IT market of Ukraine

Artificial intelligence (Ukrainian market)

Main article: Artificial intelligence (Ukrainian market)

IT services (Ukrainian market)

Main article: IT services (Ukrainian market)

IT entrepreneurs of Ukraine

Main article: IT entrepreneurs of Ukraine

2024

80% of Ukrainian companies still use 1C

As of the beginning of October 2024, about 80% of Ukrainian companies continue to use 1C and other Russian software. Software from Russia is widely used in Ukraine to manage finances, accounting, logistics and other important functions.

Dmitry Popinako, an expert on the implementation of international enterprise management systems, head of the Ukrainian IT company Innoware (worked in Russia until the beginning of 2022), spoke about the use of Russian software by Ukrainian business. As of October 2024, more than 40 IT products of Russian origin are used in Ukraine, including customer relationship management (CRM) systems, accounting systems, end-to-end analytics, antivirus products and much more. Integrated Russian enterprise management platforms are also in operation, including financial accounting, human resources management, supply chains, warehouse logistics, production, customer relations and other business processes.

80% of Ukrainian companies still use 1C

Private enterprises continue to use 1C and its analogues. More than 80% of businesses remain users of the Russian 1C program, the volume of services in Ukraine reaches more than 0.5 billion hryvnia, and continue to buy software for tax and accounting, says Popinako.

In 2017, the Ukrainian authorities imposed sanctions against the Russian company, the developer of the 1C program, and banned the use of its products in the public sector. And in October 2023, a bill on a complete ban on "1C" in the country was submitted to the Ukrainian parliament for consideration. It is said that most Ukrainian private companies prefer Russian accounting programs. In accordance with the decree of the President of Ukraine of September 2, 2024, a significant amount of Russian software, including 1C, BAS and UA-Budget products, fell under sanctions. ^[1]]

20% of IT specialists from Ukraine are abroad

On June 20, 2024, it became known that as of the end of 2023, approximately 20% of Ukrainian IT specialists were abroad. Moreover, as noted, the number of workers leaving the country in this area continues to grow.

By May 2022, the total number of Ukrainian IT specialists was estimated at 285 thousand people. Of these, about 228 thousand lived in Ukraine, and about 50-57 thousand were in other states. In 2023, the number of Ukrainian IT workers increased to 307 thousand, which corresponds to an increase of 7.9% compared to the previous year. Of these, 242 thousand people remained in the country, and another 65 thousand workers went abroad.

A fifth of IT specialists from Ukraine abroad

Data from a study by the Ukrainian Ministry of Digital Development indicate that up to 15 thousand specialists in the field of information technology left Ukraine during 2023. The document says that the active migration of workers abroad due to the formed geopolitical situation leads to a shortage of qualified personnel in the domestic market, restraining the development of the industry.

According to the Ministry of Digital Development of Ukraine, the number of specialists in the field of machine learning (ML) and artificial intelligence from 2013 to 2023 increased more than fivefold in the country - from 970 to 5,200 people. These are mainly young people under the age of 30: they account for 67% of the total volume of this segment. Among all AI/ML specialists, approximately 37% are ML engineers, 26% are data experts, 13% are natural language processing (NLP) engineers. Another 10% each comes from analysts and AI/ML consultants. As of 2023, there are 243 companies in Ukraine that are developing and researching in the field of AI. According to this indicator, the country is in second place in Central and Eastern Europe, behind Poland with 301 companies.^[2]

2023

In Ukraine, 6100 fewer IT specialists in six months

In the first half of 2023, the number of IT specialists in Ukraine decreased by at least 6,100 people. Such data are provided in the DOU study, published in August 2023.

According to this report, by July 2023, the total number of specialists in the 50 largest IT companies in Ukraine is 86,300 people against 92,400 six months earlier. The number of specialists in the 25 largest IT companies in Ukraine decreased by 5700 people, to 67,400.

One of the reasons for the decrease in the number of employees is the smaller number of projects. This reason is called in a large five companies - EPAM, SoftServe, GlobalLogic, EVOPLAY, Luxoft Ukraine. In August 2023, EPAM reported that from the second half of 2022, a slowdown in the global economy was added to the problems associated with the military conflict with Russia.

This has led to the fact that foreign customers are more restrained in placing IT projects in Ukraine. Consequently, the volume of hiring new specialists has decreased, the need for specialists is covered thanks to the reserve, the study says.

In addition, some of the ERAM specialists went abroad and were legalized there. From the report published in August 2023, it follows that the majority of participants in the Ukrainian IT market do not plan to hire more than 50-200 people in the next six months.

Positive growth dynamics in the first half of 2023 was maintained by 15 companies out of 50 (of which 8 were grocery). Only three companies grew by more than 100 people. The leader in growth is Netpeak Group (+ 216 specialists in the first half of the year). The remaining states were added on average to 100 specialists^[3]

Ministry of Digital Development of Ukraine: Business and the public sector will not be able to abandon 1C for several more years

In June 2023, the Ministry of Digital Transformation of Ukraine was forced to state the impossibility of refusing local business and the public sector from 1C products. Read more here.

The number of military-liable IT specialists in Ukraine is 150 thousand people. 4.5 thousand serve in the Armed Forces of Ukraine

In Ukraine, there are approximately 307 thousand. IT professionals, including women. At the same time, the number of military-liable IT specialists is about 150 thousand. Such data on May 9, 2023 was provided by the executive director of the IT Ukraine Association Konstantin Vasyuk.

It is noted that the information technology industry of Ukraine is at a stage of rapid growth: it is in this area that accounts for about half of the country's foreign exchange earnings. However, in the current geopolitical situation, IT companies faced two problems: booking specialists from mobilization and granting them the right to travel abroad to conclude contracts or ensure the implementation of existing projects.

As Vasyuk noted, against the background of the current situation, many IT companies can curtail their activities in Ukraine and move their offices to neighboring countries. Business migrations in particular will be facilitated by the transformation of the industry. As of the beginning of May 2023, about 2 thousand IT specialists were booked in the country. At the same time, 4-4.5 thousand IT specialists serve in the Armed Forces of Ukraine.

A small number of booked [IT specialists] creates uncertainty for the client. For example, Ukraine is now for customers in the red zone, Poland - in yellow. When there is a choice where to place the project, it will not be in favor of our state, "Vasyuk said.

As the executive director of the IT Ukraine Association noted, customers want to be sure that their projects will be completed on time and in compliance with the requirements. At the same time, the availability of employees with reservations from mobilization is of critical importance. According to Vasyuk, it is necessary to book not 100% of people in the IT sector, but only key specialists.^[4]

2022

Ukraine was connected to the Digital Europe program in the amount of 7.5 billion euros

On September 5, 2022, the European Union and Ukraine signed a package of agreements in a number of areas. One of them concerns the accession of Ukraine to the Digital Europe project, the total budget of which for the period from 2021-2027. is 7.5 billion euros. Read more here.

Two IT clusters appeared in Ukraine, where IT specialists from all over the country moved

By the beginning of April 2022, two new IT clusters appeared in Ukraine, to which specialists from all over the country are invited. After the start of the Russian special operation in Ukraine, a large number of IT specialists left for other countries, and improved working conditions began to be created for the rest.

As reported in the Telegram channel of the Ivano-Frankivsk regional state administration, about 1 thousand moved to this city. IT specialists, and about 6 thousand more people settled within the region. To attract developers and other professionals in the field of information technology, the Ivano-Frankivsk authorities offered them the following conditions:

• accommodation for on favorable terms;
• comfortable coworking spaces and offices;
• kindergartens and schools for IT specialists with children;
• loyalty programs (the cluster has an IT Benefits discount program, which provides discounts in leading institutions and businesses, which can be used by moved IT workers).

At the end of March 2022, it was announced the creation in Ukraine of the Transcarpathian National IT Cluster. Specialists working there are exempted from military service. According to the head of the Transcarpathian regional military administration Viktor Mikita, by the end of March 2022, about 35 thousand IT specialists had moved to this region.

I personally will block any mobilization of any of you, because you are very precious to us and you in the army will not bring such benefits as in the digital, information world. And another important question: the reservation does not allow you to go abroad, he said during a meeting with representatives of IT companies.

Within the framework of the Transcarpathian National IT Cluster, fast Internet access, services accompanied by economic, tax and economic activities of business, offices and coworking spaces are provided.^[5]

3/4 IT specialists left the country during Russia's special operation in Ukraine

Since the start of the Russian special operation, Ukraine has left 3/4 of all IT specialists - 200 thousand out of 270 thousand people, the Ukrainian Ministry of Digital Development Science said on March 29, 2022.

The Ministry of Digital Development of Ukraine revealed the number of IT companies in the country

In January 2022, the Ministry of Digital Transformation of Ukraine published statistics on the development of IT companies in the country. The agency counted 1701 developers of technological products and 533 IT service providers.

Most of the product companies are represented in the following areas:

• technologies for marketing and media - 288 companies;
• Business and HR Software - 273 companies
• financial technology and development in the field of insurance - 171 companies.

Most offices are represented in Kyiv - 1533, followed by Lviv (263 offices) and Kharkov (197 offices). Next come Odessa (93 offices), Dnipro (87 offices), Zaporozhye (17 offices) and Vinnitsa (14 offices).

In the Ukrainian IT market, the segment of small companies with from 21 to 50 employees is the most widely represented. The Ministry of Digital Development reported that by January 2022 there are 190 such business representatives in the country. But large IT companies in Ukraine are the least - there are 12 of them.

The Ministry of Digital Development told how the study was carried out. The Ukrainian Tech Ecosystem portal aggregates the results of the ministry's research and information from organizations that count the number of IT companies. Among them: We challenge, Center42, DOU.ua, BRISE, Ukrainian Foundation, startups LIFT99, Reactor.ua, SaaS Nation and Lviv IT Cluster.

To be included in the list, the company must meet the following requirements:

• be technological;
• at least one founder must be from Ukraine;
• legal entity registered in Ukraine;
• more than 30% of team members must be in Ukraine.

The Ministry of Digital Development notes that a large number of Ukrainian IT companies work for export. The demand for their services abroad is growing, since it is often more financially profitable to cooperate with the Ukrainian IT-Business than, for example, with American suppliers.

2021

The number of IT specialists in Ukraine increased by 17%, to 285 thousand people

In February 2022, the IT Ukraine Association released a study on the situation in the Ukrainian IT industry. According to experts, the number of IT specialists in the country in 2021 increased by 17% compared to 2020 and reached 285 thousand people.

Experts attributed the tangible increase in the number of IT workers in Ukraine to the high demand for IT services in the country and relatively high wages in this market. Approximately 80% of those employed in the Ukrainian IT industry are young people aged 18 to 32 years. 25% of IT professionals are women, and their share in the leadership team is even higher (32%).

According to IT Ukraine, by the end of 2021, a little more than 55 thousand. IT specialists in Ukraine are hired employees. The rest cooperate with companies on the FOP model (an individual is an entrepreneur, an analogue of an individual entrepreneur in Russia).

According to the report, Ukraine remains an attractive hub, but the number of IT specialists per capita remains quite low - 2.4 times less than in neighboring countries. At the same time, the number of ICT students exceeds 100 thousand. It is expected that in 2022 - 2025. about 80 thousand people will receive a bachelor's degree in IT specialties.

In 2021, 87% of companies revised the salaries of their IT employees. On average, the salaries of IT specialists increased by 8.5%. The median salary in the industry depends on the specialty and is in the range of $2000-3000. The project managers earn the most - their salaries can reach $5,000, and among cities they pay the most in Kyiv.

Portrait of a typical Ukrainian IT specialist: he has higher education, moreover, specialized, not lower than the average level of knowledge of English (Intermediate and above), work experience - two or more years.^[6]

In Ukraine, 50% of IT training will be paid by the state

In December 2021, the Minister of Digital Transformation of Ukraine Mikhail Fedorov announced the launch of a state program for co-financing training in IT specialties in the country. The new initiative is designed to attract thousands of new developers. Read more here.

President of Ukraine: IT accounts for 4% of the country's GDP, and soon it will be 10%

President of Ukraine Volodymyr Zelenskyy, during a meeting with Facebook Vice President Nick Clegg and Company COO Sheryl Sandberg at the end of September 2021, said that the share of the IT industry in the country's GDP is 4%. At the same time, it is planned to increase this figure by 2.5 times.

We want to grow to 10% and see this as a reality in the next two to three years, "Zelensky said and noted that digitalization has become a priority for Ukraine.

According to the Ukrainian leader, work is being carried out in the state aimed at transferring all public services to electronic form.

Zelensky stressed that Ukraine became the first country in the world to equate digital passports with ordinary ones. In addition, thanks to the portal of public services "Diya," citizens can use the services of electronic signature and business opening. The president also spoke about plans to expand the range of services of the digital government.

We have several ambitious goals: this is electronic customs, these are parliamentary and presidential elections, this is a digital census of Ukrainian citizens, the head of state said.

The Minister of Digital Transformation Mikhail Fedorov also spoke about Ukraine's plans to increase the share of the IT industry in total GDP to 10% earlier. At the same time, he called the deadlines during which it is planned to fulfill this task. The Deputy Prime Minister emphasized that Ukraine needs to accelerate in creating favorable IT conditions so as not to lose its competitive position in the region.

Every month, special tax legal regimes appear in different countries - Moldova, Poland, Kyrgyzstan. New opportunities are constantly emerging in the world. To compete, Ukraine needs to create an ideal tax system to support the IT industry, says Mikhail Fedorov.[7]?

2020

The Ukrainian office of Epam became the first IT company in the country with a staff of 10 thousand people

By January 2021, the number of employees of the Ukrainian subsidiary Epam amounted to 10,300 people, which is the highest rate among IT companies in the country. This is evidenced by the rating of the DOU edition. Read more here.

Launch of the IT Relate Belarus project to attract Belarusian IT specialists

In October 2020, it became known about the IT Relate Belarus project launched by the Ukrainian authorities, which is aimed at attracting Belarusian IT specialists to Ukraine. Read more here.

Announcement of "Dіya City" - a technological hub with a special legal regime

At the end of September 2020, the Ministry of Digital Transformation of Ukraine presented the concept of reforming legislation for the IT industry. The initiative was called "Dіya.City." Read more here.

President of Ukraine Zelensky signed a decree on attracting Belarusian IT specialists

President of Ukraine Volodymyr Zelenskyy signed a decree on attracting Belarusian IT specialists. This was reported on October 4, 2020 on the website of the head of state. The decree came into force.

The document will contribute to the development of the investment potential of Ukraine and the attraction of highly qualified IT specialists and innovators, the report says.

According to the decree, IT specialists together with families will be able to take advantage of the new conditions of stay in Ukraine, provided that their immigration is "in the interests" of the country.

It is also planned to develop the project:

• introduce a pilot with a simplified registration of a residence permit;
• provide for the possibility of reducing to three days the time for obtaining a residence permit without the need for * additional travel outside the Ukrainian territory;
• Reduce work permits by up to five days
• improve the procedure for registering Belarusian IT specialists as individual entrepreneurs - payers of a single tax. He is also Ukraine going to recognize the documents that Belarusian programmers can present for work.

In addition, the government should ensure the uninterrupted functioning of a single information portal and hotline phones to provide advice to citizens of Belarus who immigrate to Ukraine.

At the same time, the regional state administration and the Kyiv city state administration should contribute to the provision of consultations to citizens of Belarus who immigrate to Ukraine.

After the presidential elections in Belarus on August 9, 2020 and the harsh repressions of public protest that followed, many qualified specialists began to think about moving. Some IT companies, including PandaDoc, have begun moving offices to Ukraine.^[8]

Ministry of Economics of Ukraine simplified the requirements for immigration of foreign IT specialists

In September 2020, the Ministry of Economic Development, Trade agriculture Ukraine and simplified the requirements for immigration of foreign IT specialists. The changes introduced by the department regulate the following:

• establishing a combination of mandatory and additional requirements, instead of the mandatory requirement of higher education in the specialty;
• reducing the requirement for experience from seven to three years;
• establishing a list of documents that can confirm work experience;
• setting the size of quotas not for the profession, but for the category of professions.

According to the Office of Effective Regulation (BRDO) on its Facebook page, the changes have improved the conditions for the relocation of foreign specialists who want to move to Ukraine. Nevertheless, in order for the process of moving them to become easier, you need to follow several steps.

First of all, the State Migration Service should significantly reduce the time for checking the documents of foreigners and begin to publish online up-to-date information on the number of permits granted for a quota of highly qualified specialists and on the number of applications submitted. The total period for consideration of documents should not exceed 10 calendar weeks, although now it takes 9-12 months, the Office of Effective Regulation said.

In September 2020, the Ministry of Digital Transformation launched an information portal for Belarusian IT specialists who are moving to Ukraine.

Deputy Minister for IT Development Alexander Bornyakov said that by the beginning of September 2020, more than 4,000 Belarusians had crossed the Ukrainian border. Of these, more than 300 employees of the sphere. He added that the ministry helped them come to Ukraine, settle down, get documents and start working here.^[9]

EC will allocate €2.7 million for the development of the digital economy in Ukraine

The European Commission plans to hire contractors to help the Ukrainian authorities develop a digital economy in the country. This is stated in the description of the EC tender.^[10] got acquainted with the document^[11].

The European Commission, as noted in the document, intends to support the Ministry of Digital Transformation of Ukraine and the Ukrainian National Commission, which carries out state regulation in the field of communications and informatization, in fulfilling obligations in the field of digital economy under the Association Agreement with the EU. ��2.7 million will be allocated for this project. The EC expects to implement it in three years.

"In the course of this work, beneficiaries will be supported in the preparation, adoption, implementation and enforcement of legislative norms in accordance with Appendix XVII-3 to the Association Agreement and the Deep and Comprehensive Free Trade Area," the document emphasizes.

The project is aimed at "strengthening the potential of state structures" of Ukraine, added to the EC.

Simplified employment scheme for Belarusian IT specialists

In mid-September 2020, Deputy Prime Minister, Minister of the Ministry of Digital Transformation of Ukraine Mikhail Fedorov announced the country's readiness to accept Belarusian IT specialists who faced restrictions on work amid protests after the presidential election.

As Fedorov wrote on his page in, Facebook serious restrictions on access to, to the Internet mobile communications and systematic banking failures force Belarusian IT companies to look for opportunities to move to other countries.

Together with the Ukrainian IT business, the Ministry of Digital Transformation is ready to create all the necessary conditions for the comfortable movement of IT companies and specialists to Ukraine, the minister said.

According to him, the Ukrainian IT company can invite a specialist from Belarus to work and accept him according to a simplified scheme. He will only need to provide copies of the passport with a certified translation and a color photograph of 3.5 x 4.5. Then the company applies to the Employment Center, which adds copies of the foreigner's passport, photo and draft employment agreement with him. Within 5-7 days, the Employment Center issues such a permit. This mechanism can be used by any foreign specialist, regardless of the level of qualification, Fedorov emphasized.

He added that with the support of the government, it was possible to immigrate 5 thousand highly qualified IT specialists to Ukraine. They can get a permanent residence and work in Ukraine for 10 years. Specialists from Belarus can immigrate to Ukraine with their families.

Mikhail Fedorov stressed that IT is the most progressive business in Belarus, accounting for up to 10% of national GDP.^[12]

IT companies of Ukraine have simplified the employment of foreign specialists

In April 2020, the Ukrainian government published an order on the allocation of quotas for the simplified employment of foreign specialists in IT companies in the country. The new measures are designed to eliminate the shortage of technological personnel in Ukraine.

As reported  Ministry of Digital Transformation of Ukraine on their page on the social network, Facebook Ukrainian IT companies will be able to attract 5 thousand foreign specialists immediately after the lifting of restrictive measures related to the pandemic. COVID-19 Quotas are distributed among cities as follows:

• Kyiv - 2500;
• Kharkov - 700;
• Dnipro - 600;
• Odessa - 600;
• Lviv - 600.

According to the order, foreign specialists will be given the opportunity to obtain a residence permit in Ukraine - they will no longer need annual permits to use the labor of foreigners. 

In addition, foreign citizens working in Ukrainian companies will not be tied to the terms of stay in the country, and the conditions of employment for them will create the same as for our citizens. Also, visiting specialists will have the opportunity to create a wage fund.

Quotas for immigration in Ukraine are a simpler tool than a work visa. The visa needs to be renewed every year and the person remains tied to a specific location. Quotas give a specialist the opportunity to be tested once every 10 years and the freedom to choose where to work, and even create their own product here, the Ministry of Digital Science explained.

According to the ministry, every year about 15-17 thousand are graduated from Ukrainian universities. IT specialists of different directions. At the same time, for the same period of time, about 40 thousand vacancies in the IT sector are opened in the country. The problem of personnel shortages is aggravated by the fact that some specialists go abroad and prefer to work on freelance.^[13]

The European tech companies that attracted the most investment in 5 years

2019

Top 10 Ukrainian IT companies with the largest investments

In 2019, Ukrainian IT companies raised a total of $510 million from private and venture capital investors, which is 1.5 times more than a year earlier. However, more than half of the amount ($268 million) fell on the service for joint work on software projects Gitlab. Such data are provided by the Ukrainian Association of International Investors (UVCA). The study was conducted in conjunction with Deloitte.

The three Ukrainian startups with the largest investments at the end of 2019 included an online service for checking grammar Grammarly and a project People.ai. The volume of transactions from the Top 10 almost doubled to $456 million.

90% of the investments raised were capital  from the United States. Most often in 2019 invested in software developers. In second place are Internet services.

According to UVCA, 115 transactions for investing in Ukrainian technology companies were registered in 2019 against 111 a year earlier. The average amount of investments amounted to $5.7 million.

In 2019, the volume of transactions mergers and acquisitions involving Ukrainian IT startups increased 18 times. In 15 M&A agreements, the total amount of $460 million was reached, while in 2018 there were 7 transactions for $25.2 million.

The growth in the volume of investments of business angels 7 times in 2019 yielded as a result of $6.1 million compared to $0.9 million in 2018. Also, 2019 was marked by 29 exits for Ukrainian investors, while the average transaction check increased by 78% and amounted to $5.7 million.

In 2019, the Ukrainian Association of International Investors for the first time analyzed the situation of gender diversity of the founders of startups that attracted funding. 26% of companies have women among their founders. On average, this figure in the world is 19%, said Olga Afanasyeva, executive director of UVCA.^[14] style

Record investment - $544 million

Ukrainian IT-the market in 2019 attracted record investments - $544 million, according to the AVentures Capital investment fund as part of its DealBook 2020 study. The data were released in March 2020.

In 2018, Ukrainian technology companies attracted a total of $323 million in investments against $265 million a year earlier.

About 77% of investments in 2019 came from three companies: Grammarly, GitLab and People.ai, which are increasing their business in Ukraine due to the presence of their research and development resources in the country.

Funds such as Iconiq Capital, General Catalyst and Goldman Sachs VC invested the most in the Ukrainian IT market in 2019.

The Ukrainian fund AVentures Capital itself, which presented a study of the venture capital market, invests in IT startups and provides them with advice. The foundation was founded by Evgeny Sysoev and Andrey Kolodyuk, known for creating the Divan.TV service. The fund is focused on the following categories of projects: software, e-commerce, cloud services, mobile technologies, the Internet of Things, IT outsourcing.

If you look at the largest investment deals of 2019, you can see that we are talking about investments of millions of dollars. Moreover, such transactions can be counted on the fingers of one hand. In most cases, there are "sowing" and "pre-sowing" investments, which are limited to amounts in the region of $10 thousand.

The lion's share of funds is provided by foreign investors. As for the Ukrainian funds, in 2019 they invested about $46 million in local IT startups, which is $3 million less than a year ago. According to experts, Ukrainian investors began to conduct fewer transactions, as they expect to withdraw from previous investment agreements in order to earn money for the next rounds of financing.^[15]

Exports of IT services from Ukraine grew by 15% to $2.43 billion

In February 2020, the State Statistics Service of Ukraine disclosed data on the export of IT services. In 2019, Ukrainian companies provided such services abroad for a total of $2.43 billion, which is 15% more than a year earlier.

Information technologies accounted for about 16% of exports of all services from Ukraine (the total figure was $15.23 billion).

In the IT segment, computer services occupied 79.2% of exports or $1.92 billion, information services - 16.3% or $395.5 million. The rest of the market was occupied by telecommunications services, sales of which abroad reached $110.6 million, LIGA.tech reports, citing data from Gosstat.

At the end of 2019, Ukraine imported IT services worth $495.8 million. In addition, the country exported goods totaling $50.06 billion, and imported $60.7 billion.

Ukraine exported the lion's share of all kinds of services (not only IT) to Russia - by $6.18 billion (40.6% of exports of all services per year), and imported the most from the UK (by $586.5 million). Data on the import and export of IT services related to Russia are not provided in the Ukrainian Gosstat.

By the end of 2019, the number of IT specialists in Ukraine amounted to about 200 thousand people. It is expected that in 2020 the figure will increase by 20 thousand employees. Most IT workers live in Kyiv (68,500), Lviv (21,000) and Kharkov (25,000). More than 60% of all the aforementioned specialists are employed in outsourcing IT companies. At the same time, the number of startups (2000 +) and international R&D offices (100 + companies) is growing.

By the end of 2019, about 1,600 service IT companies were operating in the country. They were actively building up their staff. Thus, employers from the top 50 are twice as active as before, opened new offices. The most popular locations were Kyiv, Lviv and Rivne.^[16]

The number of women in the Ukrainian IT industry has grown 4 times in 5 years

By the end of December 2019, the number of women in the Ukrainian IT industry increased 4 times compared to five years ago - from 9 to almost 40 thousand people, according to GlobalLogic (engaged in software development and IT outsourcing services).

In their study, experts used data from open sources and analytical reports from McKinsey, DOU, YouControl, Delo, as well as internal statistics from GlobalLogic for 2014-2019.

As of the end of 2019, about 24% of IT specialists in Ukraine are women. Their share grows by about 16% annually. Most of the weaker sex in the market are engaged in software testing and project management - here the share of women is 38%. Among software developers, women account for 11% of specialists.

Women increasingly occupy not only administrative, but also technical positions. In 2019, technical specialists made up 89.5% of all women collaborating with the company (5 years ago this figure was 62.6%). Of these, more than half are engaged in testing, 40% - development.

GlobalLogic also analyzed data on gender balance in Ukraine from 2014 to 2019. For a 5-year period of time by 2019, the number of women in the position of top managers in all industries amounted to 30%. 

We are glad that business is increasingly understanding how important it is to get rid of gender stereotypes, "said Yulia Dubovaya, vice president of engineering at GlobalLogic.

According to N- іX , by the end of 2019, about 184,700 IT specialists work on the Ukrainian market. There are more than 1,600 IT services companies in the country, as well as more than 4,000 technology companies. The IT industry has become one of the main directions for exporting services in Ukraine - it brings the country about $5 billion a year^[17]

2018: Largest IT companies

2017

Estimates of the volume of IT exports from $1.7 billion to $3.6 billion

The data of various sources on the parameters of the Ukrainian IT market vary greatly. According to the State Statistics Service of Ukraine, the volume of IT exports in 2017 increased by 3.8% - to $1.7 billion. At the same time, profile associations give completely different figures. IT Ukraine calculated that companies exported services in 2017 by $3.6 billion. They predict that in 2018 this figure may grow to $4.5 billion, and by 2020 - to reach $6 billion. At the same time, in 2018 alone, the number of Ukrainian programmers will increase from 116,000 to 145,000.

"The Global Sourcing Association called Ukraine the best country for providing ІT services, and 13 Ukrainian companies were included in the rating of the best suppliers of The Global Outsourcing 100. Experts predict in 2018 a further growth of the sector by 20-25% and a doubling of volumes in the next four years, with an increase in the number of people employed in the industry to 240 thousand people, "says Andrei Kulik, head of projects at the Corporate Business Sales Support Department of Credit Dnepr Bank

.

"Only as taxes for 12 months of 2017, IT companies brought about UAH 7.8 billion to the budget," said Nina Taranenko, director of the Bank's small and medium-sized business department.

According to ^[18] Ministry of Finance IT: ^[18],^[18] in the spring of 2018, almost half of Ukrainian IT specialists are concentrated in PrivatBank. According to the press service of the state bank, in 2017 they served 53,000 IT specialists. Through their accounts, $400 million "went" to Ukraine.

This popularity is not surprising - Privat provides programmers with many "goodies." Among them - automatic crediting of currency from large international companies, for example, Upwork, Payoneer, Google, Facebook, Apple, Toptal, Freelancer.com. Privat's press service claims that more than 1,000 non-resident firms are on this list. Another undoubted plus of the state bank is the ability to transfer reporting to the tax office through online banking and a separate contact center for freelancers and programmers.

Ban on Russian IT-Business in Ukraine

Main article: Ban on Russian IT-Business in Ukraine

On May 16, 2017, President of Ukraine Petro Poroshenko, by his decree, enacted the decision of the National Security and Defense Council (NSDC) on sanctions against Russian companies and their subsidiaries in Ukraine. In total, 468 legal entities were on the sanctions list, of which 81 were related to the field of information technology. TAdviser talked with a number of companies on the sanctions list and assessed the scale of the impact of sanctions on their business.

2016

Emigration of 9 thousand IT specialists from the country

The growth of the Ukrainian IT market did not lead to an increase in the number of industry specialists, on the contrary, there is a serious shortage of young IT specialists in Ukraine.

According to the results of an international study, the largest number of IT specialists among European countries works in Ukraine (according to 2015 data, more than 90 thousand developers, that is, 20% more than in 2014).

As Oksana Belaya, managing partner of SmartMe University, said in July 2016, in the previous two years alone, up to 9 thousand IT specialists emigrated from Ukraine to Europe and the United States:

... "over the past two years, up to 9 thousand IT professionals who emigrated to the United States and Europe have left Ukraine. But the vacated places are quickly compensated by the influx of young specialists and sweaters, "Belaya^[19] said^[19].

Ukraine's share in the global information technology market is estimated at 1%. In 2016, the IT market is projected to grow by 5-10%.

"There are

still not enough qualified specialists. In India, for example, the IT industry employs more than a million programmers, "Belaya added

.

Rada reduces IT export barriers

The Verkhovna Rada adopted a bill that eliminates administrative barriers to the export of services. 246 deputies voted for the adoption of the law.

As reported, presenting the bill, one of its authors Victoria Ptashnik, the document is aimed at improving the business environment for small and medium-sized businesses in the country.

"This

bill is about small and medium-sized businesses. Thousands of freelancers await him. He is also interested in those who provide IT services, legal services, accountants, designers, realtors and others, "she said

.

The main ideas of the project:

• Currency control procedures are simplified.
• The act of acceptance and transfer of services will not be mandatory.
• An invoice is recognized as an original document.
• Foreign economic contracts can be concluded electronically.
• There will be no need to translate documents from English for the bank.
• You can use an electronic signature instead of printing and signing paper documents.

Viktor Galasyuk, chairman of the BP committee on industrial policy and entrepreneurship, said before the vote that the bill eliminates artificial administrative barriers to the export of services from Ukraine, including the export of IT services.

"Today, the information technology industry brings Ukraine $2 billion in export revenue. If we adopt this law, then, firstly, this will additionally detract from the industry and those who today work in the shadows and do not legally generate revenue will have normal conditions to start it. Secondly, it will stimulate the development of the industry, "he said

.

According to the National Bank of Ukraine, the bill will simplify entrepreneurial activity for small and medium-sized businesses, bring a significant amount of services exports to the legal plane, and also increase the inflow of foreign exchange earnings.

The NBU also noted that the law is part of currency liberalization.

2015

IDC estimate of $1.4 billion (-42%) to 2005 level

The volume of the IT market in two years decreased to 1.4 billion, dollars reaching the indicators of a decade ago.

The volume of the Ukrainian IT market in 2015 amounted to $1.4 billion (including phones and smartphones), having decreased by 42% compared to 2014, said the regional manager of IDC Ukraine Vladimir Pozdnyakov.

According to him, the market reached its greatest development in 2008, then its volume was $5.1 billion. The current market volumes, according to Pozdnyakov, correspond to the volumes of 2005. According to IDC forecasts in 2016, the IT market in Ukraine may grow by 5-10%.

According to IDC, the equipment segment decreased by 43% and amounted to $643 million, the software segment - by 50%, to $106 million, IT services - by 38%, to $112 million. The only segment that showed growth is the public cloud market. In 2015, it increased by 10% and amounted to $9 million.

According to IDC Ukraine, the total volume of the "cloud" market of Ukraine (IaaS and SaaS) exceeded $9 million in 2015. With a 25% share, De Novo leads the country's IaaS market.

According to the results of the study, IaaS services with a share of 69% are a key segment of the cloud market in Ukraine, which showed higher dynamics (+ 13%) compared to SaaS (3%). The cloud market is growing in spite of the fall of the ICT market (-42%) and thanks to the increasing knowledge of the clouds. In 2016, consumer awareness reached 100% - among the surveyed Chief information officers there was not a single respondent who did not know about cloud computing. The ownership of cloud solutions at the level of "good" and "excellent" was noted by 82%, continuing the positive dynamics of this indicator in 2015-2013. - 79%, 61% and 45%, respectively.

The development of the cloud market in Ukraine, taking place in the context of the aggressive influence of political and economic factors, affected the changed behavior of cloud consumers. Thus, the importance of ensuring business continuity has significantly increased - 69% of respondents consider this task a priority this year. Due to a series of scandals related to the incorrect behavior of the executive authorities in relation to IT companies, 71% of respondents talk about the preference for foreign cloud offers. For the first time in the history of De Novo research, the most popular was the collegial model of solving the use of cloud services, which provides for the participation of finance and IT directors (47%), and the placement of the main business applications (42%) appeared in the top 3 popular tasks. The criteria for assessing the effectiveness of a cloud provider were also transformed. Almost half of the respondents (48%) say that it is important to comply with the service level agreement, and the quality of technical support services has become more significant (30% in 2016 and 7% in 2015). Also, confidence in the strategic importance of clouds for business has increased significantly - 84% (compared with 70% in 2015 and 61% in 2014).

"As a cloud operator in the country, we are concerned about the growing attractiveness of foreign data center sites and clouds among our customers. Despite numerous calls to legislatively resolve the current situation with the behavior of the security forces, our state does not seem to respond in any way to this disgrace. Until now, the cloud market has grown, thanks to the crisis. But this driver of development, obviously, has already exhausted itself, - comments the general director of De NovoAgeev Maxim Yuryevich. - New development factors are needed. We need a clear guarantee from the state about the inviolability of the data center and these customers. Otherwise, all our efforts to develop this promising segment are preparation for its transfer to foreign providers. We believe that cloud technologies provide a unique chance to narrow the gap between Ukraine and more developed markets. "

"The

cloud services market is almost the only segment of the IT market in Ukraine that showed growth in 2015. The crisis in the economy pushes Ukrainian companies to a shift in the paradigm of using IT, and the expansion of the user base of the cloud model of IT will cause no less radical changes in the landscape of the Ukrainian market for corporate IT equipment, software and services. Ukraine only at the beginning of this path, and it is expected for several years of growth of the cloud market, expressed in double digits. At the same time, the volume of SaaS services will grow at a faster pace, and by the beginning of the 20s, the volume of sales of SaaS services in Ukraine may amount to at least 10% of the software market capacity, "predicts the regional manager of IDC in Ukraine Pozdnyakov Vladimir

.

Reduce IT export growth to 7%

The IT export industry of Ukraine grew by 27% (2011-2012) and 30% (2013), but already in 2015 the figure was only 7%.

Unlike Ukraine, IT exporters are actively growing in Belarus (12%), Romania (19%) and Poland (22%).

19% of highly qualified specialists provide 41% in the structure of value creation. There is a high risk of losing this segment of specialists, which is very attractive for foreign companies in terms of relocation to other countries.

The export-oriented IT industry of Ukraine can double in all indicators and generate up to 27.2 billion hryvnia in revenues to the state budget in 2020, according to PwC experts, who conducted an independent macroeconomic study commissioned by the IT Committee of the European Business Association.

Over the previous four years, IT's contribution to Ukraine's GDP increased from 0.6 to 3.3% (from $1.1 billion to $2.7 billion).

This development was achieved due to an increase in the number of programmers - from 42,400 to 91,700.

In addition to the direct contribution of IT to the economy, PwC also investigated indirect contributions. For example, deposits of IT specialists in banks in 2015 amounted to UAH 5.8 billion, and the volume of mandatory sales of foreign exchange earnings - UAH 2 billion. Bank revenues from currency transactions reached UAH 1.7 billion.

Interaction with the state will increase the contribution of the IT industry to GDP from the current 3.3 to 4.5%, which will be equal to $5.1 billion in export revenue by 2020, and the number of jobs in IT and related industries will grow from 420,000 to 670,000.

2014

IDC Forecast: IT Market Cuts from $2.9 to $1.6 Billion

IDC predicts an almost twofold reduction compared to 2013: if the volume of the IT market in Ukraine in 2013 amounted to $2.9211 billion, then in 2014 this figure is expected to be only $1.61 billion. The fall will be 45%^[20].

Sales of mobile phones and smartphones are expected to decline by more than a third. The strongest fall was felt by smartphones of flagship premium models, in particular, Samsung Galaxy S, iPhone, expensive HTC and Nokia models. The market for conventional push-button phones has also noticeably sagged amid an increase in the number of transactions in the secondary market: it is more profitable for the poor to buy used phones. To a lesser extent, the fall affected economy smartphones.

Sales of computer equipment (PCs, laptops, tablets and servers) decreased by 47% this year. The IT services market decreased by 42% compared to the previous year, and software was sold by 37% less.

The only sector that grew in 2014 was cloud services (+ 40%). But in monetary terms, this market amounted to only $8.1 million - no more than 0.5% of the total IT market in Ukraine.

In the first three quarters of 2014, IT budgets at Ukrainian enterprises decreased by 40%, telecom operators - by 55%, and thirty largest banks - by 26%.

Interestingly, according to the head of IDC in Ukraine, Vladimir Pozdnyakov, the Ukrainian IT market remains hardware-oriented, which, from his point of view, is a sign of its immaturity. In advanced economies, the share of services and software in the overall market structure exceeds 70%, and in Ukraine - less than 20%, as in Pakistan and Nigeria. Note that in Russia the share of hardware in the overall structure of the IT market is about 56%, in Poland - 42%.

For 2015, IDC predicts two scenarios for the development of the IT market, which indirectly depends on hostilities in southeastern Ukraine. The first of them is an optimistic, suggesting 7% growth in the IT market, the second is neutral-pessimistic, which predicts market stagnation or its further decline. IDC expects a full recovery of the IT market no earlier than 2016 and connects it with the possible entry into the country of Western investments that will appear after the reforms.

Software exports $2.3 billion

In 2014, the volume of exports of software development from Ukraine amounted to $2.3 billion. In addition, in Ukraine there are branches of more than 100 R&D centers of world companies from various industries - telecommunications, software development and computer games, e-commerce, industry.

2013

Incredible NCRSI forecast for 2013: $3.6 billion

According to the forecast of the National Commission carrying out state regulation in the field of communications and informatization (NCRI) in March 2012, the volume of the IT market of Ukraine for 2013 will amount to $3.6 billion.

In total, the ICT market in 2012 in Ukraine by this organization is estimated at $7.63 billion (62 billion hryvnia), the market growth compared to 2011 amounted to 6.7%, and the main increase in revenues fell on telecommunications services, the market volume of which in Ukraine in 2012 reached 49.8 billion UAH ($6.1 billion). Thus, according to the calculations of the NCRI, the IT market in Ukraine in 2012 accounted for only about 12.2 billion UAH ($1.5 billion).

How can the IT market grow in Ukraine from $1.5 billion in 2012 to $3.6 billion in 2013? There is no answer to this question.

E-Consulting specialists calculated that in 2013 the volume of the IT market in Ukraine will be about $4 billion, of which 67% will be for hardware, 11% for software, and 22% for services.

Sitronics IT Ukraine predicts the volume of the Ukrainian IT market in 2013 at $3.5-3.9 billion (85-96% - iron, 6-8% of software and 7-10% - IT services).

Overview of the IT industry in Ukraine

Presentation by Evgeny Sysoev, Managing Partner of AVentures Capital.

According to Sysoev, a multi-billion IT industry has already been formed in Ukraine. Local IT companies employ about 100 thousand programmers, and these are world-class developers. Ukraine is now in first place in terms of the number of developers in Eastern and Central Europe and the number of IT specialists in the country is growing.

2012

PMR: Market size €1.42 billion

The volume of the IT market of Ukraine in 2012, including products and services, grew by 2.9% to 14.6 billion hryvnia (1.42 billion euros), according to the research company PMR.^[21]

During 2012, the market developed unevenly. In the first half of the year, the growth rate was not bad. However, in the second half, companies postponed investment in new IT projects for two reasons: macroeconomic instability and depreciation of the national currency. The dynamics of the IT market has become a reflection of the general economic situation in the state.

High growth rates in 2010-2011 helped the Ukrainian IT market to return to the pre-crisis level of 2008, when spending on information technology in the country reached its maximum. The recovery was helped by the growth of investments in the public sector and state-owned companies, as well as investments in infrastructure related to the European Football Championship.

However, in hard currency, the volume of the IT market in Ukraine is still approximately 25% less than 4 years ago. This is a consequence of the depreciation of the hryvnia. Analysts also call the annual reduction in the cost of personal computers as one of the reasons.

The main expense of Ukrainian consumers and companies is hardware, which is typical of emerging markets in general, which include Ukraine. The penetration rate of PCs in the country is about 20%. This level suggests that the demand for computers in the state will remain stable in the near future.

The volume of the IT market of Ukraine (billion hryvnia) and growth rates in 2017-2013.

In 2011-2012, there was a significant increase in demand for outsourced IT services in Ukraine. Such a model, according to analysts, helps to reduce and optimize costs, especially when using complex equipment.

Quarterly change in Ukraine's GDP in 2010-2012.

The pace of development of the IT market in Ukraine in the next 3-5 years will depend entirely on the macro-ecological and political situations in the country, experts comment. According to the PMR forecast, in 2013 the growth will also be 2.9% - up to 15 billion hryvnia.

Other estimates

According to GfK, the volume of the IT market in Ukraine in 2012 amounted to UAH 12.66 billion ($1.56 billion), an increase of 6.6%. At the same time, GfK estimated only sales of tablets, laptops, desktops, computer mice, keyboards.

Ciklum estimated the IT market of Ukraine in 2012 at $1.89 billion.

Victoria Tigipko, director of the TA Ventures venture fund, said that the volume of the IT market in Ukraine in 2012 was $2-2.5 billion.

Forecast for 2012-2013

The growth of the IT market in 2012 is expected to be 13.5% and will reach 16.5 billion hryvnia (1.48 billion euros). In 2013, according to analysts, the growth rate will slow down to about 10%. According to analysts, the main driver of growth in 2012-2013 will be the demand for computer hardware in^[22]

"In general, the prospects for the development of the IT market in Ukraine remain mixed, but positive," the authors of the report commented. - We expect the market to maintain double-digit growth rates in 2012-2013. This forecast is based on macroeconomic and political stability and does not take into account force majeure circumstances. "

The volume and growth rate of the IT market of Ukraine in 2006-2013 (billion hryvnia)

2011: PMR estimate €1.3bn

• The Ukrainian market for IT products and services in 2011 grew by 18.1% to 14.5 billion hryvnia (1.3 billion euros), PMR data.

For comparison, in 2010 the market showed an increase of 43%.

"The

growth rate is less, but the growth itself is more harmonious," experts noted. - It corresponds to the real economic and business situation in the country. In addition, we did not take into account the export of outsourced services, the volume of which last year exceeded half of the local IT market. "

According to the PMR forecast, it will take 3-4 years until the IT market of Ukraine reaches a peak value of 1.9 billion euros, which was recorded following the results of the pre-crisis 2008.

Analysts called the resumption of investments in IT by the public sector and companies with state capital a positive trend in 2011. This was facilitated by the modernization of transport infrastructure and the creation of national databases. A significant part of the investment in IT came from Naftogaz and Ukrainian Post.

Also an important trend was the increase in the complexity of outsourcing projects. In 2011, companies began to transfer management of their IT infrastructures to external providers. One of the notable projects announced in early 2012 was the agreement between the Ukrainian division of UniCredit Bank and IBM. For $200 million, the American corporation will serve data centers, networks, ATMs, software and bank users for 10 years.

• According to September 2011, its main share - about 80% - falls on equipment. IT services account for only 12.7% of the market. The Ukrainian market is close to saturation with equipment. According to analysts, the next stage will be the active implementation of corporate software, which will entail the need for IT services. According to the PMR analytical center, due to low saturation, the Ukrainian IT services market will grow 2 times in the coming years, and by 2016 its volume will exceed $387 million.

2010: PMR estimate €1bn

According to PMR, the Ukrainian IT market, which grew by almost 30% in 2010, again overcame the symbolic level of 1 billion euros, first achieved in 2005. However, this is still half as much as in the record 2007.

Later, in May 2012, PMR reported that the IT market in Ukraine in 2010 showed an increase of 43%. This was due to the fact that analysts "did not take into account the export of outsourced services."

In 2010, the government even sent a letter to the regions prohibiting the purchase of new computers. The gradual recovery of the market is facilitated by economic recovery, as well as relative political stability.

2009: Market Collapse

The crisis has brought down both the consumer and corporate market segments. The number of national programs providing for the implementation of IT projects was halved in 2009, and the costs of local budgets were limited exclusively to maintenance and technical support.

2008: Record sales of $5.1 billion

According to IDC, the largest development of the IT market in Ukraine (taking into account phones and smartphones) reached in 2008, then its volume was $5.1 billion.

Ukraine

• Economy of Ukraine
• IT market of Ukraine
• Information security in Ukraine
• Cybercrime and cyber conflicts: Ukraine
• IT Public Procurement (Ukraine)
• Fintech (Ukrainian market)
• Cellular communication (Ukrainian market)
• Cell phones (Ukrainian market)
• Internet (Ukrainian market)
• Electronic payment systems in Ukraine
• IPTV (Ukrainian market)

• PMR Press release - Ukrainian IT industry to keep on growing in 2012-2013.doc

Notes