Economic impact of IT Industry in Lviv reached $1 billion – IT Cluster research

Lviv IT Сluster and Fama social agency conducted annual IT research of Lviv market. The researchers polled over 800 IT specialists from Lviv, reviewed 317 companies and made eight in-depth interviews with top managers of the local firms.

 ІТ Industry Growth Dynamics

In 2018, 70 new IT companies started their work in Lviv, their total number increased from 247 to 317. Thus, the growth dynamics makes 28% per annum. The market structure remains unchanged; according to IT Cluster,  90% of the market are made of small and middle-sized companies, and  10%  are the large companies (with more than 250 employees). And the half of IT specialists of Lviv work in the large companies.

The number of IT specialists also increases showing the average annual dynamics of 25%. According to the researchers, there are 20,000 – 21,000 IT specialists in Lviv as of 2018. It can be forecast that there will be 24,000 IT specialists in Lviv till the end of 2019.

A human capital increases by means of two sources: graduates from higher educational institutions and specialized courses, as well as internal migration. According to the information of Lviv higher educational institutions, 5,000 students who currently study in their 4th-6th years will be ready to start working at the local IT companies till the end of 2019. According to the research, 39.1% of IT specialists moved to Lviv from other cities, among them 22.2% are from other regions of Ukraine.

Economic Performance

The turnover of Lviv IT Industry made $618 million in 2017. The economic benefit created by Lviv IT Industry in 2017 is almost $1 billion as compared to$734 million in 2016.  In 2017, the IT share in the gross regional product of Lviv ($2.7 billion) made 21%.

The technology industry has created about 63,000 new job positions in the city, among them, 21,000 people constitute direct employment, and 42,000 – indirect and induced employment.

The incomes of IT specialists have also increased this year: in 2017, the average salary was $1,740, and in 2018 – $1,880. The recorded growth dynamics is 8%.

Portrait and Costs of IT specialists

The share of men in Lviv IT Industry is 67%, and women – 33%, respectively. The average age is 28 years old. According to the survey of 800 respondents, the IT specialists in Lviv give weight to their health, travel, are engaged for charitable causes and work as freelancers in their own time.

The most IT specialists in the survey play sports (63%), half of them are married (48%), and almost the third part has kids (28%). 81% of people in the survey said that they saved money and only 34% of them kept their money in the Ukrainian banks. Almost half of them has own cars, among them, 17% have two or more cars. 74% of respondents travelled for vacations within Ukraine, and 70% – abroad during the year.

48% of IT specialists support charitable initiatives. They spent $2.4 million for charitable causes last year. This is twice more than expenses for going to the cinema ($1.2 million), for example. They provide not only financial support (88.2%), but also free-of-charge intellectual services (18.1%), and personal support (14.3%).

Main Trends

The industry is undoubtedly growing both within the existing companies and establishing new ones. Among the factors contributing to success and potential development of the IT Industry in Lviv, the experts point out the increasing demand for IT products and services, attractability of the city for specialists from other regions of Ukraine and favorable investment environment, as well as fruitful cooperation of the industry with the educational institutions of the city and IT infrastructure development.