IT services (Ukrainian market)

IT market of Ukraine

Main article: IT market of Ukraine

2023: IT services exports from Ukraine fall (8.5% to $6.7 billion) for the first time in 30 years

At the end of 2023, revenue from the export of IT services from Ukraine amounted to approximately $6.7 billion. This is 8.5%, or $622 million, less than in 2022. Thus, the indicator fell for the first time in 30 years, as reported by the National Bank of Ukraine at the end of January 2024.

It is noted that computer services make up 41% of the total export of Ukraine. In 2022, the figure was recorded at 45.5%. Thus, in 2023, the technological industry continues to be one of the key in the Ukrainian economy. If we compare the second half of 2023 with the first, then the indicators have worsened. Over the past six months of 2023 (July-December), the volume of exports of IT services from Ukraine decreased by 0.8%, or $27 million, and amounted to approximately $3.35 billion.

source = Lviv IT cluster

A study by the Lviv IT cluster says that the bulk of foreign exchange earnings in the field of computer services to Ukraine are provided: in USA 2023, this is $2.677 billion, which is equivalent to 39.8% of total IT exports. In second place is with Malta 8.4% and $566.78 million. Closes the top three, Britain which provided $534.88 million, or approximately 8%.

The top five also included Cyprus Israel 5.4% ($362.2 million) and 4.4% ($293.2 million), respectively. Next come,,,, and Switzerland Germany. In Poland Estonia Netherlands general, these 10 countries in 2023 brought in $5.42 To Ukraine billion, or 80.6%, of revenue from the export of IT services.

The report also said that in 2023, exports of IT services from Ukraine increased to Slovakia (+ 39.2% on an annualized basis), Poland (+ 32.3%), Romania (+ 23.6%), the UAE (+ 19%) and Austria (+ 15.7%). At the same time, negative dynamics was recorded in Luxembourg (-52% year-on-year), Singapore (-31.7%), Hong Kong (-28.6 %) and Australia (-^[1] rіk

2022

IT services in Ukraine remained the only area with growing exports

IT services in Ukraine remained the only area with growing exports in 2022. Such data were released in March 2023.

According to TASS, citing the Ukrainian edition of Forbes, which, in turn, refers to the statistics of the National Bank of Ukraine, in 2022, Ukrainian exports of IT services reached a record $7.35 billion, which is 5.8% more than a year earlier. In previous years, growth rates were higher and measured in double digits. For example, in 2021, they dynamics were + 36%.

Ukrainian IT exports reach record $7.35 billion

In general, the export of goods from Ukraine at the end of 2022 decreased by 35% compared to 2021 - to $44.2 billion. The leaders in terms of export value in 2022 were companies of the agro-industrial complex, the mining and metallurgical industry and service providers in the information and technological sphere. Thus, of the total export volume of $60 billion, the share of agricultural companies amounted to a third - $20.9 billion. Mining and metallurgical complex companies delivered $9.1 billion worth of products abroad.

Market participants interviewed by Forbes restrainedly assess the situation in the Ukrainian IT market.

So far, restrained realism, not optimism, not pessimism, just business, - says Konstantin Vasyuk, executive director of the IT Ukraine Association, about forecasts for the future.

Export revenues in the IT sector directly correlate with the number of contracts from service IT companies. It is problematic for Ukrainian companies to conclude new contracts. Until the end of the military conflict with Russia, there will be no significant progress with new customers, Ciklum CFO Andrei Oksenyuk told Forbes, when the industry began to analyze the first results of massive power outages in Ukraine. Since then, the situation has not improved, Konstantin Vasyuk and the head of the Lviv IT cluster Stepan Veselovsky agree.^[2]

Ukrainian export of IT services for the quarter updated the record

Ukrainian export of IT services in the first three months of 2022 amounted to $2 billion. This result was a record, despite the martial law in the country, the mobilization and relocation of IT specialists and entire companies. Such data Association IT Ukraine (unites more than 100 companies and 77 thousand IT specialists in the country) announced in May 2022.

In January-March 2021, the market volume was measured at $1.44 billion. Thus, in the first quarter of 2022, there was an increase in the export of IT services by 28%.

Ukrainian export of IT services for the quarter updated the record

According to the study, in February 2022, the Ukrainian IT market in terms of exports of services reached a record monthly figure of $839 million, which is 43% more than in February 2021. In March 2022, Ukraine retained 96% of the volume of exports of computer services - $522 million against $546 million.

It also follows from the report that in the new military realities (special operation of the Russian Federation in Ukraine), the Ukrainian IT industry managed to consolidate and quickly reformat thanks to anti-crisis business plans, the release said. Most companies retained customers and volumes of their contracts.

As the executive director of the IT Ukraine Association Konstantin Vasyuk noted, by May 2022, 77% of Ukrainian IT companies attracted new customers, 56% of them expect growth by 5-30% in 2022.

The Lviv IT cluster in mid-May 2022 published data that only 27.7% of companies received notifications from customers about the suspension or transfer of projects in connection with the situation in Ukraine. The percentage of terminated contracts is estimated at 15.4%.

According to the forecasts of Statista analysts, the volume of the Ukrainian IT market (sales of technological equipment, software and IT services) in 2022 will decrease by 44%.^[3]

2021: Ukrainian exports of IT services grew by 36%, to $6.8 billion

Export of IT services in Ukraine in 2021 reached $6.8 billion, an increase of 36% compared to 2020. The registered absolute figure was a record for the country, according to data from the IT Ukraine association, published at the end of January 2022.

Experts associate the growth of IT exports with the result of the activities of outsourcing companies that hire Ukrainian programmers to work on foreign technological projects.

About 40% of Ukrainian IT exports in 2021 fell on the United States. The second largest market is Britain, with a share of about 10%. The top three include Switzerland.

IT services occupied about 37% of Ukraine's export structure in 2021, which is 4.8% more than a year earlier. In the GDP of Ukraine, the share of exports of computer services in 2021 amounted to 2.7%.

According to the report, the export of computer services from Ukraine is growing by an average of 27% annually. In four years, the volume of this segment has doubled. According to IT Ukraine forecasts, the IT industry will provide $37-44 billion in export revenue over the next four years (until 2025).

The fact that the export IT sector in Ukraine continues to develop is confirmed by the number of new individuals - entrepreneurs (FOP) specializing in computer and information services. For 2020-2021. there are 40% more of them. The number of IT companies also increased: by 22% - with computer services, by 10% - with information, the study said.

The study used open data and information from state registries, as well as a survey of 98 leading Ukrainian IT companies.

By the end of 2021, more than 285 thousand people were employed in the IT industry in Ukraine, who worked in several thousand companies. The vast majority of them worked just for export - they provide software development services to foreign companies.^[4]

2020: Growth of export of IT services in Ukraine over 6 years by 3 times, to $5 billion

The export of IT services in Ukraine at the end of 2020 amounted to more than $5 billion (an increase of 20.4%), which was a record figure and corresponded to 8.3% in the country's total exports. Compared to 2014, exports of IT services tripled. This was announced in June 2021 by GlobalLogic based on the results of an analysis of internal statistics and data from open sources.

According to the study, some IT specialists bring the Ukrainian economy more than $22 thousand in the form of exports in the field of information technology. Despite the fact that the number of such specialists in the country is growing by about 20% per year, the need for qualified personnel is also increasing - by more than 30%. According to statistics from the anonymous job search platform at IT Djinni, the number of vacancies opened there for the first time exceeds the number of job seekers.

Export of IT services in Ukraine over 6 years has grown 3 times, to $5 billion

The export of IT services in Ukraine in 2020 for the first time exceeded the export of transport services and mineral products, which traditionally occupied high positions. Although total exports fell by 4.6% last year, IT exports nevertheless grew by $853 million.

By the end of 2020, over 200 thousand people were employed in the IT industry in Ukraine, who worked in more than 4 thousand companies. The vast majority of them work just for export - they provide software development services to foreign companies.

The main reason Western customers choose cooperation with Ukraine is the cost of development. Performing such services in Ukraine can cost the customer half as much as, for example, in the United States. At the same time, the quality will be at a decent level, experts say.

According to them, cheaper labor allows to achieve a low cost, as well as optimization of taxation through FLP (individuals - entrepreneurs). Of the total number of IT specialists in Ukraine, about 90% are registered as FLP.^[5]

Notes