Lviv IT Cluster is ready to present the results of its annual analytical research of the Lviv IT market – IT Research. Over the past 3 years, IT Research has become the biggest and most anticipated studies of the industry in the Western region. This comprehensive study is devoted to measuring the economic effect of the IT industry in Lviv, tracking the dynamics of economic indicators and the general overview of the local IT market.
IT industry development dynamics
Over the past year, 70 new companies have emerged in Lviv, with their total number increasing from 247 to 317 companies. Thus, the growth dynamics is 28% per year. The structure of the market remains unchanged: 90% of the market is made up of small and medium-sized companies, 10% are large (with more than 250 employees). At the same time, half of Lviv IT professionals work at large companies.
The number of IT professionals also increases with an average annual rate of 25%. The research shows that as of 2018 – there are 20-21 thousand IT specialists working in Lviv. Based on preliminary data from 2017, when the number of IT professionals reached – 15-17 thousand, we can predict that by the end of 2019 there will be 24 thousand IT professionals in Lviv.
Human capital is growing due to two sources – university and specialized course graduates, and internal migration. According to the data provided by Lviv universities, 5 thousand current 4-6 year students will be ready to start a career at local IT companies by the end of 2019. According to the research, 39.1% of IT specialists moved to Lviv from another town including 22.2% from other regions of Ukraine.
The Lviv IT industry has shown high growth rates in recent years. Our city has become one of the key IT centers in Ukraine. That’s why we need to stay relevant and thoroughly track the growth of the IT industry annually. In just one year, the growth of the industry in the city amounted to 28%, so we predict a further annual increase of 30%. Such data gives us valuable hints – in which direction to move, which projects to work on, etc. Thanks to the research, we understood the importance of educational projects, and as of today Lviv IT Cluster has already launched 9 innovative programs at Lviv universities; we understand that IT professionals move to Lviv because it’s a comfortable place for work, therefore, we are also working on improving the infrastructure in Lviv – soon our largest infrastructure project Innovation District IT Park will open up in the city.- comments Stepan Veselovskyi, CEO at Lviv IT Cluster.
The turnover of the IT industry of Lviv in 2017 amounted to $ 618 million, which is twice as much as in 2015. The economic effect created by the local IT industry over the past year was almost $ 1 billion, compared with $ 734 million in 2016. The overall economic effect of $ 919 million consisted of direct – $ 559 million and indirect – $ 360 million. In the structure of the GRP of Lviv (which equals $ 2.7 billion), the IT share amounted to 21% in 2017 and 20% – in 2016.
The technology industry has created about 63 thousand new jobs in Lviv: direct employment reached 21 thousand people, indirect and induced employment – 42 thousand people. In a year, the average monthly income of IT professionals has also increased – from $1740 in 2017 to $1880 in 2018. The reported growth dynamics is 8%.
Portrait and expenses of IT professionals
Working in the IT industry is no longer regarded as solely male, but gender distribution is still in favor of men – 67% of IT employees are male. The proportion of women is gradually increasing, making it 33% now. The average age of an IT employee – 28 years. The survey of more than 800 IT employees allowed us to make a detailed portrait of a Lviv IT professional: they pay attention to health, travel, engage in charity and freelance in free time.
Most of the interviewed IT specialists do sports (63%), are married (48%), and almost one third have children (28%). 81% of the surveyed save money, but only 34% confirmed that they use Ukrainian banks for savings.
48% of IT professionals admitted to supporting charity initiatives. Over the last year, they spent $ 2.4 million on charity. This is twice as much as, for example, the amount spent on visiting cinemas ($ 1.2 million). They provide not only money support (88.2%), but also free intellectual services (18.1%), and help personally (14.3%).
41% of Lviv IT professionals live in rented accommodation, 37.1% – in their own, 20.8% live with parents. 27% of the surveyed has bought real estate in the last three years. On the primary real estate market, 23.2% of the total number of commissioned apartments in Lviv was purchased by the representatives of IT community in 2017, and 22.5% in 2018. 45.2% of IT specialists own a car, 17% of which own two or more cars.
74% of the respondents traveled for recreation within Ukraine and 70% – abroad. In general, Lviv IT specialists visited 67 countries throughout the year. 62% of IT employees used air travel services during the year.
Top 5 most popular travel destinations in Ukraine include Carpathian Mountains, Kyiv, Odesa, Bukovel, Ternopil. Top 5 travel destinations abroad: Poland, Germany, Turkey, Italy, Spain.
The growth of the industry is indisputable – both within the existing companies and due to the emerging of new ones. The growth rate of companies is determined by the amount of human capital in the city, the development of which is promoted by the consolidated efforts of the IT community. Over the past 3 years, 18 new technical degree programs have opened at higher educational institutions of Lviv. During 2 years, approximately 8288 people trained on non-academic/private IT courses. 28% of new companies opened in Lviv this year.
Among the factors that contribute to success and influence the potential of the development of the IT industry in Lviv, experts highlight the growing demand for products and services of the tech industry, the attractiveness of the city for IT specialists from other regions of Ukraine, a favorable investment climate, as well as the fruitful cooperation of the industry with educational establishments, and the development of IT infrastructure.
DOWNLOAD IT Research 3.0 HERE.
About IT Research 3.0
The research and analytical stages of the project lasted 4 months. The integrated methodology of IT Research 3.0 has a sociological and economic component, and also uses numerous research tools: sociological surveys, expert interviews, public information requests. The research stage included:
- survey of 821 IT specialists working in Lviv
- analysis of 317 companies
- 53 requests for public information sent to the appropriate entities
- calculation of costs of 21 companies
- 8 in-depth interviews with top-managers of companies
Lviv IT Cluster is a community of leading IT companies, which together with universities and local authorities improve and develop IT in the city. The association took the lead to conduct systemic changes in the business environment of the city and the country.