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.

Poland

• 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.

Belarus

• 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.

Romania

• 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

Total information:

• 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.

Distribution of specialists by type of company and experience

• 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.

Distribution of specialists by age and gender

• 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.

Ukrainian IT Clusters

• 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%.

Salaries of IT specialists in Kyiv, Ukrainian cities and the national average

Earlier AIN.UA listed the companies that could have been included in the industry report of UNIT.City.