Ukraine’s IT sectors leads Eastern Europe
When a national industry association publishes a comparison of countries, it is no surprise if that nation does well in the ranking. This was no different in the case of the recently published Eastern Europe Report by the Ukrainian High-Tech Initiative. A look at the underlying data, however, confirms the key finding: Ukraine leads the field.
Heidelberg, 8/15/2008. The study published by the Ukrainian national association last week presents a clear victor. Eastern Europe’s largest IT market, measured in both sales and number of providers, is Ukraine. The most important news, though, is that while prices in other locations are going through the roof, Ukraine remains affordable. In fact, nowhere else in Europe are IT services as economical as they are there.
The cost of labor in software development, testing and project management is at less than half of that in Germany.
The markets in Poland, Romania, Hungary and the Czech republic have overheated and it has become extremely difficult to find any employees at all. The cost of office space has soared there, as shown by an analysis by Austria’s CPB Immobilientreuhand, with up to €40 per square meter, excluding utilities, now being charged in Warsaw’s best district. This means that Western European levels have already been reached, and is why European software developers are looking beyond the EU’s borders for cost-efficient help in their projects, for example, to Ukraine. Albrecht Metter, CEO of Heidelberg-based ameria GmbH, on the study results: “EU membership has improved the financial situation of the newcomers and demand for IT professionals has risen dramatically. But since the local labor markets cannot satisfy this demand, prices are naturally rising.”
Heidelberg-based ameria GmbH, the leading German provider of nearshoring services in Ukraine, put its money on production beyond the EU’s borders early on. The cost of living there is lower while the supply of IT professionals is high. The result: Ukraine is the most economical location in Europe – not only in comparison to EU members, but across the continent. Even Croatia and Serbia/Montenegro fail to compare.
What does the future portend? The study presents a mixed bag of panel opinions all with the common denominator of a positive underlying mood. Political stability, a clear Western orientation, a functioning and growing education landscape and a high base level lead to only one conclusion for Ukraine’s IT industry: it will lead Eastern Europe in this field for many years to come.