30 Years of Ukrainian IT Development. Part I

30 Years of Ukrainian IT Development. Part I

On August 24, we celebrated the 30th anniversary of Ukraine’s independence. In many ways, all these years we have developed “despite” and not “thanks to”, including the development in the IT industry. And although our path to independence was not easy, we have something to be proud of and something to say to the world community.

Today, we have gained a reputation as a country that has become a leading technology hub in Europe and is developing at a rapid pace. Our engineers are world-renowned for their expertise and performance. There are over 110 R&D centres of well-known international companies in Ukraine; 21 companies of Ukrainian origin and with development offices in Ukraine are included in the list of Global Outsourcing 100. Isn’t this something to be proud of?

We decided to take a little tour into the past and compare the path of the IT industry at the beginning of its origins in the 1990s and in modern times. We asked the Vice-Presidents of IT Ukraine Association what the relations with the authorities, the situation in education and international cooperation were like decades ago and what they are like now. Leaders of IT companies-members of the largest specialized IT Ukraine Association also shared their opinion.

1990s: Situational service start-ups

The first outsourcing projects are being launched in different parts of the country. The term “industry” is not appropriate for this period as different teams mostly did not know each other, did not communicate and did not consider themselves to be a part of something bigger.

2021: The second export industry

The predominantly consolidated industry represents its voice at the national and international levels through 30+ clusters and 5+ strong associations. The next step is to defend one’s interests not only through agreements with key stakeholders, but also to fully enter the political arena (the “Middle Class Party”) as an independent player.

1990s: University. Work. Re-training

It is important to understand that the beginnings of specialized education date back only to the mid-2000s. That’s the time when the first corporate courses, the first labs in big companies like Microsoft, Philips, IBM, etc. appeared. These were the first examples of Western business cooperation with universities, just the beginning.

2021: Fast, flexible, unsystematic

Today, IT education is developing very rapidly. People are seizing the opportunity to master such a popular profession as IT. The rapid development of online tools, a large number of training programs on the market help beginners, although sometimes unsystematically. The positive factor is not only the variety of training programs for all tastes, but also the availability of interesting and useful content. Today it is so attractive that studying IT has become fun. One no longer needs to study for 5 years to see the first results of one’s work.

1990s: Cheap resource. “Pig in a poke”

The 1990s were a period of formation of Ukrainian IT as an industry, which consisted mainly of outsourcing companies that worked for American customers. The IT business worked on the outsourcing of IT services, which allowed the customer to receive quality services in the field of informatization, reducing their administrative costs, and helped the companies to get the inflow of currency.

2021: Intellectual asset. Developer hub

Today, Ukrainian IT successfully competes in world markets. The trend of “brain drain” to the West has changed to the interest in opening own offices. Our “intellectual asset” is a real treasure for foreign companies. The Ukrainian IT industry is growing rapidly and has gained worldwide recognition and trust from foreign investors. Ukraine has a strong scientific and technical base, especially in the field of technical sciences, and is an attractive point for the development of IT business.

Miratech, founded in 1989, has been in the market for 32 years

1990s: Freedom, Discovery, West

The business was developed by small teams with an entrepreneurial spirit and a lack of experience in global markets. Most of the teams were from the university-academic environment. Close cooperation with the first foreign clients required immersion in another cultural and business environment, we felt like pioneers. The state did not notice this business for a long time to come, services were provided using the Internet and without crossing customs borders.

2021: Competition, consolidation, overheating of the labour market

Business development is beginning to face the scarcity of labour resources in the country. The unreformed system of university education does not allow the industry to get enough of the necessary specialists. As a result, the salaries of highly qualified specialists have skyrocketed, and Ukraine is losing its competitiveness.

EPAM Ukraine, founded in 1993, has been in the market for 28 years

1990s: Computers. Windows. Automation

The time of the appearance of the first computers and specialists who began to deal with PC hardware and automation of financial services in small businesses.

2021: Advanced industry. Talents. Multi-vector

In these 30 years, the IT industry has become an important part of the country’s economy and a driver for the development of talented youth in the country. Today, IT is a place where you can grow and receive decent compensation.

Itera, founded in 1995, has been in the market for 26 years

1990s: Mathematicians, algorithms, enthusiasts

In those days, programming was a fairly niche industry that few understood. There were few or no casual people in this profession. Only those who really liked to do this became programmers. People did not think much about the prospects of the industry at that time. Those who wanted careers, money and prospects became financiers, bankers, or specialists in international relations.

2021: Peak attractiveness, global mobility, overheating

The IT industry in Ukraine and around the world has reached the peak of its attractiveness and is ahead of most professions in terms of salaries and opportunities. This is an unstable situation that creates various distortions. Speaking of Ukraine, I believe that IT is a model of global mobility, which is still unattainable for other industries. This fact has both advantages and disadvantages. As long as conditions in Ukraine are more favourable than in other countries, programmers will work here. As soon as conditions level out or worsen, there might be a very sharp and very significant outflow of people to other countries.

GlobalLogic, founded in 2000, has been in the market for 21 years

1990s: The world opens Ukraine

During this period, the Ukrainian IT industry was just beginning to take shape. Technicians who emigrated to the United States and Europe in the late 1980s and early 1990s helped the world discover Ukraine and vice versa. They maintained friendly and professional connections with local colleagues, created the first IT projects with them and recommended specialists from Ukraine to their business partners from Europe and the USA. Thus, the first IT companies that worked with Western customers appeared in Ukraine. One of them was Validio Software, founded in the early 1990s, which later became part of GlobalLogic in Ukraine.

2021: Professionalism, experience, growth

The Ukrainian IT industry has significant authority and trust among foreign customers. Unlike in the early 1990s, our clients today are Fortune 500 companies, and our projects are complex developments in the field of digital business transformation. For many years in a row, the industry has been growing by more than 20% annually and in 2020 IT became one of the key export industries of Ukraine in addition to purely economic indicators.

Lohika / Capgemini Engineering Ukraine, founded in 2001, has been in the market for 20 years

1990s: Hobbies, personal connections, lack of information

The people who developed IT in the beginning were enthusiasts. They loved computers and many of them had technical education but were professionally engaged in something not directly related to IT. They were united by local get-togethers and the first networks, such as Fido, where knowledge exchange and mutual assistance took place. Information was much less available than now, which created a barrier to enter the profession.

2021: Globalism, variability, business

Today, IT is a large system business with many stable models and constant competition. New ideas and strategies are constantly emerging here, and everything is changing and evolving at breakneck speed. Today, the IT business is completely global and open to everyone.

Ciklum, founded in 2002, has been in the market for 19 years

1990s: “Geniuses in Garages”

IT in the 1990s was a thing of enthusiasts and daredevils. As in the legends of Silicon Valley, they literally began to build the Ukrainian digital industry in rental shops, apartments and institute rooms. Significant intellectual potential and the courage to dream — that was the combo that made the impossible possible and set the industry’s drive for years to come.

2021: Business of intellect and innovation

Ukrainian IT has long since grown from its original state of the “club of enthusiasts”; intellectual power has combined with the logic of a market economy and industry 4.0. It is possible that in the current state of the industry there is less “romance of the 1990s”, but much more structure, vision and focus on the future. The IT industry today is made up of ambitious start-ups with high hopes, developers of innovative products, and large global businesses that create digital solutions for companies around the world. Ukraine is now consolidating these achievements and laying the foundations for further development — the transformation into a powerful knowledge economy based on an intellectual product.

It is worth remembering that the emergence of the industry coincided with interesting times, which are characterized by enthusiasm, uncertainty, locality and lack of information. Year after year, we have overcome these barriers, gradually gaining a reputation as the world’s leading developer of high-quality technology solutions.

Read: 30 Years of Ukrainian IT Development. Part II