Tapping Ukraine’s IT potential

“Russia and Belarus already provide extensive preferences for their IT sectors, not only tax preferences, but also support for training development, and changes to customs and labour legislation,” says Vladimir Bek, owner of programmers Sigma Ukraine and head of the IT committee at the European Business Association, a Kyiv lobby group for foreign-owned business. “In Ukraine, the creation of favourable conditions is still only at an initial stage.” Russia and Belarus had a head start in Ukraine when their established IT companies, Luxoft and EPAM Systems, set up there. Together, they employ around one-fifth of the Ukraine’s total IT development talent. Ukraine is competitive in terms of costs, with developers earning up to $20-30 an hour at the top end – 10-30 per cent lower than in Belarus and Russia, but still astronomical figures for young people in a country where the average salary is around $300 per month. Despite the wages on offer, insiders and experts see problems ahead for the goose that is laying these golden IT eggs – Ukraine’s Soviet science legacy.

“The level of university training and the supply of fresh talent is the number one problem currently faced by the sector,” says Inna Sergiychuk, CEO of Ukrainian Hi-Tech Initiative. “Ukrainian students might graduate with good theoretical knowledge, but they have poor practical skills, and this is forcing large companies to have to set up their own training centres to secure competent staff.”

“Hiring is difficult,” agrees Eugene Novikov, director at the Ukraine design centre of US company Mindspeed Technologies, which develops semiconductor solutions for communications applications. “While those who enjoyed free and good training in the USSR and right after are all either abroad or in senior positions, the prospect for the flow of new heads is looking pessimistic,” says Novikov. “Technical training has gone through a decade or so of deep degradation – the state universities were and still are very poorly funded.” Backing up Novikov’s complaints, the respected Shanghai ranking of the world’s top 500 universities released August 15 did not include a single Ukrainian institution. “With a bit of government support, one could surely attempt to bring at least one Ukrainian university into this ranking,” says Andreas Umland, a German Ukraine expert teaching at Kyiv Mohyla university. More mundane problems such as the decaying infrastructure dog the sector, says Novikov: “We have power outages even in Kyiv and have to buy expensive uninterruptible power supplies.” Source: Financial Times