Growing IT-Sector in Kyiv, Ukraine

Independence square in Kiev, Ukraine.

KYIV, Ukraine (ViaNews) – For the last decade, the IT industry in Ukraine reached its heyday. Currently, 100 000 IT specialists are employed in Ukraine, and 13 national IT companies were included in the list of TOP-100 best outsourcing companies worldwide. Meanwhile, export of IT services amounted to 3% of country’s GDP. Today’s Kyiv is considered the new IT hub of the Eastern Europe and there are several reasons for such loud affirmations.

Probably, the first and the main reason for that is the education. Ukrainian students have the chance to obtain strong mathematical and engineering skills in the national universities. Even though these higher institutions might not provide students with the most innovative information in the sphere, they still give enough basic knowledge for the further development of the industry. What is more, because of the strong tech skills, many professionals create their innovative startups during their University periods. For instance, one of the most successful hardware companies, named Petcube, took its beginning from the National Polytechnical University where the students decided to make a funny invention for their pets. Moreover, some educational institutions launch the online-courses for future IT professionals. In recent years, the amount of the graduated IT-juniors was close to 30 000.

Many Ukrainian startups became international. Jooble, PaymetWall, Augmented Pixels, Sixa, Terrasoft, Grammarly, and Depositphotos have all been launched in Ukraine and today are used by consumers all over the world.

The next reason for the growth of IT-market in Ukraine is the country’s economic situation. On the one hand, the salaries in the tech industry might be 10 times higher than the average Ukrainian salaries. On the other hand, Ukrainian developers may afford much more goods and higher standards of living for similar salaries in U.S or Europe. As a result, there is no economic migration for the Ukrainian IT-professionals. For them, it is more comfortable to stay in the country rather than go abroad. Meanwhile, the situation is also profitable for the international companies. The salaries they pay to the Ukrainian IT-employees are high considering Ukrainian labor market but still lower than the average earnings of tech-professionals in the U.S. or Europe. Thus, big companies have the chance to pay less for the talented workers and keep them satisfied with their earnings.

Considering all listed factors, big investors invest in the Ukrainian companies, even despite the war on the East of the country. In 2015, $ 130 million was invested in the national tech companies. 48% of these investments were made by foreign companies. Meanwhile, the Financial Times called Ukraine the largest gainer of the ranking Ease of Doing Business since 2010. What that means that in 7 years the country has improved its position on 24,21 points.

Kyiv citizens are waiting for the opening of various interesting initiatives in 2017 – the Creative Enterprise Quarter, the Technology Companies’ Development Center. Kyiv Smart City Hub, VDNH Tech, Lightfield Production and other creative spaces and co-workings have already been opened.

Ukranian president Petro Poroshenko has recently called the IT-sector one of the main economic priorities in the country. Two months before, at the meeting with Ukrainian Venture Capital and Private Equity Association, Ukrainian prime-minister promised to establish Fund-of-Funds. The main aim of this organization would be to invest in existing and new venture funds in Ukraine on a competitive basis, which could finally invest in more than 3000 already existing Ukrainian start-ups.