Ukraine: The Most Promising Tech Hub in Europe

Despite the corona crisis, the tech sector is one of the few industries both in Ukraine and globally that suffered minimum losses and swiftly adapted to the challenges of the new reality. Although the corona crisis brought a slight halt to operations in spring 2020, most tech companies have made a painless transition to remote work. Today, we’ll dive into the current tech market trends in Ukraine and learn what makes it a promising tech destination.

Vibrant tech market

Ukraine boasts a lively tech sector and a promising startup scene. The Ukrainian tech market has grown twofold over the past four years, reaching 184,700 IT specialists, according to the 2019’s research by N-iX. According to the 2019 CEE report, the Ukrainian software development sector increased by 19% in 2018 and continues to grow steadily. The tech industry is one of the major service export players, bringing the country around $5 billion a year. 

The reports by the World Bank, PwC, and IT Ukraine Association revealed that more than 4000 technology companies are currently operating on the Ukrainian market, and Information and communication technologies (ICT) is one of the largest industries, accounting for 20% of all Ukrainian services exports.

Ukrainian tech companies work with 228 countries, and the most popular markets are the US (50%), Europe (35%), and Canada (8%). According to A.T. Kearney GSLI 2019, the country’s attractiveness index improved in 10 years from 42nd place in 2009 to 20th place in 2019. Since Ukrainian tech companies provide high-quality services and expertise in various sought-after areas such as Big Data, telecom, cloud services, e-commerce, fintech, more than 100 companies on the Fortune 500 list became their clients.

In the StartupBlink global startup ecosystem report 2020, Ukraine ranked 29th among 100 startup-friendly countries. As compared to 2019, Ukraine jumped two positions to 29th, making it to the top 30 ecosystems worldwide. Kyiv holds 32nd place globally, having reached the top 10 ranked European cities at the 8th. The Ukrainian startup ecosystem is concentrated in 7 cities, among which Lviv, Odesa, Kharkiv, and Ternopil. “The Ukrainian startup ecosystem is truly inspiring. The country has been going through economic difficulties for several years but still manages to create scalable and global technology.

Diverse and cost-effective tech talent

According to the latest estimates, a tech employee’s average salary in Ukraine equals $2,300 per month (after tax). In contrast, the average salary in Ukraine in September of 2020 amounted to UAH 11,998, which makes $426,98.

The all-Ukrainian anonymous salary survey conducted by DOU revealed a variation in pay between different seniority levels, cities, and programming languages. 12,419 tech specialists took part in the survey, among them Software Engineers, Tech/Team Leads, and System Architects, with the largest number of respondents from Kyiv (44%), Kharkiv (14%), and Lviv (13%). 

Seniority

The salary range is largely affected by the level of seniority. In particular, Junior SEs, SEs, and Senior SEs in Kyiv get $800, $2200, and $4000, respectively. In other cities, Junior SEs, on average, receive $100-150 less. The difference between SE’s and Senior SE’s salaries amounts to $ 700-1000.

Cities

JavaScript, C # / .NET, and Java developers, which are the most popular programming languages, earn the most in Kyiv – $2350, $2800, and $3000, respectively. The highest-paid specialists are Scala and Go-developers in Kyiv who make $4000. 

Specialization

Senior Back-end developers make the most ($3750), while Junior Front-end developers receive a low of $650.

Programming languages

Salaries of Junior SEs with Java, C, and C ++ reach $800, whereas Senior SE and SE with Scala and Go can earn around $4400-4500 and $2400-2700, respectively.

The Ukrainian tech industry mostly relies on contract form of employment. Tech specialists work as entrepreneurs of the third group, paying a unified social tax, a monthly payment to the state budget regardless of the income amount, and 5% income tax. The last decade saw a boom in the tech industry, which is believed to be due to good government policies, particularly the cancelation of the value-added tax (VAT) for tech companies and reduction of income tax on employees to 5%. It has been appealing to both foreign and Ukrainian companies as it allows them to maximize their profits.

Lviv Ranks Second Among Best Ukrainian Cities for Tech

A popular Ukrainian tech media DOU.ua has published the results of a survey of tech professionals regarding Ukrainian cities. The purpose of the survey was to find out where is the best city in Ukraine for tech professionals to live and work.

Ivano-Frankivsk, Lviv, and Vinnytsia are the top three cities in Ukraine, taking first, second and third places, respectively. Lviv received the highest scores in the following categories (score scale: 1 to 22, where 1 is the best, 22 is the worst) – “Income and career opportunities in IT” (2), “General impressions of the city” (2-3), “Development of the IT community” (2), “Transport connection with other cities” (2), “Comfort of living and quality of the urban environment” (5), “Education” (3), “Healthcare” (4).

Medium-sized cities took the first positions in the ranking, overtaking cities with a population over 1 million. “Such results are quite unexpected for us, as currently, about 85% of tech professionals live in the five largest cities in Ukraine. However, these big cities, as the results show, are not the most convenient. Big cities have such advantages as good development of the tech industry, higher income of tech professionals, many job openings on the market, the big number of tech companies, and specialized events. They also have better educational opportunities and better healthcare. However, medium-sized cities have significantly better performance in other areas. First of all, regarding prices, particularly for real estate, regarding city infrastructure, ecological situation and crime rate,” the study says. 4,000 tech specialists took part in this survey.

What makes Lviv better?

Development of the tech community. Besides answers given by tech professionals, the number of tech events in the city was calculated. With 723 events, Lviv ranks second in this category (after Kyiv). The interviewed tech professionals also indicated that there are opportunities for tech business development (4.1 out of 5) and community development, as well as highlighted the diversity of tech professionals in Lviv (4.3 out of 5).

Income and career opportunities in tech. This category included the number of tech companies and vacancies on the tech job market, median income of tech professionals, and respondent opinions. According to the number of tech vacancies, Lviv ranks third after Kyiv and Kharkiv. The level of tech professionals’ income was rated with a total score of 4.1 out of 5, and the diversity of vacancies was estimated at 4.3.

Transport connection with other cities and countries. Lviv and Kyiv are the cities where tech professionals are the most satisfied with transport connections (4.3 and 4.5 of 5 respectively). The number of flights and quality of train connection was also analyzed in this category.

The general impression of the city. Lviv received a total score of 8.6 out of 10 in this category, which means that tech professionals can recommend their friends to relocate here.

We see that the tech industry in Ukraine is concentrated in three main cities Kyiv, Lviv, and Kharkiv. Interestingly, according to statistics, there are more vacancies in Kharkiv than in Lviv, with more tech companies, and tech professionals. But according to the survey, there are more perspectives for the tech industry in Lviv,” the survey says.

Learn more about the survey here.

11 Tech Companies Recognized as 2021 Global Outsourcing 100

Every year the International Association of Outsourcing Professionals (IAOP) announces a list of the 100 best outsourcing companies in the world. Traditionally, the list includes Ukrainian companies. In 2021 the top 100 included 11 Ukrainian companies.

The Global Outsourcing 100 is an annual ranking of the best outsourcing companies in the world. The association claims that the list consists not only of those companies that are the best today but also of those that will become stars tomorrow. In order to select the best companies, a specialized jury analyzes their work on five criteria: size and growth, customer feedback, awards and certificates, innovation programs, and corporate social responsibility.

Ukrainian tech companies included in the list are Ciklum, Eleks, Infopulse, Innovecs, Intellias, Intetics, Miratech, N-iX, NIX, Program-Ace, Sigma Software. See the full list here.