While businesses around the world are struggling amid unprecedented challenges of the COVID crisis, Ukraine's IT sector stands strong.
Recently released annual figures for the Ukrainian IT industry underline its world-beating performance, with its exports up by 20.4% in 2020, as per the National Bank, Peter Dickinson wrote for the Atlantic Council.
The sector's annual exports exceeded US$5 billion mark, for the first time ever, following a $853 million increase on year.
Based on these recent figures, the Ukrainian IT industry now accounts for 8.3% of total exports, which makes the IT sector one of the key engines driving the economy and places it closer than ever in terms of significance to such heavyweights as agriculture and metallurgy.
Less than a decade ago in 2013, the IT sector accounted for just 1.6% of Ukrainian exports, but this share has now undergone a fivefold increase.
"What helped achieve this year’s impressive results? Minimum red tape, the professionalism of Ukraine’s IT specialists, and a stable industry-wide tax policy,” says the president of the American Chamber of Commerce in Ukraine, Andy Hunder.
He believes that sustainability of further industry expansion will depend on the approach the government adopts towards the sector.
"It is vital to ensure sustainable and transparent conditions for the IT sector to stimulate further growth and development. Namely, this means preventing increased regulation. It is also essential to guarantee IT companies freedom of their activities, business models, and forms of interaction with human capital. IT companies must be safeguarded from unlawful interference in legitimate business activities.”
Read alsoUpdate on average salaries in Ukraine IT industryCurrent projections indicate that Ukrainian universities will be producing around 20,000 IT specialist graduates annually by 2024. However, this figure is significantly lower than the anticipated industry requirement of 30,000 to 50,000 new specialists per year. With approximately 200,000 IT specialists, the sector is already a significant employer, particularly among younger Ukrainians.
However, diversification away from the current emphasis on outsourcing has long been a topic of discussion among IT professionals. Ukraine has earned a reputation in recent years as one of the world’s leading IT outsourcing destinations, but many feel it is time for the country to move up the tech food chain.
This progress will depend on a number of factors including investment, government regulatory interventions, and a sufficient supply of qualified young professionals entering the industry. Despite these challenges, the current outlook remains highly favorable. With a growing global reputation and soaring export figures, Ukraine's IT industry is the standout performer as the country looks towards a post-pandemic economic recovery.
In October 2020, Ukraine's Deputy Prime Minister and Minister for Digital Transformation Mykhailo Fedorov said the ministry aimed to increase the share of IT and creative industries in the country's GDP from the current 3%-4%, to 10%.