Ukraine to double its IT sector in prospect

Ukraine to double its IT sector in prospect

Recent public talk delivered by IT industry ambassador of Ukraine Dmytro Shymkiv and the international analyst Sean Manchanda revealed aspects of the current state of IT sector in Ukraine and its ...

Global scale IT analyst and consultant Mr. Sean Manchanda expects Ukrainian IT sector to reach up to 8% of the country’s GDP in the nearest future. The message came across during a public talk conference Digital Change Experience organized by IT Committee of European Business Association at info-center IT Prospect. To note, IT sector surged by outstanding 25% y/y and reached 3% of Ukraine’s GDP in 2015, amid hybrid war with Russia.

From a global standpoint, Ukraine has a competitive advantage in customs engineering due to its legacy of science in math, physics and robotics. Moreover, local largest players like Softserve, Luxoft, Epam already carry large scale and intensive engineering orders worldwide. Why not to build on that? Governmental incentives may be offered for domestic or foreign IT companies, such as free of charge land lease prospects, competitive tax regimes at free economic zones, and easy market entry regulations, elaborated Mr. Sean Manchanda. Lagging behind these widely used approaches may set Ukraine in competition with Belorussia, Serbia or the like in IT industry.

It is widely known that many SME (small and medium enterprises) of IT offices in Ukraine have to disguise their origin and present themselves, as US or Cypriot companies or other so that to act global. Needless to say that negative publicity brings unwilling attitudes towards Ukraine as an investment field: Donetsk hybrid war sponsored by Russia, Malaysian Airlines etc. But Israel is a good example of how to act during permanent state of war: mechanisms of strong PR and marketing. Ukrainian companies which incorporated themselves in Europe have received good words henceforth. As a result, they have become a Silicon Valley like companies with their offices over Ukraine.

On the other hand, IT industry ambassador of Ukraine Mr. Dmytro Shymkiv advocated remarkable investment deals in IT last year. Horizon Capital acquired a stake in leading Ukrainian e-commerce company Rozetka, Oracle bought cloud based software with Ukrainian roots Maxymiser servicing Allianz, HSBC, Lufthansa, Tommy Hilfiger etc, EBRD channeled USD 5mln into DepositPhotos, Ericsson is setting up office in Ukraine and so on. Not to mention, start-ups and crowdfunding of PetCube, Integra and tens of others.

In matter of government incentives, a new generation public officer mentioned of decentralization laws impacting IT sector quite positively. Now, regional city mayors and state officials are setting out to provide support to IT companies, as money, received from lavish IT income tax, remain at regional budgets due to decentralization. To note, Lviv, Kiyv, Kharkiv, and Odessa are the most developed IT cities in Ukraine.

Let us hope that modern masterminds from Ukraine will continue traditions of Fedir Pirotsky (electric trams), Ivan Puluy (x-rays), Igor Sikorsky (helicopters), Yuriy Kondrayuk (moon landing math), Sergey Korolyov (practical astronautics), Lyubomyr Romankiv (invention of hard disk drive) and many others. A little lyrical and true, the speakers highly praised set books of 50 inventions bestowed by Ukraine

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