The Ukrainian IT sector is going through difficult times, but despite this, positive trends are noticeable. After falling to a four-year low in January, exports of IT services are gradually recovering, and the development of defense technologies is also gaining momentum. However, general uncertainty is increasingly complicating the rapid growth of the industry.
The Ukrainian IT sector is going through difficult times, but despite this, positive trends are noticeable. After falling to a four-year low in January, exports of IT services are gradually recovering, and the development of defense technologies is also gaining momentum. However, general uncertainty is increasingly complicating the rapid growth of the industry.
What is the situation in Ukrainian IT and under what conditions stabilization and growth are possible — discussed by the participants of the discussion «What awaits the Ukrainian IT market.» The event brought together analysts, economists, representatives of the public and IT business, in particular, the CEO of the NIX IT team, Viktor Shalnev, joined the event.
Economists note that the growth in the share of IT in services exports is rather a consequence of the decline in other industries.
Volodymyr Landa, senior economist at the Center for Economic Strategy: «The share of IT in the export of services has already grown to over 42%. But this is more likely not the merit of the industry, but a decline in other areas. For example, Ukraine has actually ceased to be a transit state, in particular, we do not transport Russian gas to European countries. Where there is really noticeable growth, it is startups. Investments in them more than doubled last year and exceeded $462 million. However, these are still not the figures of the same 2021.»
This indicates the need for diversification and finding new growth points.
The IT labor market is experiencing a period of stagnation, although the number of vacancies is gradually increasing compared to 2022-2023. The duration of the job search has increased significantly (more than 2 months compared to 1-3 weeks earlier), which forces specialists to lower their salary expectations. At the same time, companies are facing difficulties in finding qualified personnel (Middle / Senior level). Almost 80% of Ukrainian IT companies cannot find employees who meet their requirements, and the main problem here is called insufficient professional and «soft» skills. In conditions of limited resources, companies prefer to hire experienced specialists, which creates barriers for beginners in IT.
Victor Shalnev, CEO of NIX, emphasized the change in the hiring model:
«Previously, we recruited hundreds of students every three months and trained them to the required level. That was our model. But now that’s impossible. We hire people based on the specific requirements and limitations of the project and the customer. If there used to be a broad search, today it’s a very careful selection. Yes, there are more vacancies, but for middles and seniors. And the layer of juniors remains. There are a lot of them, they are trying to find a job. However, in this flurry of resumes, you just have to catch the golden nuggets.»
The influence of global trends is also felt in Ukraine: technological «giants» have massively laid off thousands of developers over the past two years. Up to 80% of product and service IT companies in the world have resorted to staff reductions in the past 24 months.
Oleksandr Medovy, President of AltexSoft and Chairman of the Supervisory Board of Kharkiv IT Cluster, highlights the following reasons:
«We have a systemic economic situation that is in some ways worse than in 2022. That is, there are problems not only because of the war. First, there are negative economic trends, such as the same US tariffs or the risks of recession. And secondly, artificial intelligence is changing the rules of the game. And how we don’t even understand it yet! It’s not about skills. It’s just that what used to take 100 people a year will soon be done by 25 specialists in just four months. The only thing is: we in Ukraine don’t feel it that way yet, because we have a certain lag, but that will also happen.»
The war remains the main challenge for Ukrainian IT. Foreign clients limit cooperation with local developers due to security risks, and cases of project suspension due to the mobilization of key specialists have already become quite common. The ability to reserve 50% of employees does not fully solve the problem of attracting new contracts. As a result, this encourages customers to increasingly require part of the team to be located in safer regions (European countries, the USA). Along with this, the war stimulates the growth of certain IT areas, in particular miltech. There is an increase in the share of projects for the development of intelligent systems for the defense industry — from drones to complex analytical complexes.
Victor Shalnev, CEO of NIX, points out a fundamentally important point for strengthening the industry and further growth:
«We contact and sponsor many miltech startups, including in our team’s native Kharkiv, but their development is hampered by the lack of sufficient government orders and restrictions on product exports. So many cool projects move, for example, to Lithuania. There they grow and, oddly enough, import products to Ukraine. This needs to change. I see how the state is increasing orders, but the domestic milltech market needs more government orders. This will be a real boost for the growth of this industry.»
Ukrainian IT professionals are known all over the world for their innovations and ability to take an unconventional approach to solving complex technical problems. Despite numerous difficulties, our specialists still offer competitive solutions on the international IT services market today and even more — they form new trends in miltech. So what all experts agree on: the potential of Ukrainian IT is inexhaustible and is still waiting for its time to fully present itself on the international arena.
