Kharkiv_IT_Research_report

1. Kharkiv IT Research Partners:

2. Macroeconomic modeling of Kharkiv IT industry Sept 2018

3. LLC «PricewaterhouseCoopers Advisory» (PwC) was engaged by Kharkiv IT Cluster (Client) in order to provide consulting support in development of mathematical model to quantify performance of Kharkiv IT industry and forecasting of its development in future based on macroeconomic assumptions. This report summarizes our vision of macroeconomic modeling results of Kharkiv IT industry performance and results of a comparative analysis of various scenarios in the development of the industry as well as independent assessment of the impact of taxation on the level of tax revenues to the state and local budgets of Ukraine from IT business. We understand that the results of our work will be owned by the Client and will be used exclusively for informational purposes. PwC does not accept any liability and responsibility for the actions of a third party other than the Client as a result of the use of this report without the written consent of the PwC. Copies of this record may be owned exclusively by the employees of the Client. It is understood that PwC bears no responsibility to any other recipients of the report. This report may not be copied (partially or in whole) by any unauthorized person without the written consent. Regards, LLC «PricewaterhouseCoopers Advisory» Disclaimer

4. Aims of the project: To assess the performance of the IT industry in the Kharkiv region, forecast market growth and evaluate the current/future impact of the industry on tax revenues of state and local budgets, identify key strengths of the region and areas for future development. Methodology: The research was based on the data provided by 36 IT-companies (7,225 specialists) located in the region during the survey conducted jointly by Kharkiv IT Cluster and PwC; Kharkiv IT-cluster organized a survey among HR-specialists in the IT industry in order to identify the sizes of more than 400 active IT-companies in the Kharkiv region. The gathered data was reconciled by PwC with information obtained during the survey and open data sources; More than 20 information requests were sent to Kharkiv bureau of statistics and local educational establishments by PwC in order to assess key trends and developments; PwC has conducted more than 10 interviews with TOP-management of Kharkiv IT-companies in order to verify the hypothesis for macroeconomic modeling and identify key trends in the industry; PwC macroeconomic model of the Ukrainian IT industry was updated to reflect the realities of the Kharkiv region and used as the main instrument for the purposes of this engagement. PwC was engaged by the Kharkiv IT-cluster to develop a regional IT industry assessment model and report back their key findings on regional positioning. - - - - -

5. Industry overview1

6. Kharkiv KyivLviv Dnipro Odesa 53 000 29% 16 000 9% 25 000 14% 15 000 8% 10 000 5% As of April 2018, there were 25,000 specialists in IT industry of Kharkiv region, 76% of them were related to computer programming Estimated number and density of IT-specialists1 (by region), Apr’2018 Ths. persons / % from total number in Ukraine IT-specialists per 1 000 of population: - persons; - % from total number in Ukraine. >3.50 1.50 - 2.49 <1.49 2.50 - 3.49 x x% 75,7% 10,6% 11,6% 1,4% 0,3% 0,3% 66,3% 17,3% 12,2% 2,9% 0,8% 0,5% KHARKIV UKRAINE Computer programming (62.01) Data processing (63.11) Other activity related to IT (62.09) Web portals (63.12) Informatization consulting (62.02) Management of computer equipment (62.03) Source: State register of legal entities and individual entrepreneurs, Kharkiv IT Cluster, Portrait of IT-specialist 2018 - DOU, PwC analysis For the purposes of the research, "IT-specialists" are defined as specialists engaged by IT-companies (i.e. freelancers and specialists in non-IT companies were not included)

7. More than half of IT-companies located in Kharkiv region fall into «extra small» category with less than 20 persons engaged Number and size of IT-companies in the Kharkiv region 445 Active IT-companies located in the region (PwC analysis) Total number of registered IT-companies located in the region (Ministry of Justice)871 Extra large 601+ Large 201 - 600 Medium 81 - 200 Small 21 - 80 Extra Small up to 20 5 22 43 105 270 Source: Kharkiv IT Cluster, Ministry of Justice, PwC analysis Based on information gathered during IT-companies survey, industry analysis and cross-check conducted by PwC and Kharkiv IT Cluster

8. Europe 25%incl. Ukraine: 5% Asia 3% Middle East 5% Australia & Oceania 2% North America 65% Sources: Kharkiv IT-companies, PwC analysis. Due to lack of effective demand for IT services/products inside Ukraine, the majority of companies are export-oriented – in 2017 more than 95% of total sales were related to foreign clients Sales geography of Kharkiv IT-companies % of total sales, 2017

9. USA 64,7% Sources: Kharkiv IT-companies, PwC analysis. The United States of America is the largest export market for Kharkiv IT companies – in 2017 it accounted for ca. 65% of total sales Sales geography in North America, % of total sales, 2017 Canada 0,7% 88% 8% 3% 1% IT services IT Sales structure in North America % of sales, 2017 Products IT To IT business Infrastructure Related

10. Sweden, Denmark, and the UK are the most popular export markets in Europe for Kharkiv IT-companies – ca. 13% of total sales in 2017 Sales structure in Europe % of sales, 2017 91% 5% 2% 2% 53% 2% 1% 44% EUROPE UKRAINE IT services IT products IT infrastructure Related to IT business Sweden Ukraine UK Denmark Germany Hungary Norway Poland Belarus RomaniaSlovenia Switzerland Italy France Spain Greece France Italy Sweden Ukraine Denmark UK Hungary Germany Netherlands Switzerland 9% 5.2% 1.9% 1.9% 1.6% 1.4% 1.3% 1.2% 0.9% 0.6% Other<1% Sources: Kharkiv IT-companies, PwC analysis. Sales geography in Europe, % of total sales, 2017

11. Among all global markets Israel is the third most popular export destination for Kharkiv IT-companies — ca. 4% of total sales in 2017 Sales geography in Asia and Oceania, % of total sales, 2017 Israel Kazakhstan Uzbekistan Armenia Cyprus UAE Kuwait Vietnam Japan Australia Fiji Israel Australia 4.26% 1.41% Kazakhstan Uzbekistan Vietnam 0.85% 0.43% 0.21% UAE Cyprus Fiji 0.14% 0.12% 0.10% Other<0.1% Structure of sales % of region’s sales 88% 7% 5% IT services IT products Related to IT business Sources: Kharkiv IT-companies, PwC analysis.

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13. NIX Solutions NIX Solutions delivers expert-level software engineering services. Since 1994, we have been helping clients achieve target business outcomes using technology. Who We Are One of the IT industry pioneers in Ukraine; 1600 expert engineers are based in the Kharkiv headquarters; 90% of NIX Solutions’ tech leaders and managers have risen from the company ranks; Global client base spread over 20 countries; Client profile ranges from start-ups to the major internationals with billions in turnover; Over 3000 completed projects with the per-project effort reaching 320 man-years / 645,000 man-hours; Project profile ranges from small mobile apps to highly complex corporate business systems; Absolute majority of first-time deals have resulted in repeat projects; Cultivates young talent via IT-related educational programs across the country; NIX Solutions’ capital asset is a team of united, like-minded professionals with expertise in every IT domain. 10 Facts about NIX Solutions We deliver software solutions to empower our clients. What We Do JAVA ENTERPRISE .NET SHAREPOINT IOS ANDROID Technology Expertise LAMP UX HTML5 EXTJS UNITY C++ AMAZON AWS SCRUM AGILE SAFE Full-cycle software development; Rapid engagement; Established process engineering; Technical versatility; World class IT talent. Key Features Healthcare; Pharmaceuticals; E-learning; Insurance; Internet & social networks; ERP; Manufacturing. Industry Expertise - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

14. Gennadiy Bukshevalov Development Center Director SoftServe The United States of America and Europe are the main sales markets.Many Kharkiv companies also cooperate with Israel,since the country has a well-developed high-tech industry and a plenty of startups.In order to embody such business ideas,you need highly qualified specialists that can be offered by Kharkiv region. There is a demand for IT services in Ukraine.Until 2014,there were companies specialised in providing services at the CIS markets.The current situation is more complicated,as IT services’pegging to US exchange rate has made them fairly expensive for the domestic economy.» Eduard Rubin Director Telesens International Among European clients I can name Germany.As a large market this country is currently generating a truly good deal of orders.Additionally,England and the Northern European countries with their well-developed marketing and business demonstrate a significant demand.However,France and Italy are not the major clients.The situation is caused by two factors,namely,language barrier and rigorous work standards. When it comes to the domestic market,the development of a plenty of Ukrainian companies stopped after 2014,consequently,it has negatively affected their need in high-tech services.Improvement of the current economic situation in the country will result in new plants and enterprises and so in the increased demand for IT services.» The opinions above are personal and may not reflect companies’ opinion on this matter. 13 « «

15. The opinions above are personal and may not reflect companies’ opinion on this matter. 13 There is a demand at the domestic market,though very low one.The lack of domestic market is a constraining factor for the industry in the entire Ukraine,and especially in Kharkiv.Currently, technological innovations are not needed in Ukraine,as the low market purchase power impedes these technological innovations from constituting a competitive advantage. Although technological innovations are really developed in some specific,niche market segments.E-commerce,for instance.Generally,at this point of time,there is no observable trend that local businesses are ready to allocate their long-term investments into technologies and innovations.This is exactly the reason why the majority of technological products developed in Ukraine are focused on the markets and target audience of the Golden Billion countries.» Oleksandr Medovoi Founder, President & CEO AltexSoft « Victor Shalnyev CEO NIX Solutions It is hard to distinguish one specialisation of Kharkiv IT companies,since they present a large variety of IT industry specialisations at the market.However,outsourcing and outstaffing can be highlighted among all types of the services.It is hard to identify an exact ratio between these two types of the services,but recently companies are trying to avoid outstaffing,as it generates less margin and less interesting for work.IT-specialists are more motivated to address holistic tasks resulting in a tangible product or output.» «

16. As for industries operated and technologies used, Kharkiv IT industry is multi-vector and does not have a distinct specialization Top-15 industries operated % of total sales, 2017 16,2% Entertainment 14,2% Medicine & Healthcare 11,6% Insurance 7,9% Media & Advertising 7,5% Education & Learning 7,4% Reatil & Wholesale 5% Banking & Finance 4,7% Telecommunications 4,7% Sports & Leisure 3,1% E-commerce 2,8% Travel 2% Transportation & Logistics 1% Automotive 0,8% Construction 0,5% Manufacturing Sources: Kharkiv IT-companies, PwC analysis.

17. Kharkiv IT companies are specialised in a very broad range of technologies and industries.Our specialists are able to solve absolutely different holistic tasks,which is,probably,an advantage of our region.In total,the companies,from healthcare to game developers,are presented in the market. Speaking about the buzzword technologies,even the blockchain is presented in Kharkiv.I.e.,we have everything in the market. The situation represents a serious advantage for business,as if keen to start-up something new, we will most probably find a required specialist even in a fairly narrow domain area.» Sergiy Shkurupiy Director Software Engineering EPAM Kharkiv specialists possess a very broad spectrum of technical skills.It is wrong to say that,for instance, our software engineers have the only command of Java and C++.However,there are not so many ‘product’ companies,and e-commerce and software integration companies in Kharkiv.Still,this deviation is small and the situation at Kharkiv market is similar to other regions of Ukraine.» The opinions above are personal and may not reflect companies’ opinion on this matter. Gennadiy Bukshevalov Development Center Director SoftServe « «

18. Remuneration of IT-specialists in Kharkiv region is slightly lower than country’s average, which is driven by higher level of salaries in Kyiv Median income of IT-specialists1 (by function), Dec’2017, USD Source: Kharkiv IT-companies, State statistics agency, PwC analysis Average income $1 800 $265 Median income of IT-specialists $2 258 $313 UKRAINE 1.821 1,401 1,800 1,471 1,790 2,5632,565 2,088 2,7002,732 UA KH UA KH UA KH UA KH UA KH Project manager BA Developer QA Other (incl.design) KHARKIV REGION

19. Pavlo Obod Founder of Sloboda Studio The amount of remuneration is increasing in Kharkiv and can reach up to USD 3,000 -4,000. The total costs have increased significantly due to rent payments,leave allowances,costs for administrative staff.The above can bring to the risk that for client it would be easier to hire its domestic specialists,since they speak local language,reside in relevant time zone and have a better insight of local market.» Value of human capital in IT industry is growing faster than the value of IT services.Following the trend,IT companies have to develop their business by incorporating new competencies: vertical, horizontal and cross-functional; and with the help of these competencies,bring additional value to the end client in the form of a service.In other words,many IT companies already provide not a baseline of IT services to their client,but are able with their extra competencies to develop tailored solutions based on the client’s business needs.Therefore,service business remains competitive at external market even despite the growth of its specialists’remuneration.»ёOleksandr Medovoi Founder, President & CEO AltexSoft The opinions above are personal and may not reflect companies’ opinion on this matter. « « Current level of remuneration for Kharkiv IT specialists is driven by the market.This trend has a negative effect on start-ups.At the early stages,it is burdensome for a start-up not supported by outside funding to pay a market remuneration for developers.Therefore,they face a problem to engage highly qualified specialists,since such specialists have high expectations for remuneration. At the same time,such level of remuneration is a market one for companies engaged in outsourcing,and consequently,it is a fair one.»Maksym Makarenko Founder, CEO Docsify «

20. After the drastic decrease in 2015, the volume of foreign direct investments in Information and Telecom has remained almost at the same level over the past 3 years Inflow of FDI1 in the Kharkiv region, Mln. USD Inflow of FDI in Information and Telecom sector, Mln. USD 1,632.9 2,216.3 1,726.0 1,569.5 13.2 17.9 6.6 6.4 658.2 6.2 SHARE OF INFORMATION AND TELECOM IN TOTAL FDI 0.6% 1.0% 0.4% 0.4% 0.9% 2013 2014 2015 2016 2017 -70% Total FDI in the Kharkiv region FDI in Information and Telecom 3.5 2.4 7.2 10.5 3.7 3.7 1.1 3.0 6.6 13.2 17.9 2.4 1.1 3.2 6.4 2.1 1.0 3.1 6.2 2.1 SHARE OF INFORMATION AND TELECOM IN TOTAL FDI 18.4% 20.8% 46.0% 49.5% 49.0% 2013 2014 2015 2016 2017 Telecom Computer programming, consulting and related activities Other2 Source: Kharkiv bureau of statistics. 1 - Foreign direct investments; 2 - Category includes Publishing; Movies and TV films production, sound recording; Radio and TV broadcasting; Provision of information services.

21. According to the macroeconomic model developed by PwC, the IT industry of the Kharkiv region will double in size over the next eight years and reach 1.85 billion USD by 2025 Kharkiv IT market volume, Mln USD Share of IT industry in Kharkiv region as a percentage of GRP: Source: PwC macroeconomic model of Kharkiv IT industry, Kharkiv bureau of statistics, World Economic Outlook. 2015 2018 2022 2025 0 500 1,000 1,500 2,000 9.0% 11.5% 11.7% 11.0% 11.4% 12.3% 9.1% 11.5% 13.3% 8.3% Positive Basic Negative Key model driver: The number of senior developers, particularly share of senior solution architects among total IT specialists, is a key driver of the PwC macroeconomic model. Model scenarios comparison (market volume in 2018/2022/2025 mln USD) Positive (926 / 1,360 / 1,848) The share of senior solution architects among total IT specialists will have increased by 2 times until 2025. Basic (912 / 1,257 / 1,604): The share of senior solution architects among total IT specialists is fixed at the current level and will remain unchanged during the forecast period until 2025. Negative (869 / 1,010 / 1,163): All senior solution architects will have left the country by 2025. The share of senior developers will decline almost 3 times, while the share of testers will grow by the same amount.

22. The IT industry of Kharkiv region generated ca. 5 billion UAH of tax revenues in 2017 by approximate estimates – of which 43% to local budgets Tax revenues1 to Local and State budgets from Kharkiv IT industry, Bln UAH 2015 1,432 2,122 2,812 844 1,458 2,937 2,276 3,581 4,937 2016 2017 37% 41% 44% % of tax revenues paid to local budgets + 201720162015 201720162015 757 1,236 1,536 168 268 308 14 20 26 237 481 498 317 640 553 3,401 1,589 1,680 2,345 1,000 1,262 559 904 1,519 132 83 56 VAT Army tax Personal tax Corporate tax Army tax PE tax Personal tax Total tax revenues Direct taxes Indirect taxes & Mediated effects 1 - Amount of tax revenues includes direct (Corporate income tax, Personal income tax, Single tax for PEs, Army tax) and indirect (VAT) taxes paid by IT and related industries

23. Taking into account potential of IT industry’s growth, amount of tax revenues to State and local budgets may almost triple by 2025 to reach 14.6 billion UAH Tax revenues1 to Local and State budgets from Kharkiv IT industry, Bln UAH Positive scenario Under favorable market conditions, the estimated tax revenues from the IT industry to state and local budgets will amount to ca. 14,630 billion UAH in 2025. +8.9% compared to the basic scenario. Negative scenario Adverse market conditions will lead to a decline in the amount of estimated tax revenues to state and local budgets up to ca. 11,100 million UAH in 2025. -17.4% compared to the basic scenario. 2015 1,432 2,276 2016 2017 2018 2022 2025 844 2,122 3,581 1,458 2,812 4,937 2,124 3,382 5,974 2,592 5,462 9,769 4,306 7,375 13,437 6,062 State budget Local budget FORECAST x2.7 Basic scenario 1 - Amount of tax revenues includes direct (Corporate income tax, Personal income tax, Single tax for PEs, Army tax) and indirect (VAT) taxes paid by IT and related industries

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26. 2017 2020* average working space per 1 IT-specialist average investment into 1 IT-specialist’s work place 199 ths. m2 Most of available commercial real estate in Kharkiv does not meet requirements of IT-companies, and this issue potentially can become a bottleneck for the industry’s growth Key indicators of demand for commercial real estate of commercial real estate are occupied by IT-companies 8 m2 10 USD 1,242 USD average cost of rent of 1 m2 in Kharkiv of additional commercial real-estate will be needed to meet industry’s growth 59 ths. m2 > Sources: Kharkiv IT-companies, PwC macroeconomic model of Kharkiv IT industry. * - Estimated according to “basic” scenario of PwC macroeconomic model of Kharkiv IT industry

27. Export orientation and fast-pace industry’s growth generate the need for large number of business trips both within Ukraine and abroad Structure of business trips, % of total trips, 2017 38% 62% Ukraine 145 USD average cost of a business trip Abroad 2 045 USD average cost of a business trip 80% Train 9% Plane 5% Bus6% Car 25% Business class 75% Economy class 20% Company-own 80% Employee-own 97% direct fights in UkraineSources: Kharkiv IT-companies, PwC analysis.

28. More than half of business trips in 2017 were made with transfers due to lack of direct flights from Kharkiv airport Most popular connection airports, % of trips abroad by plane, 2017 Kyiv Amsterdam Paris Munich Istanbul Warsaw Minsk Other Sources: Kharkiv IT-companies, PwC analysis. 24 Paris Munich Amsterdam Warsaw Minsk Kyiv Istanbul 59% 13% 10% 5% 4% 3% 2% 4% Types of transport for abroad trips, % of total trips abroad, 2017 93% Plane 5% Train 1% Bus 1% Car Types of flights 63% Indirect 37% Direct

29. Not all Kharkiv companies are satisfied with the number of direct flights from Kharkiv Airport.The situation has improved,when a new direct flight to Istanbul was introduced,as Istanbul Airport is a sufficiently large air hub.Still,such a trip takes a lot of time and is not very comfortable.Though it is acceptable for our specialists,it is uneasy for clients to get to Kharkiv.Flights to Vienna,Frankfurt and London would improve the situation significantly.» Despite the possibility of a remote business,we need efficient transport connection with the whole world. There are options now,but they need to be improved enabling easy flights to America and European countries. Certainly,Kyiv is not so far,though fewer transfers to the destination will make client’s trip more convenient. Easier access to Kharkiv will guarantee more visits,so we can introduce the city to people.Moreover,there is no sufficient transport communication within the country.For instance,Ukrainian head office of our company is located in Lviv,and there is no direct flight from Kharkiv to Lviv.Such situation substantially complicates domestic business trips for our employees.» International connection in Kharkiv is not so developed as the one in Kyiv,though Kharkiv Airport is definitely good.With a transfer in Warsaw or Minsk Airport,it is actually possible to get wherever you want,but there is always a certain discomfort in such trips. For our clients and partners,it is still not easy to reach Kharkiv.To avoid extra inconveniences for clients and partners,I usually arrange business meetings in Kyiv.» Oleksandr Podolskiy Director Insoft Gennadiy Bukshevalov Development Center Director SoftServe Oleksandr Kolb CEO Promodo « « « The opinions above are personal and may not reflect companies’ opinion on this matter.

30. 2 Evaluation of business environment

31. Development of IT-business environment and improvement of comfort of living can be outlined as key trends in the region Kharkiv IT industry Kharkiv City Emergence of specialized financial, legal and other relevant service providers focused on provision of professional services to IT industry; Absence of high entry barriers for new market players that results in increasing number of new IT-companies on the market; Active development of IT-community in the city accompanied by large number of specialized events (conferences, hackathons, start-up battles etc.); Establishment of long-term cooperation between educational institutions and major regional IT-companies; Significant improvement of technical expertise and professionalism of local IT-specialists; Further development of soft skills (incl. knowledge of English) among IT-specialists that resulted in better development of business relations with English-speaking countries. Stabilization of political situation that results in better willingness of foreign partners to visit Kharkiv for business purposes; Decrease in migration of specialists to other countries or other regions of Ukraine; Increase in migration from other Ukrainian regions due to comfortable living conditions and job availability; Improvement of the city infrastructure: - Launch of new air-carriers in Kharkiv airport; - Construction of new residential complexes; - Gradual improvement of pavement quality in the city; - Launch of single e-ticket for public transport. Sources: Interviews with TOP-management of Kharkiv IT-companies, PwC analysis. Key trends in the recent years — — — — — — — — — —

32. Despite the fact that proximity to the conflict zone appears to be the main threat to the region, Kharkiv IT industry remains attractive for investors Sources: Interviews with TOP-management of Kharkiv IT companies, PwC analysis. SWOT-analysis of Kharkiv IT industry STRENGTHS Large number of an educational institution for IT-specialists which creates a strong talent pool for potential recruitment; Sustained IT industry’s growth that results in numerous positions for both IT and non-IT specialists; Good balance between IT-specialist’s income and average spendings; Developed city infrastructure that creates comfortable living conditions (public transport, residential real estate, green zones etc.); Established cooperation between IT-business and local educational institutions. Lack of promotion of Kharkiv as an IT-oriented region; Industry’s demand for IT specialists outpaces its supply; Insufficient number of direct flights from Kharkiv airport; Deficit of high-quality commercial real estate; Inconsistency of educational programs in local universities with industry requirements for IT-specialists; Uncertainty with tax regime for private entrepreneurs; Location of the region close to the zone of military conflict. Further development of a dialogue between IT community and local/state authorities, in order to lobby industry’s interests (set its development as one of the priorities for the region); Further cooperation of IT-business and educational institutions; Promotion of Kharkiv as one of the TOP IT-cities of Ukraine in order to attract clients, investors and human capital; Attraction of investors to continue developing IT sphere in the region; Attraction of developers to construct high-quality commercial real estate in Kharkiv. Escalation of the military conflict in the East of Ukraine; Socio-economic and political instability at local or state level; Deficit of qualified IT specialists due to industry’s fast-paced growth; Launch of unfavorable tax regime for private entrepreneurs; Intensified competition for human resources, which will result in significant growth in compensation level and loss of competitiveness by smaller IT-companies. — WEAKNESSES OPPORTUNITIES THREATS — — — — — — — — — — — — — — — — — — — — —

33. Majority of TOP-managers of Kharkiv IT-companies evaluated general business conditions in Kharkiv region as favourable Evaluation of business conditions in Kharkiv Supportive and friendly IT-community, fair competition on the market; Large number of educational institutions, which creates a strong talent pool for recruitment; Establishment of Kharkiv IT Cluster, which helped to start a dialogue with local authorities to promote industry’s interests; Improved relationships with local law-enforcement authorities. TOP-management opinion Evaluate business conditions in Kharkiv, compared to other Ukrainian regions.» Unfavourable Areas for development Suggestions for improvement Lack of business education for IT and non-IT specialists in the region; Insufficient promotion of Kharkiv as one of the TOP IT-cities of Ukraine; Imperfect legislation prevents registration of «product-oriented» IT companies in Ukraine; Threat of sharp increase of tax rates for PE brings uncertainty to industry’s future. Sources: Interviews with TOP-management of Kharkiv IT-companies Invitation of foreign experts in order to share their knowledge and bring expertise of business administration; Promotion of Kharkiv as IT-oriented city through participation in specialized events on international level; Cooperation with state authorities in order to improve legislation regarding intellectual property rights protection; Transition of IT industry out of the «grey zone» through gradual increase of the tax rates for PE and creation of technological parks with preferential tax regimes. Positive trends — — — — — — — — > — — — — 73% 27% Favourable Highly favourable 0% «

34. At the moment most of the respondents see deficit of high-quality commercial real estate and lack of direct flights from Kharkiv airport as the main factors limiting further growth Sources: Interviews with TOP-management of Kharkiv IT-companies Positive trends TOP-management opinion «Kharkiv City infrastructure is...» Suggestions for improvement Attraction of developers in order to construct high-quality real estate (class A, B+); Attraction of air carriers to arrange more direct flights to popular hub airports (Amsterdam, Paris, Munich, Frankfurt, Vien, London) and increase frequency of flights to large Ukrainian cities (Kyiv, Lviv, Odesa); Cooperation with local authorities to improve public transport. One of the best City infrastructure in Ukraine; Gradual improvement of road surface quality; Availability of City’s underground, which allows to travel around the city in a quick and comfortable way; Availability of green zones and entertainment infrastructure; Availability of affordable residential real estate; Launch of low-cost air-carriers from Kharkiv airport. Deficit of high-quality commercial real estate (A, B+ class); Lack of direct flights to the majority of European countries and the USA; Public transport fleet requires renovation; Low-quality transport infrastructure in the region outside of the Kharkiv city. Areas for development Evaluation of Kharkiv City infrastructure > — — — — — — — — — — — — — Well-developed Requires 91% 9% Minor changes Requires Serious changes 0%

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37. Sergiy Shkurupiy Director Software Engineering EPAM Kharkiv’s situation with commercial real estate is drastically different from the Kyiv’s one. Here, like in Lviv, currently, there is a lack of big floors and rent is not always compliant with the proposed quality. Even power supply, air-conditioning and other systems of new business centres very often do not meet requirements of IT companies. Since 2008, only two business centres were built in Kharkiv. Other buildings of earlier periods actually have no free spaces. That is why many IT companies rent premises in former design and planning institutes. Certainly, such offices have an entire set of peculiarities and issues in their use. In order to address the situation, the city is currently considering drafts of modernisation and reconstruction of former plant facilities into offices. The ideas, hopefully, will be implemented in the future.» Yevhen Birenbaum HR Manager Gameloft Pavlo Obod Founder of Sloboda Studio Lack of office premises and related office infrastructure is a problem for Kharkiv IT companies, in particular, for those with more than 400 employees. For instance, some companies cannot find an office big enough for all their personnel so they have to rent 2-3 offices. For the recent years, the city does not construct really high-quality real estate in good districts. Even those new buildings available now are not completely modern. At the same time, rent and office service is slightly overpriced in Kharkiv market and not completely compliant with the quality. The problem can be solved by the development of a separate land plot with high-quality business centres and excellent adjacent infrastructure, including transportation one». There is a competition for office spaces in Kharkiv. The average growth of IT companies by 20% annually creates a need for the equal growth of office real estate (especially with the floor space of 500-1,000 sq.m.). However, it does not happen. Regarding requirements for commercial real estate, companies of more than 10 employees want to work in a spacious offices with modern refurbishment and good air-conditioning. Office location also plays a significant role. Many companies strive to rent an office in the downtown or Pavlovo Pole areas, as other locations cannot be suitable for their employees due to the lack of a transportation infrastructure. Consequently, close metro stations and parking lots should be taking into account at the construction of new business centers.» « The opinions above are personal and may not reflect companies’ opinion on this matter. « «

38. The majority of the TOP-managers of Kharkiv IT-companies agree that education in the region requires serious changes Evaluation of IT-graduates’ training Positive trends One of the largest number of IT-graduates in Ukraine; Provision of excellent training for students on fundamentals of mathematics and IT; Numerous opportunities for internships for IT-students provided by local companies; Introduction of own courses, lectures and computer classes in universities by major IT-companies; Readiness of universities for cooperation with IT-business. Knowledges of IT-specialists graduated from Kharkiv universities...» Areas for development Suggestions for improvement Inconsistency of educational programs in local universities with industry requirements for IT-specialists; Majority of educational institutions are bureaucratic and not ready for significant changes; Students of 3d-4th grade early start their careers and are not interested in further education in universities; Lecturers lack business experience and motivation to make educational programs more practical. Sources: Interviews with TOP-management of Kharkiv IT-companies Proactivity of IT-business in reforming of educational system on a state level; Cooperation with authorities in order to pass the law on private-public partnership and facilitate cooperation between universities and business; Introduction of new specialized courses in the universities led by industry experts; Provision of internships in IT-companies for lecturers to gain practical experience in the industry. > — — — — — — — — — — — — — Exceeds employers’ expectations 73% 27% Is below employers’ expectations and requires serious changes Matches employers’ expectations 0% « TOP-management opinion

39. Oleksandr Medovoi Founder, President & CEO AltexSoft Eduard Rubin Director Telesens International Today, companies have an opportunity to prepare its own staff on the basis of regional Universities. Every large or middle-size university has 1-2 and in some cases up to ten labs of IT-companies where we select students for our on-the-job training. It solves the staffing problem at the regional, but not the national level. Furthermore, to support the fast growth of the industry, IT companies have to prepare managerial staff. Lack of a reputable business school in the region or non-technical education focused on technology management does not allow us to do it and is a constraining factor for the further industry growth. There are a plenty of good Universities in Kharkiv, but it is a merit of separate individuals, heads of departments. Hard and high-quality work of a professor motivates students to learn hard and, as a result, to become professionals. Generally, the educational system starting from secondary school is still a Soviet one. It has not been adjusted to meet the modern market requirements. For instance, we still do not have an e-learning in Universities, and professors are poorly motivated, they do not compete with each other even within the same University. Therefore, upon the graduation from the secondary school, young people having intention to work in IT sphere leave abroad to obtain a higher education and often do not return. The improved educational system will ensure that future specialists will remain in Kharkiv. Nevertheless, I do not see among today’s new educational draft laws those that can really change the situation for the better. Victor Shalnyev CEO NIX Solutions Ltd The market demand is constantly growing and the number of good students is diminishing, since neither students nor professor are sufficiently motivated to study and teach well, and the market is ready to consume even ‘raw materials’. Time needed to train a newcomer until he/she starts to generate revenues for the company is growing. We try to influence the situation on our own, though it is only a temporary solution of the problem. Only modifications in the educational system and demographic policy will be able to improve the situation. The opinions above are personal and may not reflect companies’ opinion on this matter.

40. Another concern of the respondents, is whether the supply of qualified IT-specialists will be sufficient to support rapid IT industry's growth Evaluation of demand on human capital General comments Due to fast-pace industry’s growth the deficit of qualified professionals may increase; Some companies mitigate this issue by opening additional offices in small Ukrainian towns, where there is an excess of qualified professionals who demand lower compensation. General comments Remuneration of IT-specialists is expected to grow further, which is in line with worldwide IT industry trends; Increasing production costs do not affect IT-service companies heavily, because such business compete mostly on quality of provided services, rather than their price; Abovementioned trend affects product companies and startups because it is difficult to hire staff below the market average at the initial stage of a company’s development when business is sensitive to extra costs. Sources: Interviews with TOP-management of Kharkiv IT-companies Number of employees in the company in the following year will...» «Remuneration of IT-specialists in the following year will.» TOP-management opinion Decrease 73% 27% Increase Not change 0% Decrease 100% 0% Increase Not change 0% «

41. 3Human capital overview

42. According to the data provided by Kharkiv IT-companies, majority of IT-specialists are in the age below 30, while women represent 29% of the local IT-community Characteristics of Kharkiv IT-specialists: 29% Women 71% Men Age structure 2% 60% 33% 4% 1% <21 21-30 31-40 41-50 >50 60% 7% 3% 7% 23% 30% Senior 44% Middle 26% Junior Division structure Grade structure Developers Project managers BA QA Other Source: Kharkiv IT-companies, PwC analysis.

43. Students in Kharkiv have good opportunities to gain practical experience — they account for ca. 20% of total recruited IT-specialists Recruited specialists % of total recruited IT-specialists Specialists left companies % of total IT-specialists, that left companies Left abroad % of total IT specialists, that left abroad Source: Kharkiv IT-companies, PwC analysis. With previous experience Without previous experience 63% 37% With IT experience With non-IT experience Students51% 12% Other (incl. graduates) 20% 17% 51% Left to another company 18% 12% 6% 4% 49% 23% 20% 3% 5% Left abroad Left IT Transferred to freelance Started own IT-business Better life abroad Higher salary Family issues Client requirements Other

44. In order to enhance specialists’ knowledge up to the worldwide industry standards IT-companies invest in both internal and external educational programs and initiatives. Kharkiv IT specialists’ level of education % of total specialists Master's degree (excl. MBA) 72.2% Bachelor's degree No higher education Doctorate degree 24.9% 2.1% 0.6% MBA 0.2% Availability of courses for internal personnel % of total companies of Kharkiv IT-companies provide courses for internal personnel of them also provide courses for external public Structure of companies’ educational investments % of total educational investments 54.8% 23.7% 8.1% 7.0% 5.9% 0.5% Source: Kharkiv IT-companies, PwC analysis. 72% 48% Company- owned courses Kharkiv universities Kharkiv schools Conferences Workshops Online courses

45. Lack of qualified graduates will remain an issue for Kharkiv IT industry in the nearest future Estimated number of IT-graduates1 in Kharkiv by specialization, 2016 – 2022, Persons Automation & ComputerizationInformation technology Estimated demand2 for IT-specialists vs number of IT-graduates in Kharkiv, 2016 – 2022, Persons Sources: Kharkiv universities, Kharkiv IT-companies, PwC macroeconomic model of Kharkiv IT industry 1 - Number does not include graduates from local colleges, which accounted for 309 persons in 2017 2 - Estimated according to “positive” scenario of PwC macroeconomic model of Kharkiv IT industry Applied mathematics 435 251 701 713 200 955 1,064 1,517 386 67 1,331 1,571 196 1,729 561 2,367 77 44 1,313 412 1,805 80 2,017 950 3,026 59 2016 2017 2018 2019 2020 2021 2022 FORECAST 2016 2017 2018 2019 2020 2021 2022 500 0 1,000 1,500 2,000 2,500 3,000 3,500 4,000 701 955 1,517 1,571 2,367 1,805 3,026 2,3952,243 2,075 2,349 3,329 3,688 2,509 Number of IT-graduatesIndustry demand for IT-specialists FORECAST

46. Top-3 Universities according to opinions of Kharkiv IT-companies Kharkiv National University of Radio Electronics National Aerospace University «Kharkiv Aviation Institute» The National Technical University «Kharkiv Polytechnic Institute» © 2018 PricewaterhouseCoopers LLC. All rights reserved. In this document, “PwC” refers to PricewatrhouseCoopers LLC which is a member firm PricewaterhouseCoopers International Limited, each of which is a separate legal entity.

47. Technology & solution consulting partner altexsoft.com

48. AltexSoft AltexSoft is Technology & Solution Consulting company. We co-build technology products to help companies accelerate growth, achieving this by leveraging our technical, process and domain expertise and access to the best price-for-value Eastern European engineers. Over 100 US-based and 200 worldwide businesses have chosen us as their Technology Consulting Partner. Who We Are 11 years in business; 200+ employees; 100+ clients from the USA and 200+ clients worldwide; Projects ranging from 0.5 to 80 man-years of scope; 88% customer referral rate; Dedicated Travel Technology Practice; Organizers of largest Ukrainian conference on machine learning, data science and artificial intelligence - AI Ukraine; 5% attrition rate; 3 R&D centers in Ukraine: Kharkiv, Lviv and Kremenchuk; US Sales Office in San Diego, CA and Atlanta, GA. 10 Facts about AltexSoft We help implement digital transformation projects to transform the business model, implement new customer interactions, build modern infrastructure and create data-driven organization. What We Do Microsoft.NET; Fullstack Javascript and MEAN stack; LAMP stack; Native iOS; Android and Cross- Platform Mobile; Cloud Technologies. Key Technologies Travel & Hospitality; Aviation & Transportation; Finance; eCommerce & Retail; Health Care; Marketing; Media. Industry Expertise - - - - - - - - - - - - - - - - - - - - - - - Software Product Development; Product Management; Dedicated/Hybrid Team; UX/UI Consulting; UX Design; Conversion Rate Optimization; Company Services Data Science; Machine Learning; Technology Consulting; Enterprise Architecture; Performance Improvements; Cloud Consulting. - USA - Canada - UK - Netherlands - Australia - Germany - Switzerland - Israel Countries We Work With altexsoft.com 1 877 777 9097 sales@altexsoft.com - - - - - - - - - - - -

49. Profile Of IT Specialist In Kharkiv Region Sept 2018

50. Study Design Employment Profile of IT Companies; IT Job Titles; Working experience; Working Conditions; Job Search Priorities. Education and Personal Development Education; Improvement of IT Specialist Skills; Knowledge of foreign languages; Knowledge of programming languages. Accommodation Living conditions; Own Dwelling. Migrations Moving to Kharkiv; Possible moving from Kharkiv to another city; Possible Moving From Kharkiv To A Foreign Country. Banking services and savings Criteria For Choosing A Bank; Choosing A Bank; Savings and Investments. Structure Of The Report Lifestyle Traveling; Nutrition at work; Medicine; Hobby; Pets; Transport. Incomes and expenses Salary; Average monthly salary; Average monthly income; Expenses; IT Specialist Profile Portret; Family.

51. Goals To provide socio-demographic information about IT specialists; To present the amount of wages, incomes, expenses, and savings; To show the amount of money spent on individual items of expenditure; To explore immigration/emigration to the city; to determine the causes of these phenomena. Method Online survey. Kharkiv and Kharkiv Region. Geography Of Research Study design - - - -

52. Employment

53. Employment IT Company Profile: The vast majority of IT professionals work in companies with a core business of Information Technologies. Specialization Economic Activity Of The Enterprise 83% IT Other 17% Outsourcing Service Product Outstaffing Startup Difficult to answer 39% 24% 16% 15% 1% 5%

54. 5% 1% 1% 1% 1% 1% 1% 2% 2% 2% 2% 2% 3% 3% 3% 5% 6% 7% 9% 43% Другое Solution architect CEO Database administrator System administrator Sales Manager Support Business analyst Development Manager Data Scientist DevOps Engineer UI-UX specialist / Designer Marketing Manager Tech lead Automation QA HR Manager Team lead Project manager Manual QA Software engineer IT Job Titles The largest share of IT specialists are developers Employment Other

55. Work Experience In IT Primary activity Years of experience in the IT sector 41% 1-2 years 29% 3-5 years 19% 6-10 years 10+ years 10% 1% Less than 1 year Junior Middle Senior 1,9 4,4 7,5 Years of experience according to the skill level In the IT field generally In one company In the current position At the last workplace 4,8 3,1 2,9 2,1 Average work experience: 4.8 years

56. Working conditions: Most Kharkiv IT specialists work full-time in offices. Every 4th IT specialist has their own project on the planning stage. Occupation Workplace Own Project Primary activity 94% In the office 2% OtherAt home 4% 98% Full-time 2% Part-time 59% 25% 12% 4% Don’t have an own project Is planned Startup/ IT project Startup/ non-IT project THE PROJECT IS OR IS PLANNED >

57. 1% 1% 3% 5% 6% 9% 11% 11% 12% 14% 24% 31% 42% 48% 78% Другое Размер компании Тип компании (аутсорсинг и… Имидж/репутация компании Наличие соц. пакета Стиль руководства Реализация своих… Расположение офиса График работы Комфортный офис, рабочие… Перспектива карьерного роста Профессиональный рост Атмосфера в коллективе Интересные проекты/задачи Хороший доход Job Search Priorities: IT specialists consider a comfortable income, interesting projects as well as the atmosphere in the team to be the major priorities when searching for a job. Comfortable income Interesting projects / tasks The atmosphere in the team Professional growth Career prospects Comfortable office,working conditions Schedule Office location Realization of abilities Executive management style Social package Company Image / Reputation Company Type (Outsourcing,etc.) Company scale Other Employment

58. Ideas To Results artjoker.net

59. Artjoker Artjoker — is a software provider for Loan Management, Risk Analytics and Ecommerce Who We Are 120+ employees in the team Established in 2006 We are trusted by international brands Over 300 projects Offices in Kharkov, Los Angeles and Zurich TOP-10 IT employer in Kharkiv region Part of international technical conferences in Europe and the USA Facts About Artjoker We help startups and enterprise to accelerate their time-to-market and digital growth What We Do - Lending - Real Estate - Travel - Wealth management Industry Expertise - - - - - - - - USA - Switzerland - Germany - Holland - UK - Ukraine Countries We Work With www.artjoker.net info@artjoker.net +380673537000 We developed software for TOP-3 Ukrainian consumer credit market company We developed software for TOP-3 Israeli market rental and sale of real estate We created unique software development approach – Artjoker Method® We value long-term partnership and strategic plans Why Choose Us - Risk analytics - Ecommerce - HealthCare - - - -

60. Education and Personal Development

61. 4% 2% 3% 4% 4% 6% 14% 27% 36% Другое Среднее Несколько… Базовое… Несколько… Аспирант, PhD Базовое… Полное… Полное… 71% 46% 31% 26% 22% 2% 1% Самообразование: литература, статьи и т.д. В своем высшем учебном заведении Онлайн-курсы Стажировка в ИТ-компании Платные специализированные курсы В процессе работы Другое Professional Knowledge SourcesDegree Level Education: About 95% of specialists have a graduate degree. Most people practice self-education to gain professional knowledge. Education and Personal Development Graduate Industry-oriented degree Graduate Non-core degree Junior Industry-oriented Degree Ph.D. Student Multiple Educational Degrees (non-core) Junior Non-core Degree Multiple Educational Degrees (including field-oriented) Secondary Education Other Self-education: literature, articles, etc. At the university Online courses Internship in IT companies Paid specialized courses In progress Other

62. How much time per week is devoted to self-development in IT? Ways to improve IT skills Improvement IT Specialist Skills: On average, IT specialists devote 7.4 hours per week to self-development. Mostly, specialists improve their skills in the working process and by studying professional literature. Education and Personal Development 8% None at all 33% Up to 5 hours 32% 5-9 hours 20% 10-15 hours More than 15 hours 7% 3% 8% 19% 35% 41% 71% 83% Занятия с репетитором Профильное высшее… Специализированные курсы Онлайн курсы / тренинги Профильные события… Профессиональная… В процессе работыDuring the working process Studying professional literature Conferences, meetings, etc. Online courses/ trainings Specialized courses Industry higher education Tutoring

63. 98% 13% 11% 6% 4% 2% 1% Английский Немецкий Французский Польский Испанский Итальянский Китайский Knowledge of foreign languages Knowledge of foreign languages Education and Personal Development English German French Polish Spanish Italian Chinese Don’t know Planning/began to study Elementary level Pre-intermediate level Intermediate level Upper-intermediate level Advanced level 1% 4% 11% 33% 38% 13% — 74% 13% 7% 2% 2% 1% 1% 83% 6% 7% 2% 2% — — English German French 84% OF IT SPECIALISTS HAVE INTERMEDIATE AND HIGHER LEVELS OF ENGLISH

64. 55% 48% 33% 27% 27% 20% 18% 9% 8% 7% 5% 4% 6% SQ L JavaS cript Java C+ + C# Py th on N ode. js An droi d/ K otli n PH P Ru by O bj ective -C / Swif t G ola ng Другие Knowledge of programming languages Programming Language: Basic and higher level SQL and JavaScript are the most popular languages Education and Personal Development SQL JavaScript Java C ++ C # Python Node.js Android / Kotlin PHP Ruby Objective-C / Swift Golang Other 37 8 22 22 11 39 12 23 17 9 57 10 21 6 7 66 7 19 6 3 65 8 13 5 9 64 16 11 4 5 73 9 9 6 3 Don’t know Planning/began to study Junior level Middle level Senior level SQL,% JavaScrip,% Java,% C++,% C#,% Python,% Node.js,%

65. First Reliable Engineering for Insurance 4tifier.com

66. Fortifier Fortifier IT company provides first reliable IT engineering services for Insurance industry using Reliability Standard. Our goal is to improve customer’s business through digital business processes transformation and innovative IT solutions implementation. We are a trusted technical partner for each company we work with. Who We Are Located in one of the largest IT-hubs of Europe; Proven expert in Insurance industry; Use the Reliability Standard based on global practices; Large enough for full-cycle development; Projects are from enterprise solutions to MVP development; Technical partner for a list of StartUps; Tech stack: Web, Mobile, AI, ML, Big Data, IoT; Reliable technical partner for each customer; Sponsor of Insurance conferences in the USA; A member of Kharkiv IT Cluster. 10 Facts About Fortifier Improve Insurance industry through reliable digital transformation. What We Do Web: Java, Python, PHP, JavaScript; Mobile: iOS, Android, Cross-platform; Technology Expertise - - - - - - - - - - - - Reliability Standard We implemented the Reliability Standard for software development, customer relationships and team management based on the best world-wide practices. Individual Approach We provide customized solution development with a wide variety of pricing models and types of partnership. High level of Security We guarantee a set of technologies and techniques for data and product security. Each of them allows us to prevent any possible rush-breaking outcomes. Why Choose Us - Insurance - InsurTech - Enterprise - StartUps Industries www.4tifier.com sales@4tifier.com +1 650-772-4259 Artificial Intelligence, Big Data, ML, IoT; UI/UX Design. - - - - -

67. Incomes and expenses

68. Wage Form Salary Satisfaction with Salary Most specialists receive a salary in the form of a constant monthly rate. Almost one-third have pointed that they draw a constant monthly rate with bonuses/rewards Incomes and expenses 22% 41% 15% 14% 8% 59% Constant monthly rate Constant monthly rate with bonuses/rewards 30% Time Rate 10% 1% Other Fully Satisfied Rather satisfied than not As satisfied as not Rather dissatisfied Totally dissatisfied

69. $ 600 $1 500 $3 000 $1 400 Average monthly salary (net) $2 200 $1 500 $1 200 $1 200 By type of a company they work in IT specialists who work in outstaffing companies receive the highest wages. Average salary 9% 16% 8% 7% 29% 14% 9% 6% Salary level, $ Incomes and expenses Outstaffing Outsourcing Product Service Junior Middle Senior Median 4 000+ 3 001 –4 000 2 001 –3 000 1 001 –2 000 801 –1 000 601 –800 401 –600 201 –400

70. 16% 15% 10% 9% 6% 5% 4% 4% 4% 3% 2% 2% 2% 2% 2% 2% 1% 1% 1% 6% $ 235 $ 224 $ 147 $ 141 $ 85 $ 76 $ 63 $ 63 $ 58 $ 47 $ 37 $ 32 $ 31 $ 31 $ 29 $ 24 $ 21 $ 20 $ 19 $ 88 Expenses Monthly expenses by types Incomes and expenses Savings Food Rental Property Loan/Debt Payment Clothing/Style Travels Taxes Hotels, cafes, restaurants Housing maintenance Cinema, theater, concerts, etc. Alcohol and tobacco Public transport Childcare Service of private vehicles Medicine/Healthcare Self-education Telecommunication services Sport Education Other expenses

71. Accommodation

72. 3% 20% 26% 34% 17%40% 33% 12% 7% 3% 2% 1% 2% Собственная квартира Аренда жилья (дом/ квартира) Живут у близких людей Собственный частный дом Аренда комнаты Живут в общежитии Другое Затрудняюсь ответить Home-ownership Living Place Housing Conditions Rental duration Accommodation Most IT specialists own homes. On average, those who live in temporary apartments have been renting these for 2.8 years 60% Yes No 40% Own flat Rental flat/house Live with relatives Own house Rental room Live in a dormitory Other Difficult to answer Less than 1 year 1-3 years 3-5 years 5-10 years 10+ years

73. 32% 26% 16% 6% 6% 3% 2% 2% 2% 6% Наследство Покупка за свои средства Подарили Долг у близких людей Покупка за счет продажи имуещества Кредит/ заем в банке Рассрочка Обмен Другое Трудно сказать 1% 0% 1% 1% 1% 1% 10% 0% 2% 9% 9% 11% 11% 9% 18% 14% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2001 2002 2003 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 21% 16% 10% 21% 26% до 20 000 21000 - 30000 31000 - 40000 41000 - 50000 51 000 и выше The means of acquisition Dwelling cost in US dollars Year of the last purchase of a dwelling Most IT specialists own 1 dwelling. Predominantly, these are inherited or bought for own money. A large proportion of dwellings was purchased in two recent years (8 month) Accommodation Own Dwelling The number of objects 80% 1 17% 2 3% 3 Inheritance Purchase by own money Gifted Purchase on money borrowed from relatives/friends After selling an old flat/house Bank loan Installment loan Exchange Other Difficult to answer 51,000 and more 41,000 - 50,000 31,000 - 40,000 21,000 - 30,000 Less than 20,000

74. Fintech Engineering for Financial Wellness insart.com

75. INSART INSART is a software development partner for Fintech & financial companies. We are headquartered in the heart of the financial world, New York, and our R&D labs are located in Ukraine, famous for its highly skilled software engineers. We believe in well-structured teams, processes, and architecture mixed with the strong financial expertise to deliver exceptional results. Who We Are Key clients are Fintechs in the US and Europe; The team of 60+ Fintech engineering professionals; Provides end-to-end financial literacy training to its employees; Established in 1993 as a spinoff of the major tech university in Ukraine; Re-launched and went international in 2008; Headquartered in New York, USA since 2015; R&D labs in Kharkiv and Kyiv, Ukraine; Runs PayTech & WealthTech Clubs, communities of Fintech experts and companies; CEO has done 70+ research interviews with Fintech founders & executives; Runs Smart Club in Ukraine, the meetup for software engineers. 10 Facts About INSART We help Fintech & financial companies build great Fintech products. What We Do Java, Spring, Hibernate, JBoss, Tomcat, WebLogic; React, Angular, Vue, Backbone, Redux, Rest; Docker, Kubernetes, Jenkins, Git, Bitbucket; PostgreSQL, MySQL, Oracle, MS SQL Server; MongoDB, Couchbase, Neo4j; Spark, Hadoop, Hazelcast, Kafka, Elasticsearch; Amazon AWS, Heroku. Technology Expertise - - - - - - - - - - We have multiple success stories from building software products from scratch to helping our clients scale their software engineering operations; Our specific focus on Fintech & financial services differentiates us from other more generic software development providers; We train engineers in capital markets, financial planning, wealth management, payments, banking, insurance, lending and other areas of finance; Our key values: Customers, Team, Professionalism, Learning, and Engagement. Why Choose Us - USA - UK - Sweden - Switzerland - Germany www.insart.com sales@insart.com +1-(917)-475-0008 - - - - - - - WealthTech & Robo-advisors; PayTech & Payment Processing; Lending & Fundraising; Trading Platforms & Algorithms; Insurance & InsurTech; Security & Fraud Detection; Blockchain & Cryptocurrencies; Big Data Analytics. Industry Expertise Countries We Work With - - - - - - - - Fintech software products engineering; Java backends, APIs, integrations, multilayering & microservices; Software re-engineering & re-architecting; ETL & big data processing, data analytics. Company Services - - - - - - - -

76. Migrations

77. Duration of residence in the city Moving to Kharkiv Reason for moving Since birth Since childhood More than 10 years 5-10 years 3-5 years 1-3 years Less than 1 year 65% 14% 6% 6% 2% 2% 2% 1% 1% 1% 48% 3% 18% 18% 7% 4% 2% Migrations About half of specialists have been living in the city since birth or since childhood. The main reason for moving was to receive a quality education Getting a quality education More development opportunities Favorable job offer Developed infrastructure Moving spouse home ATO Adventure/change of scenery Family member's relocated career Good living conditions Difficult to answer

78. Banking services and savings

79. Criteria For Choosing A Bank 51% 48% 37% 18% 16% 15% 15% 10% 9% 9% 7% 5% 5% 4% 3% 2% The availability of online services/applications, as well as bank reliability and automated payment processes, are the most important criteria when choosing a bank Banking services and savings Online Services / Application Bank reliability Automated payment processes Service Level Universality and Availability Bank Reputation and Image Services Bank Rating Usage by most friends Bank's history Reliable user data protection Customer Reviews Bank location Exchange Rates and Сurrency Сonditions Online consultation Other

80. 5% 3% 1% 2% 3% 3% 4% 4% 4% 4% 5% 11% 12% 15% 35% 76% PrivatBank and Ukrsibbank are the most popular banks among IT specialists Choosing a bank Banking services and savings PrivatBank Ukrsibbank PUMB Monobank Alfa-Bank Kredobank Raiffeisen Bank Aval Oschadbank OTP Bank Credit Agricole Bank Ukrgasbank Ukrsotsbank ProCredit Bank Ukreximbank Other Don’t use

81. 6% 3% 4% 5% 5% 14% 19% 29% 37% 44%64% 63% 42% 35% 33% 33% 18% 15% 2% 1% 3% The primary objective of savings Savings and Investments What do you invest in? Banking services and savings Do you accumulate/save money? 75% Yes No 25% Buying real estate Traveling Buying transport Consumer electronics Hobby/entertainment Investments Personal education Children's education Home repair Old-Age Insurance Other Foreign currency Bank deposits Real Estate Difficult to answer Cryptocurrency Precious metals Own business Funds Shareholding Other Most IT specialists accumulate money for buying real estate or for traveling. IT specialists prefer to invest in foreign currency or bank deposits

82. We help ecommerce businesses grow promodo.com

83. Promodo Promodo is a leading international performance agency that helps marketing teams of medium and large ecommerce companies to increase sales and customer loyalty. Our team of 160+ experts helps clients from 60 countries to promote businesses in developed and emerging markets. Promodo employs its cutting-edge proprietary software and know-how to deliver better results. Who We Are - 14 years of experience in digital marketing; - 5 offices around the world; - 1,500 successfully completed projects; - 160+ in-house experts; - 50+ Google AdWords and Analytics certificats; - 11 organized conferences; - 3 completed social projects. Facts about Promodo We help companies develop businesses through online marketing solutions. What We Do - Google AdWords; - Google Analytics; - Bing Ads; - Facebook Ads; - Promodo API; Technology Expertise - Online stores and retail businesses; - Marketplaces/сlassifieds; - Price comparison websites; - Online travel agencies. Industry Expertise - Pay-per-click ads (AdWords, Facebook, Bing); - Search Engines Marketing; Company Services - Ukraine - UK - USA - Kazakhstan - Turkey - Germany - Georgia - Lithuania and more Countries We Work With www.promodo.com contact@promodo.com +44 (0) 20 313 766 81 We employ cutting-edge proprietary software; Our team can quickly launch and scale a marketing campaign; Track record of success in the promotion of ecommerce and destination marketing projects; Our team takes a deeper dive into the client's niche to provide the best marketing solution; We go extra mile, strive to exceed the client’s expectations. Why Choose Us - Social Media Marketing; - UX/UI design; - Email Marketing. - - - - -

84. Lifestyle

85. Traveling

86. Have you ever been abroad? Traveling 18% of IT specialists have never been abroad. European and Asian countries are the most popular for foreign trips Lifestyle 82% Yes No 18% Long-distance trips for the last 12 months 15 17 34 14 20 48 23 19 4 5 78 16 3 1 2 89 10 - - 1 93 5 - - 2 98 1 - - 1 Didn't travel 1 trip 2-3 trips 4-5 trips 5+ trips Ukraine,% Europe,% Asia,% Africa % North America,% South America,% Australia and Oceania,% 98 1 - - 1

87. Nutrition at work

88. 21% 17% 11% 15% 36% 35% 7% 7% 5% 5% 3% 2% Nutrition at work Most experts prefer to have lunch cooked at home or visit restaurants or cafes. Mostly, companies provide free food to their employees in the ratio of 50/50 or completely. What do you usually eat during your lunch break at work? Does your company provide free food? Lifestyle Pre-cooked Meals Meals in restaurants,cafes,etc. Meals provided by the company Food from store Snacks,sandwiches,fast food,etc. Make-ahead quick meals Have lunch at home Other 35%50/50 No Yes Only snacks/fruits Other

89. Medicine

90. Did you use medical services throughout a year? Medicine Type of Medical Institution Corporate Health Insurance One-third of IT specialists did not attend medical institutions for therapeutic or prophylactic purposes 33% Yes,for therapeutic purposes No 27% 11% Yes,for prophylactic purposes 28% Yes,for therapeutic and prophylactic purposes Lifestyle 27% I have it 73% I don’t have it 71% Private 29% Public Almost every 3rd IT specialist has corporate health insurance

91. Hobby

92. 56% 49% 46% 29% 24% 18% 18% 10% 9% 9% 7% 6% 6% 5% 3% 3% 1% 6% Hobby Types of hobby More than half of the specialists pointed out IT self-development as a hobby. Sport and reading are slightly less popular types of activities. Lifestyle IT self-development Sport Reading Tourism Social networks and blogs Pets Cooking Care for indoor plants Photography Needlework Auto and Moto Vehicles Computer and video games Hunting and fishing Collecting Choreography / Dancing Music Painting Other 88% Yes No 12% Do you have a hobby?

93. Enterprise-level software solutions for telecommunications telesens.co.uk

94. Telesens Telesens is a global provider of enterprise level software products and solutions for telecom and other business domains. We have been operating since 1998 and serving customers in more than twenty countries worldwide. The headquarters of the company is situated in London with the development centre in Ukraine. Who We Are Over 20 years of experience with IT projects; 15+ own enterprise software products for telecom operators; 14 telecoms in 8 countries are among our clients; 130 million transactions per day processed with our software; 600+ successful IT projects; 100+ qualified software IT-professionals. Facts about Telesens Enterprise software solutions. Professionally! What We Do - Java; - Oracle; - DWH; - Reporting; - Mobile Security; - Cryptography; Technology Expertise - Telecommunications; - Security; - Healthcare; - Finance; - Utility; - Public Administration. Industry Expertise - Consulting; - Implementation and Support; - Software Development; - Dedicated IT-resources; - Training Courses. Company Services - USA - Canada - Germany - Great Britain - Ukraine - Kazakhstan - Uzbekistan - Belarus - Turkey - Israel - Finland - Sweden - Moldova and others Countries We Work With telesens.co.uk info@telesens.co.uk +38 (057) 719-94-71 - ISO-certified business processes; - Competence in modern technologies and tools; - Practical experience with complex multisite projects; - Close cooperation with technical universities. Why Choose Us - - - - - - - Test automation; - Cloud; - High availability and clustering; - Blockchain.

95. Pets

96. 58% 36% 21% 19% 10% 6% 4% 2% Pets Almost every second IT specialist has pets. Cats are the most common among them. Lifestyle 24% One pet Don’t have 36% 23% Several 17% Planning to adopt Cat Dog Fishes Rodents Birds Amphibians and reptiles Exotic Other animals

97. Transport

98. 61% 36% 36% 6% 3% 3% How, and for how long, do you usually take to get to work? 32 24 27 29 17 17 Transport Own vehicles 33% 15% 2% 1% 1% 54% Lifestyle By public transport By car In foot By bicycle By taxi Other min A car (ICE) A bicycle A motorbike A car (Hybrid) A car (Electric) Don't have own vehicles Transport modes Everyday/Weekdays Several days a week A few days a month A few days in half a year A few days a year Once a year and rarely Don't use Walking,% Public transport, % Private car, % Taxi,% Bicycle,% Train/Suburban train, % 71 20 5 1 - - 3 49 14 13 9 4 2 9 24 10 5 1 - - 59 6 10 36 29 8 1 10 2 6 9 5 7 8 63 1 1 8 29 17 12 32 Usually,IT specialists walk, use public transport or private car. Most of them get to work by public transport.The average travel time is 23 minutes.

99. IT Specialist Profile

100. Portrait (Description) IT Specialist Profile Most IT specialists live in Kharkiv. Slightly more than a quarter of them are women. Location 96% Kharkiv Kharkiv Region 4% 5% 35% 31% 17% 9% 2% 1% 18-20 21-25 26-30 31-35 36-40 41-45 46 и более The Age Structure 46+

101. Family

102. 38% 38% 18% 4% 3% Income levels Family 2% 5% 23% 41% 22% 7% Marital status IT Specialist Profile Sometimes there is not enough money for food Enough money for food Enough money for food and clothes Enough money for major appliances Enough money for everything except real estate No financial problems; can buy a flat if necessary Single Married Civilly married Divorced Let’s just say it’s complicated

103. 22% 36% 20% 12% 9% 2% Family Parental status IT Specialist Profile 7,8 6,1 6,2 2,0 Children's age 1st child 2nd 3rd 4th 26% 12% 3% 1% 56% 2% 1 child 2 3 4 No children Refused to answer Who knows? Number of family members 1 (Alone) 2 3 4 5 5+

104. Companies which participated in the survey. Not IT Cluster members. KHARKIV

105. Kharkiv IT Cluster members

106. Universities-partners of Kharkiv IT Cluster

107. DEVELOPING THE KHARKIV IT-ECOSYSTEM. FORMING AN INNOVATIVE ENVIRONMENT. it-kharkiv.com Design by Present Perfect Studio

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