Despite the corona crisis, the tech sector is one of the few industries both in Ukraine and globally that suffered minimum losses and swiftly adapted to the challenges of the new reality. Although the corona crisis brought a slight halt to operations in spring 2020, most tech companies have made a painless transition to remote work. Today, we’ll dive into the current tech market trends in Ukraine and learn what makes it a promising tech destination.
Vibrant tech market
Ukraine boasts a lively tech sector and a promising startup scene. The Ukrainian tech market has grown twofold over the past four years, reaching 184,700 IT specialists, according to the 2019’s research by N-iX. According to the 2019 CEE report, the Ukrainian software development sector increased by 19% in 2018 and continues to grow steadily. The tech industry is one of the major service export players, bringing the country around $5 billion a year.
The reports by the World Bank, PwC, and IT Ukraine Association revealed that more than 4000 technology companies are currently operating on the Ukrainian market, and Information and communication technologies (ICT) is one of the largest industries, accounting for 20% of all Ukrainian services exports.
Ukrainian tech companies work with 228 countries, and the most popular markets are the US (50%), Europe (35%), and Canada (8%). According to A.T. Kearney GSLI 2019, the country’s attractiveness index improved in 10 years from 42nd place in 2009 to 20th place in 2019. Since Ukrainian tech companies provide high-quality services and expertise in various sought-after areas such as Big Data, telecom, cloud services, e-commerce, fintech, more than 100 companies on the Fortune 500 list became their clients.
In the StartupBlink global startup ecosystem report 2020, Ukraine ranked 29th among 100 startup-friendly countries. As compared to 2019, Ukraine jumped two positions to 29th, making it to the top 30 ecosystems worldwide. Kyiv holds 32nd place globally, having reached the top 10 ranked European cities at the 8th. The Ukrainian startup ecosystem is concentrated in 7 cities, among which Lviv, Odesa, Kharkiv, and Ternopil. “The Ukrainian startup ecosystem is truly inspiring. The country has been going through economic difficulties for several years but still manages to create scalable and global technology.
Diverse and cost-effective tech talent
According to the latest estimates, a tech employee’s average salary in Ukraine equals $2,300 per month (after tax). In contrast, the average salary in Ukraine in September of 2020 amounted to UAH 11,998, which makes $426,98.
The all-Ukrainian anonymous salary survey conducted by DOU revealed a variation in pay between different seniority levels, cities, and programming languages. 12,419 tech specialists took part in the survey, among them Software Engineers, Tech/Team Leads, and System Architects, with the largest number of respondents from Kyiv (44%), Kharkiv (14%), and Lviv (13%).
The salary range is largely affected by the level of seniority. In particular, Junior SEs, SEs, and Senior SEs in Kyiv get $800, $2200, and $4000, respectively. In other cities, Junior SEs, on average, receive $100-150 less. The difference between SE’s and Senior SE’s salaries amounts to $ 700-1000.
Senior Back-end developers make the most ($3750), while Junior Front-end developers receive a low of $650.
Salaries of Junior SEs with Java, C, and C ++ reach $800, whereas Senior SE and SE with Scala and Go can earn around $4400-4500 and $2400-2700, respectively.
The Ukrainian tech industry mostly relies on contract form of employment. Tech specialists work as entrepreneurs of the third group, paying a unified social tax, a monthly payment to the state budget regardless of the income amount, and 5% income tax. The last decade saw a boom in the tech industry, which is believed to be due to good government policies, particularly the cancelation of the value-added tax (VAT) for tech companies and reduction of income tax on employees to 5%. It has been appealing to both foreign and Ukrainian companies as it allows them to maximize their profits.