Ukraine's Software Development Market in Wartime

Article by JobTerix IN DESIGN & ILLUSTRATION - 8/24/2022

Ukraine has long been a hub for software development and IT outsourcing. The country has a strong IT workforce with some of the best software developers in the world. As of 2021, there were 285K IT professionals living in Ukraine. The software development market was thriving and revenues were up. Ukraine was considered the outsourcing capital of the world.

How that market looks today is a bit different. Not because software developers are no longer in demand, quite the opposite is true. IT professionals are in-demand everywhere businesses exist in the world. The market was hit hard by the recent invasion of Russian troops in the eastern Luhansk region of Ukraine on February 24, 2022.

There has been much speculation on how the market will be affected and whether or not it can recover its losses. Russia and Ukraine have had a long-standing conflict since 2014 when Russia annexed the Crimean Peninsula. The events that unfolded on February 24th, dealt another blow to Ukraine’s economy as well as its landscape.

How are Software Developers Being Affected by the War?

A small percentage of IT professionals (an estimated 20%) have moved with their families to neighboring countries and applied for jobs outside of the market. Nordcurrent, a Lithuanian game developer with offices in Ukraine offered to relocate some developers to its headquarters in Lithuania. So far, 25 Ukrainian developers and their families have been relocated.

But not all Ukrainian developers want to leave the country. At least 80% of software developers and engineers stayed in Ukraine and are still working full time. 60% had to leave their homes for a safer location, and some are very close to the frontline, working with air-raid sirens going off around them.

They keep working any way they can to support their families living abroad, to support their countrymen fighting the war, and to keep Ukraine's economy going in the face of adversity. A survey of 7,000 IT professionals (living in Ukraine, and abroad) revealed that 80% of them want to move back home when the war ends. The Ukrainian resiliency is strong.

Changes to the Market

Currently, the Ukrainian software development market is going through a period of transition. Several companies have been forced to close down, relocate or switch to a different business model due to the ongoing war, while others are finding new ways to adapt. The majority of these companies are located in Kyiv, Donetsk, and Lugansk - areas that have been affected by fighting between Ukrainian government troops and pro-Russian separatists.

Although Ukraine has been facing an economic crisis for many years, the country is still a highly competitive market for software development. This is due to its highly-skilled workforce, low labor costs, and proximity to Europe. They also have allies that are helping them with humanitarian aid so they can keep working.

The market has been steadily increasing over the past few years. According to Ukraine’s Ministry of Economy, the revenue from selling software and services in Ukraine reached UAH 2.6 billion (about $100 million) in 2017. That number rose to 5.4 billion in 2020 and is expected to rise to 8.4 billion by 2025.

Ukraine has a strong pool of tech talent. Ukraine has more than 1,000 universities and colleges offering computer science degrees, according to the Ministry of Education and Science. And there are many more educational options for those who want to learn programming languages like JavaScript or Python. Universities give out more than 20,000 tech degrees per year. This knowledge and talent are what keep the Ukrainian software development market in wartime going strong.

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