Business News, 11/10/2018

Research Reveals Kharkiv IT Industry Volume is Second in Ukraine

October 9, over 400 participants gathered to hear the Kharkiv IT research findings. The research project, ordered by Kharkiv IT Cluster, was conducted by PricewaterhouseCoopers and IRS-group. To obtain a detailed picture, researchers questioned 7,225 IT-specialists from 36 Kharkiv companies.

The research project aimed to assess the performance of the IT industry in the Kharkiv region, forecast market growth and evaluate the impact of the industry on tax revenues of state and local budgets, identify key strengths of the region and areas for future development.

As of April 2018, according to the PricewaterhouseCoopers macroeconomic model, there were 25,000 specialists in IT industry of Kharkiv region, 76 percent of them were related to computer programming. Thus, Kharkiv accounts for 14 percent of all IT specialists in Ukraine and makes the second largest IT location in the country, right after the capital Kyiv.

Also, PricewaterhouseCoopers assessed the number of active IT companies in the region to be 445, five of them employing more than 601 people. Besides, there are 22 large companies with the workers’ number ranging from 201 to 600. More than half of IT-companies located in the Kharkiv region fall into “extra small” category with less than 20 persons engaged. The list is compiled with 43 medium (81-200 employers) and 105 small companies (21-80).

Due to the comparably narrow market for IT services in Ukraine, the majority of Kharkiv companies are export-oriented with more than 95 percent of total sales generated overseas in 2017.  Overall, the estimated revenue of Kharkiv IT companies will more than double from $800 million in 2018 to $1.85 billion by 2025. The major markets are North America (65 percent) and Europe (25 percent).

The median monthly income of Kharkiv IT specialists is $1,800. This constitutes a local brain drain problem for other knowledge-intensive areas in Kharkiv which cannot boast such high salaries. In particular, Kharkiv universities average salaries offer is approximately $350, which is less than motivating for keeping competent faculty. There is no surprise that the majority of the top managers of Kharkiv IT companies agree that education in the region is below employers’ expectations and requires serious changes.

The research also includes the analysis of Kharkiv IT social impact, business environment study, human capital overview and the profile of IT specialist in the Kharkiv region. The full research report is available online.

Summing up the research, the experts remained optimistic in their forecasts. The general mood of the research presentation was bright, as the audience frequently responded with a friendly laugh and applauded to the speakers’ witty comments.

Note: Kharkiv IT Cluster is a Kharkiv-based NGO that unites the IT companies, local authorities and higher education institutions to introduce complex changes to the IT ecosystem of the city since 2015. Today Kharkiv IT-cluster includes over 40 companies in the region, which jointly have implemented more than 20 educational projects, 30 social initiatives and conducted more than 50 specialized events for industry professionals.

Text: Taras Danko

Photo: Kharkiv IT Cluster