Research: Ukraine has 750 outsourcing companies with 172 thousand employees

AVentures Capital, Aventis Capital and Capital Times investment funds in association with Intellias prepared a report about progress of software development industry in Ukraine, Poland, Belarus, and Romania. Ukraine holds the top spot in this rating for the number of companies, universities, colleges, and revenue. The MC Today editorial team selected the most interesting from the report.
We found these insights worth sharing, so we contacted the MC Today and translated the research extract into English. Enjoy!

Ukraine, Belarus, Poland, and Romania combined constitute only a part of Chinese or Indian software development market. Yet combined, they form a globally competitive cluster.
Ukrainian software export is one of the most rapidly increasing economy segments — 2017’s revenue surpassed $3,6 billion. Such increase is related to a high amount of universities and courses that provide the industry with engineers.

Today, Kyiv’s salary level is the highest in Ukraine as is the competition. For example, comparing to the average in the country, hiring project managers costs 22% more, team leads is 19% more, and senior project managers is 3% more expensive.
At the beginning of 2019, in Ukraine, there were 245 IT service companies with 50+ employees and more than 750 IT service companies total.

Industry overview of Ukraine

The Poland’s pay level for IT specialists is far from great: the employee’s income is about 46% lower than in Germany.
According to the World Bank, Belarus is in the top ten countries that carry out business-friendly reforms. At the end of 2018, IT industry of Belarus came third by the number of vacancies.
Between 2014 and 2017, Romanian IT service industry went up by 13,4% due to foreign investments. Moreover, the Romanian IT industry employs about 185 thousand specialists. Since 2013, their salaries increase by 11,5% up annually average. Still, the average pay of Romanian IT specialists is 50% lower than the pay of German ones.

By 2021, it is expected that the world’s IT service market value will reach $843 billion with the industry still growing. It is also expected that the outsource software development sector of Central and Eastern Europe will double its revenue in the next 5 years.
In 2018, the companies of Central and Eastern Europe export of IT services amounting to $13 billion.

The region in numbers: 470+ companies generate 5 billion $ in annual revenue

Regional salaries continuously increased during past ten years, and now junior developer receives $500 or higher, and project lead — $5 thousand or higher. In these countries, 470 companies engage in software development with total of 700 thousand IT specialists. Each company consists of 50+ employees. At large, the region is attractive for M&A transactions. For the last 4 years, the 70 such deals were announced. The reason behind such activity is in the 4-5 times more rapid increase in the revenue of Central and Eastern Europe’s IT outsource industry comparing to the world’s average. That is 20-25% against 5% in annual increase.

Regional trend of increase in mergers and acquisitions

  Thanks MC Today for such a saturated digest! You can read the original article at https://mc.today/v-ukraine-750-autsorsingovyh-kompanij-v-nih-rabotaet-172-tys-razrabotchikov-issledovanie/

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