1. IT OUTSOURCING
CLUSTER IN UKRAINE
Alicia Dereza
Olga Dyachenko

2. Ukraine And IT
• 4th place after USA, India and Russia
• Largest cluster in Europe
• More than 2 000 companies
• More than 25 000 IT specialists
• One of the Highest salaries in Ukraine
• Best conditions for work in Ukraine
• The only cluster that didn’t suffer during
crisis

3. Basic facts about UKRAINE
Location Eastern Europe
Borders Russia, Belarus,
Poland, Hungary,
Slovakia, Romania
Territory 603628 km2
Population 44854 thousand people
Language Ukrainian, Russian
Capital Kyiv
Independence 24 August 1991

4. Economic performance of
Ukraine
• 56th economy in the world
• GDP per capita $ 7600
• Growth of GDP 5.2%
• Debt 93.5% of GDP
• Average salary 2500 hryvnias/month
• Unemployment rate 8.5%
• Inflation rate 3.7%
• Export-oriented (50% of GDP)
• Budget revenues $ 53.07 billion
expenditures $59.58 billion

5. Composition of Ukraine’s
economy
• Mineral resources
• Fuel and energy complex
• Metallurgy complex: export-oriented
ferrous and non-ferrous metallurgy
• Machine building complex: export
oriented heavy and agricultural machine
building, instrument-making and machine-tool
construction
• Chemical complex
• Agriculture: farmer lands – 42.4 mill
hectares (70% of the territory)

6. Business environment of
Ukraine
Proximity to both the EU and Russia
Large quantity of consumers
Membership in WTO
Free-trade agreement with EU

7. Main barriers of business
development in Ukraine

8. Key barriers for business

9. Profile of the cluster
Government
Consumers – 70% American or European customers
Educational
institutions
Legislatures
InstitutionsBusiness
Regional state
administration
Local
government
Core of the cluster:
National and
international IT
outsourcing
companies
Telecommunications
Professional
Associations and
Communities
Telecom,
Internet, Rent
Internet Retail Banks Auto industry Etc

13. Number of companies and
IT Specialists in the cluster
IT Outsourcing
Companies
IT Specialists

14. Economic performance of
the cluster
The volume of provided IT outsourcing Services from 2003-2011

15. Snapshot
• IT outsourcing cluster growth rate 2011–20 %
• More than 2 000 IT outsourcing companies
• 25 000+ specialists involved in the IT
outsourcing cluster
• Ukraine has more than 800 universities and
colleges
• Majority of Ukrainian IT specialists (est. 70 %)
work for American or European customers
• A number of government initiatives introduced to
support and promote the Ukrainian IT cluster

16. Why IT
cluster in
Ukraine?

17. Factor (input) conditions
• Inherited IT achievements
• Large pool of highly-skilled specialists,
top-notch technology talent
• Strong educational system
• Lower costs, including labor cost
• Good command of English language
• Travelling to Ukraine conditions

18. Context for strategy and
rivalry
VAT relief for IT sector
High competition
Good conditions for start up
– Still low governmental support
– Low country development

19. Related and supportive
industries
• Professional Associations and
Communities
– Ukrainian Hi-Tech Initiative
– IT Ukraine
– DOU
• Telecom Infrastructure
• Cost of Internet
• Office Space

20. Demand conditions

21. TOP Clients of Ukrainian
Software Companies

22. Recommendations for
the country
• Improve business environment of the
country: taxation, permits, inspections, regulation of
export, etc.
• Develop education system, first of all -
secondary education.
• Workforce development and, in particular,
the increase of computer literacy.
• The establishment of industry clusters in
the field of information technology.
• Promote the development of innovative
research in IT industry.

23. Recommendations for
the cluster
1. To develop human resources, increase
the level of competence in the field of IT
for all categories of labor resources in the
region:
• Conducting foresight studies to identify the
most important and promising areas of the
cluster.
• Development of the joint educational projects
by companies and universities in accordance
with the priorities of the IT cluster.

24. Recommendations for
the cluster
2. To improve cooperation between the
participants of all regions where IT clusters
were established :
• Create a database of products and services of
the IT cluster, distribution business offers of
the cluster’s members among the potential
customers
• Build a strong brand for the Ukrainian IT
cluster.
• To attract new companies to participate in the
working group of the IT cluster.

25. Recommendations for
the cluster
3. To improve the infrastructure in the
cluster:
• To create science parks and business
incubators to search for new talents and
development of new innovative companies in
the field of IT.
• To develop technical infrastructure to provide
broadband Internet access throughout the
area, the introduction of high-frequency mobile
connection to the Internet and digital
television.

26. Thank you
for your attention!