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About the potential of Ukrainian IT in the article for Maanimo

In the coming year or two, the government plans to fully digitize the entire document flow in Ukraine. This process is already actively moving, and at the same time requires not only large financial investments, but also human resources − skilled IT specialists. Constantine Vasuk, Executive Director of IT Ukraine Association, told about the Ukrainian IT sector’s development, IT-education quality, IT sector taxation and promising start-ups in an exclusive interview with Maanimo.

- There are more than a thousand IT companies in Ukraine with about 100 thousand employees. At the same time, the number of IT specialists grew by almost 3.5 thousand in the first half of the year. With such a large increase, questions arise about the quality of education in this field. How is this?

- Despite Ukrainian education system is far from perfect our staffing potential is high. According to HackerRank, Ukraine ranks 11th among the 50 countries with the best software developers and 6th in the TopCoder’s ranking of the best programmers. But there is a problem with the specialists’ outflow. We must create a comfortable environment for IT business in Ukraine, promote innovations at the state level in order for the best IT professionals do not leave the country.

Regarding the quality of education, students have difficulty in finding a job because the curriculum and technical equipment of higher education institutions do not correspond to the realities of the IT market. The employer spends additional financial and time resources to prepare a university graduate for work.

- How active are IT companies investing in the professional development and training?

- The cooperation of IT companies and universities has been quite a long time-more than 10 years on the Ukrainian market. EPAM, SoftServe, Luxoft, Ciclum, GlobalLogic were one of the initiators. Collaboration formats range from the R&D centers’ and state-of-the-art university curricula’s establishment to shorter-term projects like lectures and internships.

It is important to emphasize that IT business investment in education is steadily increasing: companies not only modernize computer classrooms, but also provide grants for training and additional teacher’s motivation. According to the practices, this is the most effective and fastest way training IT specialists, since such students more likely will be employed. Everyone wins.

Recent examples of large-scale university-business collaboration include a partnership between Ukrainian Catholic University and SoftServe, which provides funding, collaborative research projects, new artificial intelligence and machine learning courses.

Of course, successful cooperation of IT companies with universities does not replace state programs. Education system adaptation to the IT market requires is a long and systematic work.

- More than 80% of IT services in Ukraine produces for foreign markets, which makes this industry export-oriented. In addition, the earnings of Ukrainian intellectuals abroad increased by a third. It turns out that we are practically wasting intellectual potential? Is such situation advantageous to the state because of the state budget’s replenishment?

- Indeed, computer services exports increased by one third to $ 1.64 billion for the six months of this year. The IT industry is in the TOP-3 in terms of services export, which ensures a currency steady flow into the country.

Exporting IT services and developing your own product are not contradictory. Vice versa. In fact, there is a technologies transfer in Ukraine during the working with foreign high-tech markets of the USA, Europe and Israel. Our experts are expanding their expertise in the most demanded areas: automotive, fintech, space tech, agritech, energy tech and others. With enough knowledge and experience, they can create their own products and startups.

Nevertheless, the question is: is the Ukrainian market ready to buy an IT product? No, solvent demand for innovation is still insufficient in the domestic market.

While artificial intelligence and robotics are already used abroad, most Ukrainian customers are still in the process of business process automation. Some specialists do not see the prospects of self-realization in the country, so they go abroad, because the demand for them there is high.

We will come out of this closed circle when we form a solvent internal demand for IT services.

- Most of the IT specialists are opposed the Cabinet of Ministers tax initiative of the entrepreneurs’ fifth group. Some believe that the third group is enough. What is your position? Perhaps it would be more advisable to completely reform the tax system?

- The fifth group should be considered not only as a tax initiative, but as a comprehensive mechanism for the IT industry development, which should eliminate imbalances in the education system.

At the same time, the Association is concerned about the lack of clear mechanics of the fund's work: accumulation and money distribution, contribution level and the project’s start time. That is why we continue to initiate a dialogue between the authorities and the IT business.

- The Government considers that creating a Human Capital Development Fund is a great idea. At the same time, many IT representatives are against it because they do not want to support fund through their own pocket. However, they are ready to support the initiative if the transition to the new tax system will be voluntary. What conditions are required for win-win solution?

- According to the Government's initiative, the transition to the new tax system will be voluntary. Representatives of IT-business at the meeting on September 4 also argued for the choice. Because the third group of entrepreneurs became the IT industry driver, helped to replenish the budget and opened opportunities of the international IT market for Ukrainian IT professionals.

The decision-making process should be open and transparent to all dialogue participants.

- We are already on the path of digital transformation: online subsidies, electronic non-residency and more. How is Ukraine prepared for this technically? What do we need?

- IT industry is ready to meet internal demand for digitization. I think if the tender procedures are transparent and competitive in terms of doing business, IT companies will take part in them. Why not? We already have successful examples of business and government cooperation. For example, the Lviv City Council has implemented a number of projects with the support of IT companies: a system of housing and communal enterprises automation, a payment portal for utility bills for citizens, monitoring and dispatching system of public transport.

It is logical to start with the identifying the priorities and key initiatives to digitalize.

- Name the TOP-3 promising Ukrainian startups. In your opinion, what is the main potential of IT projects in Ukraine?

- I'm inclined to believe that technologies will facilitate the resources’ sustainable consumption. Therefore, here is my rating:

  • SolarGaps - “smart” blinds that produce electricity from the sun. They have already won several grants through Horizon 2020.
  • Delfast electric bikes, which set a world record on the Kyiv cycle track.
  • Ecoisme - a system that measures electricity in the home and broadcasts results in a mobile application.

I believe that the key potential of any project lies in the people.