Ukrainian software development industry: year in review, prospects for 2019

Ukrainian software development industry: year in review, prospects for 2019
N-iX
2019-02-04T19:35:49+00:00

2018 was a year of booming growth and success for the Ukrainian software development industry. The country is on its way to becoming the world’s major tech powerhouse. We took a retrospective look at the software development industry in Ukraine to analyze the key milestones of 2018 that helped...

Ukrainian software development industry: year in review, prospects for 2019
By Marta Hlova February 04, 2019

2018 was a year of booming growth and success for the Ukrainian software development industry. The country is on its way to becoming the world’s major tech powerhouse. We took a retrospective look at the software development industry in Ukraine to analyze the key milestones of 2018 that helped it prosper. Based on multiple research, we reveal the dynamics of the IT industry growth and make projections for the next year. Here is everything you need to know about the Ukrainian IT landscape to make informative decisions about hiring a development team in 2019 and beyond.

A brief overview of the Ukrainian IT industry in 2018

Ukrainian software development industry has grown by 26%

In 2018, software development services became the second largest export service industry, amounting to more than 20% of all Ukrainian exports. The goods processing sector that historically topped the list took the first place. However, with the current IT market growth rate of 26%, it could soon become the number one export of the country.

Ukraine boasts the largest and fastest-growing number of IT professionals in Europe. This figure ranges from 160,000 to 172,000 people, according to DOU and StackOverflow correspondingly. Software developers make up the lion’s share of the pie.

IT specialists in Ukraine

Source: DOU

As the demand for tech talent increases, the inflow of specialists comes not only from the IT sector but also from other industries. People are tempted to venture into the IT industry to embark on the new career that offers so many opportunities and benefits. Thanks to the variety of specialized IT courses and traineeship programs many tech companies provide, it’s getting easier to change occupation and become a professional in the IT sector.

Ukrainian IT companies are fighting for the title of the best employer

There are currently more than about 2,000 tech companies operating on the market. The majority of them provides IT services to multiple clients abroad. Others function either as Global In-house Centers working for one parent company or as independent product companies.the diversity of IT companies in Ukraine

Source: IT Ukraine Association

According to the latest employer rating conducted by DOU, such companies as Infopulse, SoftServe, GlobalLogic  Epam, and Ciklum are the winners among the largest Ukrainian IT companies with more than 1,500 professionals. N-iX is ranked among the top 5 best employers in the category of 800-1,500 IT specialists.

IT companies in Ukraine follow different strategies towards attracting, engaging, and retaining top talent. Many of them develop detailed career plans for employees and put emphasis on the mentoring and leadership programs. Others work hard on smart hiring practices and offer various bonuses and perks. As the opportunity for IT specialists in the market is very high, competition between companies for the best talent is increasing.

Kyiv and Lviv are the most vibrant IT hubs in Ukraine

Not so long ago, Lviv was an industrial city and Kyiv was all about banking and finance. But Informational Technology has changed it all and now these are the largest cities where the majority of software developers live and work.

Ukrainian IT industry: major IT hubs

Source: N-iX

The recent research by Lviv IT Cluster traces the development trends of the IT industry in Lviv and reveals the IT dynamics of the local IT market.

  • The number of IT specialists increases on average by 25% annually. As of 2018, there were 21,000 IT specialists working in Lviv. And in 2019, this figure is going to surpass 24,000.
  • The number of IT companies grew by 28% from 247 in 2017 to 317 in 2018.
  • In general, IT companies spent $1M for further training of employees.
  • 13,836 of students are studying at universities which have tech programs. By the end of 2019, there will be 5,000 graduates ready to start their career in IT.
  • Lviv IT sector created about 63,000 new jobs in other industries.

Kyiv is the largest IT  hub in Ukraine and home to over 1,000 startups and product companies. Such successful and powerful software companies like Terrasoft, MacPaw, PetCube, Netpeak, Jooble, TemplateMonster and Grammarly originate from Kyiv.

  • Kyiv accommodates nearly 47% of IT specialists available in the country.
  • 43 companies from Top 50 largest Ukrainian IT companies have offices in Kyiv. 13 of them have only one office and it is located in Kyiv.
  • Annually, 38 tech universities give the county about 16,000 qualified IT professionals.
  • UNIT.City, which is located in Kyiv, is Ukraine’s first innovation park that hosts now 90 companies, 900 students, and 300+ events annually.

Java is the most popular programming language in Ukraine

According to DOU survey, Java, JavaScript, C#, PHP, and Python are the top 5 programming technologies used in Ukraine. If to analyze their growth dynamics over the recent years, Java remains the most popular language, nonetheless, its market share during the last 2 years has slightly decreased. The popularity of C# is slowly falling following the tendencies of the previous years, while the market share of Python is steadily growing as it’s becoming the most wanted programming language in the world. As data shows, 52% of surveyed software developers in Ukraine plan to learn this technology in the next year.

Go and TypeScript for the first time entered the list of the top ten most used technologies and Clojure is placed among the top twenty. Interestingly, software engineers who use Swift and Kotlin for iOS and Android respectively, report that they will choose these technologies again for their next project. The next preferred language is Go, and the favorites of previous years: Scala, C #, Clojure go after.

The biggest IT conferences in Ukraine gathered over 16,000 participants 

The number of IT events in Ukraine is growing all the time. In 2018, over 16,000 participants gathered at the major Ukrainian IT conferences such as IT Arena, GDG DevFest, Dev Challenge 12, Agile EE Conference, iForum, JEEConf, Mobile Beach Conference, IT Weekend Ukraine, and Outsource People Kyiv. Events like these help shape a vibrant IT community in Ukraine and offer unique learning and networking opportunities. This is where local companies stand out and people get incredible insights from speakers from around the world.

Ukrainian universities launched innovative tech programs

Ukraine has always been known for its traditionally strong engineering education. Last year was particularly successful in terms of the number of new tech programs that were initiated. All Ukrainian IT clusters put special effort into launching educational projects for school and university students.

IT graduates in 2018

Source: IT Ukraine Association

In particular, Lviv IT cluster opened 4 new programs in Lviv Polytechnic and Cybersecurity in Lviv State University of Life Safety: Robotics, Business Analysis, and Cybersecurity. It set up 4 innovation labs to help future Ukrainian engineers master IoT, AI, Machine Learning, Data Science, and other cutting-edge technologies at their universities.

Lviv IT Cluster also visited 100 schools in Lviv and Lviv region. As a result, students from 50 schools were invited to some of Lviv’s tech companies to have an inside look at the work of the city’s IT specialists. According to the IT Future survey 2018, 82% of students claim that they are interested to start a career in the IT sphere.

Ukrainian software development companies hit major global ratings

In 2018, Ukraine and Ukrainian tech companies appeared among top positions in many influential international rankings.

  • The Global Sourcing Association has recognized Ukraine as the UK’s best delivery destination of the year.
  • The Global Outsourcing 100 included 18 Ukrainian tech companies in the annual ranking of the best suppliers of IT services in the world.
  • Clutch placed a number of Ukrainian IT companies among top providers in different categories. N-iX was named one of the 2018 Top B2B Companies in Ukraine.
  • According to SkillValue, Ukraine ranks 8th among the world’s top countries with the best programmers with an average score index 91.26%.

Indeed, this recognition is the result of the consolidated effort made by multiple Ukrainian tech companies during the last few years.

Ukrainian software development industry. Prospects for 2019 and beyond

#1. Ukrainian IT industry is to grow by 30%

The development of the Ukrainian IT industry is far ahead of the average growth rate of the sector in the world. Now, it is showing a sustainable growth rate of 20-26% annually. But next year, the IT market is poised to accelerate at the rate of 25-30%. The number of IT specialists is going to surpass the 200,000 people by 2020. The IT workforce is expected to become more mature as Ukrainian software engineers will get more skilled year by year.

#2. Ukrainian government will support the development of the industry

Many companies that are looking for a partner in Ukraine wonder if the country is safe in terms of business climate and information security. As the Ukrainian IT export volume accounts for 5% of total export revenue and 3,5% of the country’s GDP, the government takes proactive steps to support the industry. In the upcoming years, it plans to develop a sector-specific regulation for the Ukrainian software development industry in the areas of taxation, data protection, employment, and service export that will facilitate cross-border business operations. The priorities for the next year are the simplification of the export of services from Ukraine, the possibility for foreigners to get long-term visas for employment, and the modernization of the education system.

#3. Ukrainian developers will prefer staying in Ukraine, many will return to Ukraine

According to the data from the IT Ukraine Association report, the percentage of IT employees who decide to migrate overseas has significantly decreased in recent years. This tendency will continue in the following year. Moreover, Ukraine expects to see the inflow of IT specialists back home. Now, the reason #1 why young specialists settle for jobs overseas is their desire to achieve hands-on experience working for big techs, such as Google, Amazon, Facebook, etc.

The majority of Ukrainian developers, however, plan to return home because in the cost of living is quite low in Ukraine and they can afford much more than in North American and Western European countries. So they have all the conditions to live a fulfilling life without high living costs and the big city hustle.

#4 IT Clusters will consolidate their efforts

Currently, there are IT clusters in 17 major Ukrainian cities. Next year, they plan to collaborate on multiple projects to boost the image of Ukraine on the worldwide IT outsourcing scene. They will work on developing effective infrastructure to create cities where developers want to live and work. They are going to initiate multiple programs on the state level to work with universities to attract top talent and initiate projects at schools to inform students about IT career benefits.

#5 Ukrainian IT companies will invest in leadership programs and improving employees’ management skills

We are going to witness a shift in the education of IT specialists with the focus not only on hard skills but also soft skills. Ukrainian IT companies used to invest heavily in technical education instead of empowering leadership and self-organization at all levels. Management education was rather underestimated. Now, tech companies embrace the change and are focusing more on improving the leadership skills of employees and nurturing qualified managers within a company. In the future, this trend will only grow with every company launching professional leadership programs for its employees.

Conclusion

Ukrainian software development industry is among the country’s fastest growing sectors. Tech companies in Ukraine ensure a steady capital inflow into the country’s economy, attracting foreign investments and paying fair taxes. They help create a systemic demand for consumer services and goods in the field of education, insurance, healthcare, real estate, etc. At large, one IT specialist creates 4 different jobs in other related industries. Judging from the dynamics of the IT market growth, 2019 will see major growth in the number of local tech companies and IT specialists. International investors will discover Ukraine as the most favorable country to set up a dedicated development team. With the solid technical education, a large pool of engineering talent and a booming tech ecosystem, Ukraine has all chances to become the world’s largest destination in the tech industry.

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About N-iX

N-iX is an Eastern European provider of software development services with 900+ expert software engineers onboard that power innovative technology businesses. Since 2002 we have formed strategic partnerships with a variety of global industry leaders including OpenText, Novell, Lebara, Currencycloud and over 50 other medium and large-scale businesses. With delivery centers in Ukraine, Poland, Bulgaria, and Belarus, we deliver excellence in software engineering and deep expertise in a range of verticals including finance, healthcare, hospitality, telecom, energy and enterprise content management helping our clients to innovate and implement technology transformations.

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