Drivers of IT Industry in Ukraine, Bulgaria, and Romania

In this paper the successfulness of IT industry was discussed in 3 countries in Easten Europe, which are currently in focus of international investment community. Although Ukraine, Bulgaria and Romania had similar starting point in terms of former regime and educational base, the trajectories of development varied respectively depending how the opportunities were embraced and strategies employed by the key actors (state, business and universities). To understand why Ukraine is positioned behind Bulgaria and Romania, 4 arenas of competitiveness have to be considered, as there is no single answer or solution to this situation.

When reviewing factor conditions, it becomes apparent that favorable and timely governmental policies still play significant role in improving the country’s image needed for international investment and for normal functioning of domestic industry players. In this respect, Ukraine can learn from regional leaders, which in turn emulated best practices of mature international IT nations. First, clear-cut and balanced state strategy is needed in Ukraine to support the growing market, which, on one hand, has a critical set of attraction factors, but, on the other hand, suffers from weak business environment. Then, links with international markets can be easier achieved due to improved credibility rating. Thus, the work is to be done in two fronts: domestic and international, because a combination of strong players both local and foreign-owned ones poses as a more beneficial for the country’s economy as a whole. While international companies serve as drivers most of the time (for policies, collaboration initiatives, etc), local firms are perceived as necessary for development of high-value added national products needed to maintain competitiveness in future. While Ukraine rates better in terms of market size, salary level, and potential for growth,it still has to catch up with Bulgaria and Romania when it comes to relevant educational policies,share of services and infrastructure to maintain favorable local and international demand.

Therefore, the key to success is to be ready when the opportunity comes.