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Ukraine - the new silicon valley?

Ukraine is rapidly developing its key competences in IT. Throughout past decade the IT market in Ukraine has grown dramatically, gaining around 30-40% percent every year.

The incentives for such a high growth have been the currency rate fluctuations and relatively cheap but extremely qualified workforce. The quantity of the IT specialists in Ukraine reaches 100000 now and growing by 10-15% annually, therefore the predictions are that by year 2020 this number will double. Ukraine has many institutions (both universities and independent courses) where people can learn programming; around 15000 specialists graduate yearly.
As the information is easy to transfer across distance and the knowledge is not, the Ukrainian specialists and companies tend to agglomerate and therefore build IT clusters. Of course, many developers have no problem working remotely from home or anywhere on the planet, but for great projects that demand innovativeness, cumulating bright minds in one place is essential.

how the workforce is distributed throughout Ukraine

Ukraine has a total population of around 42 million people and 70% of the urban population is concentrated in and around large cities.
Where there are large cities there’s industry and there’s a need for new workers.

Kyiv 46.6%
Kharkiv 16.2%
Lviv 9.9%
Dnipropentrovsk 7.9%
Odessa 5.5%
Vinnytsa 1.8%
Zaporizhia 1.3%
Nikolaev 1.1%
Ivano-Frankivsk 1.1%
Ternopil/Zhitomir 0.8%
Other locations 7%

Kyiv is the capital of Ukraine and one of its biggest business and cultural centers. There are many industries located in Kyiv, which by circular causality attracts even more companies to join the market. On the table on the left is the statistics of all the developers in % and their location. Therefore one can distinguish the main centers of the IT business in Ukraine. Kyiv, Kharkiv, Lviv, Dnipropetrovsk and Odessa serve the centers of the IT software development with the highest percentage of developers located in these regions.

Kyiv as the Software development center

Kyiv is a highly developed European city, with highly developed industry and infrastructure, with two international airports nearby. More than 50 international outsourcing companies are located here, not to mention thousands of IT startups.
Kyiv is considered to be an innovation hub, previously by heavy machinery industry and nowadays by the emerging IT market. It is gathering specialists from all over Ukraine.
Not only is Kyiv that attractive for IT specialists because of the amount of companies and developers located there, but the salaries that they are being paid. That makes sense as there is competition of labor and therefore competition of wages. The prices of living also vary from city to city, but nevertheless the statistics are telling us that Kyiv is being quite a suitable place for IT development and outsourcing possibilities.

Software development potential.

Central Ukraine and Dnipropetrovsk is another area in Ukraine where the IT is flourishing. It has the fourth largest IT outsourcing centers community in Ukraine and the second community of R&D centers right after Kyiv. Historically, it has been one of the centers for rocket science and mechanical engineering, therefore having many educational centers for tech specialists. When the need for such industries decreased and the need for IT specialists emerged, some of the educational institutions provided courses and university curriculums to meet the demand. Although the outsourcing is not as popular here as it is in Kyiv, there are many R&D centers where innovative products in virtualization and security, along with more traditional IT services are produced.
The salaries as well as the costs of living are lower than in Kyiv, although the quality of the specialists is about the same.

Students paradise and Software development center #2

Kharkiv is the second largest city in Ukraine. It has all the needed infrastructure as well as airport and it’s located within 4 hours drive from Kyiv. The educational and technical base of Kharkiv is quite impressive and stands on around the same level as in Kyiv. It is sometimes called “a city of students” as there are around 69 educational institutions that have more than 200000 students. Around 2000 IT specialists graduate from Kharkiv universities annually. Over 22000 IT specialists work on the territory of Kharkiv and the region, working mostly in software products development, freelance, startups and security.

Lviv, the Little Europe in Ukraine and its IT workforce

Lviv is called “Little Europe in Ukraine” due to its beautiful architecture and long proud history. The region is closest to Europe both geographically and mentally. This region is the third by the number of IT companies located here. It attracts both Ukrainian and international companies. There are some big IT clusters there. There are many educational institutions that produce around 1500 IT specialists yearly.
It is a great place both for R&D and outsourcing; it is an extremely powerful region in terms of IT workforce.

Software development in Odessa - does sunny weather mean sunny perspective?

Ah, Odessa, the “Pearl by the Sea”. Though it does not hold the number one position in terms of the number of IT companies located here, it employs more than 6000 of IT professionals. It’s a great place for startups and it has many R&D and outsourcing companies. It is close to the sea which makes it a great place for logistics companies. The IT companies are not as big as in the bigger regions, but for some companies it would be rather an advantage than a disadvantage.

Drawing Conclusions: Ukraine as new Europes’ “software hub”

The conclusion is such that for a relatively low amount of money you can get your project done with the best quality possible by true professional no matter where you go to in Ukraine. That is one of the reasons why Ukraine has become so attractive in terms of outsourcing possibilities. Most of the developers work as independent contractors and therefore neither the company nor the workers are paying high taxes. Moreover, there are some reforms in progress to reduce taxation for the IT industry that would make it even more attractive for investment.
As for the IT industries that the developers in Ukraine work in the statistics are quite predictable. As Ukraine is considered to be the new “software hub” of Europe, (Read article Ukraine the IT Utopia) the biggest percentage of developers are involved in this sector of IT. Business is growing in Ukraine no matter the political disturbances and therefore the need for new specialists is growing as well.

Written by Taras Gudzovskyi