Ukrainian IT Business: The Giant Spreading Its Wings
November 3rd, 2016
IT business in Ukraine is one of the most promising areas, and it is developing rapidly. This growth is due to various factors, such as geographical location (time zones matter), human potential, and general desire to enhance this area.
IT in Ukraine: An Important Part of the Economy
Economically speaking, IT sector in Ukraine is one of the fastest growing areas of business.
In 2012, the IT sector was responsible for nearly 0.8% of total GDP. Three years later, despite the turbulent political situation in the Eastern Ukraine, the indicator reached the level of 3% of total GDP.
It is expected that this figure will be close to 6% mark by 2020, and it is easy to see why everyone, not just the Ukrainian IT companies, are interested in doing a good job in outsourcing IT services and developing various products.
Growth indicators in the IT business in Ukraine are way ahead of the other areas of business. In 2016, the IT sector grew by 25% in the country. If one takes a few years’ statistic, this area of activity has increased by more than ten times. This rise is higher than that in any other country in Europe and the world, and if this will continue as the analysts' forecast, Ukraine will become one of the world leaders in IT.
The primary activity of the Ukrainian IT companies is outsourcing of various types of development. This area grew in volume by 9% in 2015, and in 2016 this figure is expected to be over 12%.
According to estimates of the “IT Ukraine” association, the services Ukrainian developers provided to the foreign companies amounted to $2.3 billion in 2015. By 2020, experts forecast that the number will triple and reach $7 billion.
Ukraine as one of the most attractive countries for outsourcing
According to the results of 2015, Ukraine took 24th place in the Global Services Location Index for IT outsourcing.
Compared to the stats from a year ago, Ukraine has risen on the list by 17 points, which indicates that global IT community values Ukraine highly as an effective resource. This evaluation was a joint effort of over 100 major IT companies that have placed their R&D centers. Among the companies are such giants as Cisco, Oracle, Rakuten, Samsung, etc. Out of the Fortune 500 companies, 20 companies work with Ukrainian developers.
One of the key factors that influence interest in Ukrainian software outsourcing services is the financial attractiveness for the end customers. In other words, development services in Ukraine are beneficial for both parties.
You can find a team of highly qualified specialists, who can solve complex problems and who are more affordable than in other countries. At the same time, Ukrainian teams have many unique competencies, which give an opportunity to create a product “from scratch” - from the idea to project’s design and architecture to implementation, product launch, and further promotion.
Another study, conducted by IT Outsourcing News together with Ukraine Digital News showed that Ukraine is the #1 IT outsourcing and development powerhouse in Europe. The report says that the volume of Ukrainian software export has reached at least $2.5 billion in 2015, with approximately 80% of the services provided for clients from the United States.
The authors emphasize that the Ukrainian outsourcing companies offer customers not just a technological skill set, but expertise in such areas an engineering and other.
It is also noteworthy that majority of survey participants, interviewed by IT Outsourcing News, stressed that political difficulties either didn’t affect the business at all or had a slight impact.
A BIT OF GEOGRAPHY
One of the biggest IT centers of Ukraine is its capital city of Kyiv. Also, the country’s largest IT companies also operate in such cities as Dnipropetrovsk, Lviv, Odessa, and Kharkiv.
All these cities have international airports and the fact that USA residents and EU countries’ citizens don’t need a visa to travel to Ukraine simplifies business interactions with Ukrainian staff.
COMPETENT EXPERTS - THE ACE UP THE SLEEVE
One of the main reasons for the success of Ukraine on the global IT outsourcing market is the high level of education, and a lot of emphases is put on tech education. There are over 75,000 IT professionals in Ukraine as of today, and their number is growing rapidly. Besides university graduates (16,000 every year), there are also graduates of training and retraining courses. Because of this, recruiting professionals get to pick the best of the best.
The country has a robust ecosystem of technical universities, which train engineers for over 100 years. This scientific basis provided ample ground for the development of IT education in Ukraine. The proof of this are the prizes that teens and students from Ukraine take home from the world programming competitions.
Ukraine is among the top three countries by the number of certified developers, which means that the international IT community also confirmed the level of knowledge of Ukrainian experts.
By 2020, the number of professionals working in the IT sector in Ukraine is projected to reach 180 thousand people (or, as some sources say, 200,000). This will contribute to the annual growth of their number by 20,000 people. The high level of wages in comparison with the average one for the country made IT professions one of the most prestigious specialties.
In the context of sustained demand growth for engineers, programmers, tech support specialists, and, most importantly, experienced developers that are able to learn the new technology quickly and begin using it, Ukraine is precisely the resource base, supplying the global IT community with qualified specialists capable of solving highly complex and unusual challenges.
Mentality, the Internet, and additional success factors
Along with qualified experts, Ukrainian developers are valued by customers due to common mindset traits as well as cultural and philosophical contexts.
High Internet penetration, including broadband, means no problems with communication and organization of business processes with Ukrainian IT outsourcing companies.
Over the past year, Ukraine has significantly improved its status in a number of international rankings. In particular, the country moved up a few positions in the World Bank Ranking for the ease of doing business. At the same time, Ukraine has risen most strongly in the rankings based on two criteria - enforcements of contracts and protection of minority shareholders.
The international business community is paying more and more attention to Ukraine as a whole and specifically on the Ukrainian IT industry which is displayed in the active growth of international cooperation with Ukrainian companies.
Therefore, don’t wait too long before starting your work with Ukraine - the market growth will provide resources for your needs, but the best and most experienced teams may be engaged in other projects.
Like what you see and would like to hire Ukrainian developers for your project?
