Ukraine and other CEE countries as global software R&D paradise

Ukraine knows how to astonish the world: recent presidential election brought as the winner young comedian with no party affiliation neither political experience and whose presidential campaign was entirely virtual: without any face-to-face meetings, public speeches, tiring travels across the country or press conferences with nasty journalists. Political technologist say it was an example of phenomenal manipulation with people’s minds. However, that is also convincing prove of Ukraine becoming new Mecca for IT innovations and experiments.

Ukraine has already reached the position of the country with the fastest developing IT sector. In 2018, software development became the second largest export service industry, which exceeded one fifth of all Ukrainian exports. Ukraine became the world’s third country by the number of certified IT specialists represented by 166,000 professionals, and their number promises growing till 250,000 by 2020. Investments in Ukrainian IT companies reached $630 million within the last five years. Year ago Ukraine was named the “Outsourcing Destination of the Year” by GSA. In 2019, several international reports named Ukraine “hi-tech talents’ paradise number one” closely followed only by Poland with 140,000 IT skilled specialists and Romania with almost 100,000.  Positive sign is improving of gender balance in the market of IT services, in Ukraine female specialists make already almost a quarter of the professionals (16 per cent two year ago), thus diversity contributes to the IT market development as well.

Emerging markets of Central and Eastern Europe (CEE) is now the world’s most attractive outsourcing destinations. In 2018 only four countries of the region – Ukraine, Poland, Romania and Belarus – have exported services for almost 12 billion euro. IT services sales continue their strong growth and are expected to reach 14 billion euros in 2022. According to the Report “Software Development in Ukraine, Poland, Belarus and Romania”, IT services and software development market in these countries has been growing 20-25 per cent annually, which is 4-5 times faster than the global average. CEE companies provide highly-competent outsourcing developers who bring passion and novelty into their job. Huge tech talent community, competitive prices, and high quality of engineering skills are the main factors that drive this growth. Governmental support also matters. For instance, new Ukrainian government, which came after 2014 “revolution of dignity” adopted the laws favourable for foreign investments. Romanian administration created encouraging tax conditions for software development activities. In Belarus the residential IT companies have been discharged from taxation, and more than 60 per cent of IT professionals are engaged now in software development outsourcing services.

The CEE region is abundant in highly-qualified tech professionals. They offer a wide range of IT services from software development itself to IT operations and digital marketing. Such giants as Apple, Google, IBM, Microsoft, Ericsson, and Huawei were the first to find out that the tech talent in CEE is world class and opened the development centres there. Not the last reason for outsourcing to CEE is English proficiency of the local partners, for example Poland has the 11th place in the world rating compared to India’s 27th and China’s 36th.

I had several occasions of assisting my clients on IT markets of Central and Eastern Europe – Serbia, Croatia, Poland, most recently Ukraine and Belarus. I know that many Finnish hi-tech companies experience lack of gifted software engineers. According to the Finnish Information Processing Association, Finland will be missing 15,000 IT engineers by 2020. For some Finnish SMEs outsourcing software development becomes a strategic step. Ukraine, Poland, Romania and other CEE markets could help you in filling this gap, save up to 50 per cent of costs and as a bonus they can also share their own innovations and know-how. Instead of employing workers from far away countries like India, China or Vietnam, Finnish entrepreneurs can outsource to their neighbours in Central and Eastern Europe. As advantages, no or practically no time difference, one to three hours’ air travel distance, and pleasure working with people of close cultural and social backgrounds.

If your company needs finding cooperation partners on the ICT markets in the CEE region, it would be my great pleasure to accompany you in this endeavour and help you to discovery in which particular country of the region you can find the best experts in various IT technologies that you deal with.

Julkaistu 29.04.2019

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