How the IT industry of Ukraine and Eastern Europe works: a report
According to the assessment of compilers, Ukraine, Belarus, Poland and Romania formed a cluster that is among the top 5 global software development centers, however, its share is still small – only 5% of world service supplies.
The total volume of IT exports from these countries by the end of 2018 was about $13 billion, $4.5 billion of which is Ukrainian. For comparison, China provided IT-services for $38 billion, and India – for $111 billion.
Eastern Europe in numbers:
- The total volume of IT exports is $13 billion.
- Profit of the largest 477 IT companies from the list is $5 billion.
- Annual revenue growth in the region is 20-25% against 5% worldwide.
- The number of IT specialists in the region is 700,000 people.
- The annual number of graduates in IT field is 60,000 people.
- The number of mergers and acquisitions for the 2015-2018 year is 74 transactions.
The report also provides a brief excerpt for each of the leading countries in the region.
- 35% of revenue in the market falls on software development.
- By 2022, sales of IT services in the country should reach 14 billion euros.
- Wages are rising, but still they are 46% lower than in Germany.
- According to the World Bank assessment, the country is among the top ten countries in the world in conducting IT-friendly reforms.
- 60.5% of IT specialists are engaged in outsourcing services.
- IT industry ranks third in the country in terms of the number of vacancies.
- From 2014 to 2017, the turnover of the country’s IT sector grew by an average of 13.4%. Projected growth is 15.3%.
- Altogether, 185,00 specialists are employed in the IT industry.
- The software and IT services sector has 96,000 employees. Estimation by 2021 is 125,000 people.
- Since 2013, wages have increased by an average of 11.5% per year.
- Wages are still more than 50% lower than German ones.
Ukraine in numbers
- The number of IT specialists is 172,000 people. Most (46%) work in outsourcing. Product development employed 29% of the staff and 11% of outstaff.
- 27% of specialists have 1-2 years of experience. Another 29% work in the field for 3-5 years. There are 17% employees with experience from 6 to 10 years.
- Men account for 77%, and 23% for women.
- 72% of employees are under 30 years old.
- The annual number of graduates in IT field is 23,000.
- The number of universities and colleges, graduating IT specialists is 150.
- In 2018, the share of IT exports rose to 4.5%. This is the second place in the overall export structure. The expected growth by 2025 is 8.4%.
Companies and locations:
- The total number of service IT-companies is more than 750.
- The number of service IT-companies with a staff of more than 50 people is 245.
- The most popular form of organization of the company is Limited Liability Company, there are more than 45% of such business organizations.
- Most IT companies are located in Kyiv (118). This is followed by Kharkiv (68), Lviv (64) and Odesa (41).
- More than 60% of companies have a head office in Ukraine. Another 21% are located in the United States, 14% – in Europe.
IT business revenue:
- Annual profit of 245 largest IT-companies is $2.07 billion.
- The average revenue per engineer is $50,000 per year. The average hourly rate is $34.
- More than 50% of revenue comes from the US market. The United Kingdom comes in the second place.
- 78% of companies make money on web development, 64% – on the mobile applications development.
- Office rental prices vary. A-class office space in Kyiv is $28-38/month, in Lviv/Odesa/Kharkiv – $3-5.
It is reported that attracting IT specialists in Kyiv costs the most. The salaries of project managers here are higher by 22%, team leads – by 19%, senior project managers – 3%.
Earlier AIN.UA listed the companies that could have been included in the industry report of UNIT.City.