but also on reciprocity, trust, and the common good.

This is why social entrepreneurship deserves recognition not as a niche concern for idealists, but as an integral component of a country’s economic recovery model. Research by Leonardo Becchetti (Tor Vergata, Rome) demonstrates that the quality of human relationships is a more powerful predictor of life satisfaction than income. What he terms *relational goods* — value that arises only in the relationship between people and cannot be purchased — is precisely what social enterprises produce as a byproduct of their daily operations.

Small and medium-sized enterprises form the backbone of Ukraine’s economy. Micro, small, and medium-sized businesses account for 99.98% of all enterprises, provide 74% of employment, and generate 64% of value added. The economy is sustained not by large corporations alone, but by thousands of small businesses operating in cities, towns, and communities across the country.

It is these local economies that the war has hit hardest. Many communities have seen fewer jobs, fewer entrepreneurs, and fewer reasons for people to stay. Large investors naturally look first to major cities, established markets, and lower-risk environments. Yet Ukraine is far more than Kyiv, Lviv, or Dnipro. Recovery will only be complete when economic activity returns to small towns and rural communities as well. When a country grows wealthier but its people grow lonelier, that is not recovery. Recovery means creating places where people have someone to work alongside and someone to rely on.

At this point, the challenge is no longer about infrastructure alone. It is about people.

Social enterprises do not wait for someone else to solve local problems. They start with a specific community need and transform it into a viable solution. In one place that may be food processing; in another, farming, local manufacturing, an educational product, or services for vulnerable groups. In every case, what they deliver goes far beyond a product or service. It is employment, trust, local monetary circulation, and the capacity of a community to stand on its own.

Zamagni articulates this as the distinction between two types of connection. Exchange is transactional: I pay, you deliver. Reciprocity is relational: I contribute because I know that tomorrow, someone will do the same for me. The first rests on contract. The second rests on trust. A social enterprise in a local community operates not as top-down charity but as mutual assistance from within.

According to sector research, Ukraine has approximately 1,000 enterprises that can be classified as social. The barriers they face remain significant: limited access to finance, insufficient start-up capital, public misconceptions, and a persistent failure to recognize social entrepreneurship as a legitimate part of a modern economy rather than “business with a social label.”

The greatest mistake is to dismiss these businesses as small or temporary. They often accomplish what no other actor does: creating employment where no one else will, working with local resources, retaining value within communities, and cultivating a culture of responsibility. 

This logic is visible in the story of RID OIL, a family brand based in Kamianets-Podilskyi. A small artisanal workshop producing natural cold-pressed oils, founded by Daria Sendziuk and her husband. The product quality was never the issue. As is often the case with small businesses, the real challenge lay elsewhere: finding the right customers, clearly communicating the product’s value, and helping people understand why it mattered.

After participating in the Impact Project Accelerator, the team did more than refine their communications — they fundamentally reconsidered their business model. They began articulating their mission more clearly, strengthened their social media presence, expanded their product range to include spices and blends, and — most critically — learned to sell not just a product, but its purpose. According to the founder, during the first three months after the program, the business achieved more than in the previous nine, with revenue growing approximately fourfold.

Today, RID OIL has around 150 loyal customers, a 30–40% repeat purchase rate, hundreds of positive reviews, and partnerships with local businesses. From the vantage point of a large market, these numbers may appear modest. But for a local economy, this is exactly how genuine growth begins: with a small family enterprise that learns to be not merely “local,” but competitive, clearly positioned, and financially sustainable.

The value of stories like this lies not in their appeal but in their mechanics. An idea meets knowledge, mentorship, ecosystem support, and partnerships — and becomes a business that no longer asks for help but generates economic activity around it.

This is how we see our role at the Platform for Social Change: not to deliver another training program, but to build a clear developmental pathway — from first attempt to sustainable business model. Social entrepreneurship does not emerge from nothing. It requires an ecosystem where ideas can be tested, mistakes made, support received, partnerships built, and growth achieved. We calls this an “incubation environment” — and his research shows that it is the presence of such an environment, rather than the volume of funding, that determines how many new social enterprises emerge in a given region.

Today, social entrepreneurship is no longer peripheral. It has been officially recognized in Ukraine’s National Strategy for the Development of Small and Medium-Sized Enterprises for 2024–2027 — a signal that the government is beginning to view the sector as part of the economic system, not as an exception to it.

Yet we still underestimate its true weight.

When the World Bank estimates Ukraine’s recovery and reconstruction needs at $524 billion over the coming decade, one conclusion is inescapable: no recovery can rely solely on large capital flows from above. It requires thousands of small decisions from below — businesses that create jobs, pay taxes, stimulate local economies, and restore people’s confidence that a future can be built where they live.

Recovery does not begin with abstract strategies. It begins with people who chose not to leave, who refused to postpone their lives, and who did not wait for ideal conditions. It begins with those who are already opening workshops, farms, cafés, craft production facilities, processing plants, and local service businesses in their own communities. Classical economics holds that people maximize utility. But people who start businesses in wartime conditions maximize meaning. That, too, is economics — simply a more mature form of it.

Zamagni distinguishes between total good and common good. Total good is aggregate welfare as the sum of individual interests: $524 billion that can be calculated, divided, and allocated. Common good is a shared welfare that exists only when participants recognize their interdependence. A living community where people stay and work for one another — that is common good. It cannot be purchased. It can only be built.

The question is not whether such initiatives matter. The question is whether we are finally ready to see them not as “small local projects,” but as one of the foundations of Ukraine’s future economy.