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"The MESM (Small Electronic Calculating Machine*) was designed and constructed by Lebedev and a small group of coworkers at the Institute of Electrical Engineering in Kiev.
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Aug 2020

Why Ukraine is the modern haven for software development

Few people know that Europe’s first fully operational computer was built in Ukraine in 1951.[i] 70 years later we realise that this piece of mind-blowing machinery was a key milestone for Ukraine becoming an “IT nation”.

Many statistics and research experts regard this Eastern European giant as the number one outsourcing destination for IT professionals. Since its emergence as a new outsourcing location at the end of the 20th century, Ukraine has also secured its place as a leading software development hub in its own right. Current startups such as Grammarly and PetCube along with renowned unicorn tech founders such as Max Levchin (PayPal co-founder) and Jan Koum (Whatsapp co-founder) hold the Ukrainian IT community proud and the rest of the world in awe.

How does Ukraine rank among other software developing countries in Eastern Europe?

We took three countries to compare Ukraine with and three criteria as measurement units for comparison—IT proficiency, English proficiency and IT market statistics. Let’s go!

Ukraine

  • IT proficiency: As of 2019, the country boasts 38,000+ IT graduates. In the most productive Ukrainian ‘IT cities’ – Kyiv and Kharkiv – are over 45 universities and faculties offering undergraduate and graduate IT programs respectively. Kharkiv, the second-largest city, for instance, is known for its rapidly developing IT education cluster. This organisation which launches educational platforms for the youth and connects IT graduates with IT companies, serves more than 500 national and international IT companies.
  • English proficiency: According to the EF English Proficiency Index (EF EPI), Ukraine has moderate English Proficiency[ii]. This might be due to the fact that it has not even been thirty years since it broke away from the Soviet Union and its poor monolithic English education practices.[iii] However, the level of Ukrainian IT specialists is known to be rated high and is not at all represented by the rest of  the population.[iv]
  • IT market statistics: There are 9 IT hotspots in Ukraine: Kharkiv, Kyiv, Lviv, Dnipro, Odesa, Sumy, Chernivtsi, Cherkasy, Lutsk; its 2019 IT market growth has been between 15% and 20% and is predicted to continue its annual 20% growth rate in the upcoming years.

Poland

  • IT proficiency: The country produced 15,000+ IT graduates, which is 23,000 fewer than Ukraine, which has resulted in a lack of skilled employees in software development.[v]
  • English proficiency: Poland fares way better than most other Eastern European countries in this respect—it ranks 13, with a high English Proficiency according to EF EPI.
  • IT market statistics: There are 7 IT hotspots and the IT market growth has only been 5.9%,  10-15 percentage points smaller than Ukraine’s.

Bulgaria

  • IT proficiency: Bulgaria had 3,500+ IT graduates—just 9% of Ukraine’s IT graduates. It is not surprising that many IT companies have lamented the lack of IT talent in Bulgaria.
  • English proficiency: Bulgarians rank 25th, which gives it a moderate rating.
  • IT market statistics: Just like in Poland, there are only 7 IT hotspots, while the IT market growth has been 17%, similar to Ukraine’s impressive growth.

Romania

  • IT proficiency: 32,500 IT graduates were registered in Romania this year, which is still 6,000 fewer than in Ukraine.
  • English proficiency: Romania fares better than Ukraine in terms of English proficiency—it takes place 16 in the EF EPI ranking.
  • IT market statistics: Higher English proficiency does not let Romania supersede its Eastern neighbour in IT market statistics, however, as there are only 80,000 IT specialists currently employed in outsourcing companies – compared to Ukraine’s 165,000. And there are 4 IT hotspots and Romania’s IT market growth is estimated at a stable 15% increase.

What learnings can we take from these comparisons?

There is good reason why Eastern Europe, especially Ukraine, is considered a modern haven for software development, and it is not just the cheap price of labor. The two most critical factors we’ve learned from our own experience having operated in the Eastern European software market for over 5 years are:

  • Competence Availability

Competence in IT technology and communication, in which both the Ukrainian IT professionals excels in – thanks to its fantastic educational system and longstanding history of IT development.

Running a tech business is a race to the finish line, and most scale ups don’t have the time to wait 6 months until their eye-wateringly expensive recruiter finds them a local developer. The features have to be developed now, the App brought into the market now and the investors convinced there is a solid team supporting the customer’s demands now.

Thanks to Ukraine’s rapid IT market growth, the supply keeps up with the demand.

And Ukraine keeps on growing.

By the year 2020, there are expected to be 200,000 IT professionals in Ukraine, while its value of outsourcing software will have exceeded $2,5 billion.[vii] Ukraine surely continues growing and affirming its status as the strongest source of talent in Eastern Europe. The Ukrainian government and private investors are actively finding ways to foster the IT industry further to ensure it can continue to keep up with the steady demand of Western customer. The new generation sees the participation in the IT hype as a lucrative opportunity to:

  • be intellectually challenged
  • get access to Western business networks
  • live a comfortable life that most Ukrainians in traditional professional aren’t so easily able to enjoy

We see when compared to other Eastern European countries Ukraine presents in fact one of the most logical choices. At ivy tech we have experienced this first hand – as have our clients. Check out some of our beautiful client testimonials on our website or talk to us directly by setting up a consulting session with our London-based management to discover if a remote team may be complimenting your current business structure.

We’d love to chat to you about your development needs. 

[i] “The Birth of Europe’s First Electronic Computer | History of Computing in Ukraine.” n.d. Accessed October 2, 2019. http://en.uacomputing.com/stories/mesm/.
[ii] “EF EPI 2018 – EF English Proficiency Index.” n.d. Accessed October 3, 2019. /wwen/epi/.
[iii] “Lewis – FOREIGN AND SECOND LANGUAGE TEACHING IN THE USSR.Pdf.” n.d. Accessed October   3, 2019.

[iv] “Software Development in Europe.” 2018. Interventure (blog). December 7, 2018. https://www.interventure.info/blog/software-development-in-europe/.
[v] “Why You Really Need to Try Outsourcing Software Development to Eastern Europe.” 2018. Daxx Software Development Teams. March 1, 2018, https://www.daxx.com/blog/development-trends/software-development-outsourcing-in-eastern-europe.
[vi] “Ukraine_it.Pdf.” n.d. Accessed October 4, 2019a. http://www.uadn.net/files/ukraine_it.pdf.
[vii] “Why You Really Need to Try Outsourcing Software Development to Eastern Europe.” 2018. Daxx Software Development Teams. March 1, 2018. https://www.daxx.com/blog/development-trends/software-development-outsourcing-in-eastern-europe.