THE TRANSFORMATION OF THE DIGITAL ECONOMY IN UKRAINE: CHALLENGES, OPPORTUNITIES, AND STRATEGIC DIRECTIONS FOR IMPROVEMENT

This paper explores the ongoing transformation of the digital economy in Ukraine, analyzing its current landscape, key strengths, challenges, and strategic pathways for development.The Ukrainian digital economy exhibits both global similarities and distinctive national features shaped by its socio-political context, human capital, and institutional environment.Ukraine has emerged as a major hub for IT outsourcing and cybersecurity expertise, supported by a robust STEM-oriented education system and a highly skilled workforce.However, persistent obstacles such as outdated digital infrastructure, regulatory uncertainty, corruption, and bureaucratic inefficiencies hinder broader technological adoption and innovation.The study emphasizes the importance of leveraging international best practices and fostering international cooperation to enhance Ukraine's digital capacity.Strategic areas for improvement include investment in digital infrastructure, promotion of innovation and entrepreneurship, support for small and medium-sized enterprises (SMEs), development of digital skills, regulatory reform, cybersecurity enhancement, digital inclusion, and alignment with global digital standards.The paper also highlights the crucial role of digital technologies in modern warfare, particularly in cyber defense, intelligence, and information operations.Furthermore, the research outlines actionable strategies for advancing Ukraine's digital transformation.These include creating favorable conditions for startups, expanding e-government services, encouraging digital financial inclusion, and developing digital innovation hubs.Through a comprehensive, multi-stakeholder № 12(22) 2025 1555 approach involving the government, private sector, academia, and international partners, Ukraine can unlock the full potential of its digital economy, fostering longterm economic resilience, inclusive growth, and global integration.