July 8, 2004
Global development of Information Technology presents new opportunities for creation of new high paying jobs.
One of not so numerous areas of Ukrainian economy capable of producing competitive solutions with high added value is software development. Currently this sector, which is being neglected by the government, is in embryo. Its annual volume is estimated by experts at 200 mln.USD, which averages 0,5% of country GDP.
Nevertheless this is almost the only sector of domestic economy allowing an ordinary professional receive a European-standards salary. No wonder, as due to the low production costs and easiness of delivery through Internet to any point of destination major share of the software cost is comprised by the developer s labor cost.
Nowadays in Ukrainian legal programming are involved about 20 thousand professionals. However, according to expertise, existing scientific and educational base are capable of considerable expansion of this service sector. Present slow pace of expansion is affected by the fact that potential foreign customers are unaware of the Ukrainian IT companies and thus outsource their projects to the widely known brands India, Ireland, Brazil, Israel as well as newly-invented China.
Thanks to the fact that since 1970s India government has been purposefully developing intellectual businesses, country s software development industry grows at a speed that takes the lead over the rest of the economy sectors both in financial results and in the number of offered jobs. At an outsourcing boom peak in 2001-2004 the annual increase was 30-40%.
If in 2001 software development share of GDP was 1.7%, in 2002 2.5% , you can compare those with existing 4% ( 2004). The living standards of more than 500 thousand developers are significantly higher than that of the other working population. From eye-witness accounts, Indian program factories are identical to the American corporate campuses and resemble mini-towns outstanding on the background of the slums, so typical for the country overall.
Ukrainian business fails to keep up with the above mentioned countries in the rate of growth. In 2003 the increase in internal software development was only 8%. However, in the outsourcing sector ( production of software for foreign customers) last year s growth comprised 30%, which testifies about competitiveness of the Ukrainian programmers on the global market.
Based on the assessment, done by the international research company market Visio, in 2003 Ukraine exported intellectual products for 80-100 mln. USD in sum. Just to compare neighboring Russia exported five times as much and India 100 times as much.
In order to facilitate access to external markets, in 2002 Ukrainian developers created an alliance of Ukrainian Outsourcing Software Developers specializing on offshore development Ukrainian Hi-Tech Initiative . Currently there are 25 member companies from different regions of Ukraine in the alliance.
To develop home software development sector more investments are needed. Ukrainian companies are expanding on own reinvested assets. Demand on the global market grows way faster and this way Ukraine is losing money which might have been earned there. Local professionals are highly competitive and the task of the government is to the create the conditions for this business progress, said Victor Maznyuk, Ukrainian Hi-Tech Initiative coordinator.
As an example of governmental support we may take neighboring Russia. Last month the president assured that Software export stimulation will be included into the national program of the IT-market development. In Maznyuk s opinion, similar measures should be undertaken by the Ukrainian officials while there are vacant niches for the programmers on the global arena.
As to global market, it s cheap share is already filled up. Strong positions there are held by Indian and Chinese developers, who after three-months training are ready to write simple scripts for the bowl of rice, figuratively speaking. We are assigned a seat among the developers of high-qualification projects. Existing level of expertise of the local programmers is really high. Ukrainian scientific schools are strong too. Using this base tha majority of Ukrainian programmers are involved in complex development, say in Hi-Tech Initiative .
Noteworthy is the fact that low level development is done better by Indians main thing for them is to receive a well formulated task. We have a different mentality. Ukrainian and Russian programmers are noted for their creative, non traditional approach to the goal that had been set. Our country is praised by the western customers for inventions of new algorithms and creation of more effective methods of the problem solving. One should think not too long time back when the best algorithms of the soviet design engineers allowed achieving outstanding results on the weaker computing base than the Americans had.
Experts believe that realization of Ukrainian scientists ideas allows Ukraine hold leading positions in such science intensive spheres as images identification, namely faces visualization, voice recognition, neoroprogramming, artificial intelligence, medical computer diagnostics.
(specially for Vedomosti )
Source : Kievskie Vedomosti