Ukrainian developers under the war circumstances. How do they sustain the economy?
The IT industry in Ukraine is a progressive field that became an economic giant in 15 years. In December 2021, the services export brought to the national treasury about $7 billion. The increasing tempo is fantastic – 20-30% annually. In addition, the Unified State Register of Individual Entrepreneurs published the amount of 250 000 Ukrainian developers at the end of 2021 – the year before the number was a little more than 200 000. Analysts prophesied a prominent future for the programming industry in Ukraine. But the turn of events was freaking and unexpected.
Around 5 am on February 24, 2022, Russia started a full-scale military attack on Ukrainian territory. The country trembled under the hail of many missiles.
Plan B for Ukrainian IT
Shock. Fear. Panic.
Anyone living in the civilized world was ready for this invasion. While people were leaving their houses and moving abroad, IT companies started their B plans.
Relocation developers, managers, and designers abroad
Because of the war in Ukraine, thousands of programmers, designers, managers, and business developers moved abroad to continue projects with foreign clients. Companies managed shelters and working conditions for employees that turned out under the Russian occupation. They moved to Poland, Germany, and Portugal – Ukraine is grateful to all European countries for the support and temporary homes they gave to our people. For now, Western Ukraine is an IT center where specialists can safely do their duties – more than 70% of Ukrainian developers, content writers, and others can drink coffee in town and build a website for your business without any stressing out.
Strengthening a digital infrastructure
The informational technology field resisted thanks to the strengthened digital infrastructure in the country. Internet providers had backup plans to build the internet chain mostly operable. Despite occasional Russian missile strikes in the safer parts of the country, electricity and internet services are functioning primarily without interruptions. Even though Russian cyberattacks injured one of the Ukrainian internet providers, eastern regions of Ukraine remained with no internet service. But not for a while, SpaceX-run satellite internet service that CEO Elon Musk touted at the start of the war in Ukraine has provided over 10,000 dish antennas providing the emergency connections to thousands of people.
A crisis airbag
We can safely assume that, after the Crimea annexation, many IT companies tried to avoid the mistakes. They installed backup generators, supplied workers with laptops with longer battery life, moved IT infrastructure into the cloud, or used virtual developer infrastructure hosted in Poland or Latvia. No matter what, Ukrainian software developers are still working on projects and helping the economy.
The role of the Tech sector in the Ukrainian economy
Referring to the IT Ukraine Association, it is vital to note that more than 85% of IT professionals sustain the Ukrainian economy. During the war, IT companies took the initiative and transferred more than $25 million to support the Army and the country with taxes paid in advance. Seventy-seven percent of Ukrainian tech companies have brought in new clients during the war. Moreover, almost 2% of IT specialists with having military background attached themselves to the Armed Forces. The Tech sector is playing a crucial role in reducing the humanitarian catastrophe caused by the job loss in the essential part of Ukraine. We believe in quick economic recovery and try to push the process immediately.
Even in the pre-war period – in 2021, the IT industry brought almost 7 billion in foreign exchange earnings to the Ukrainian economy and triple taxes (23.5 billion hryvnias) compared to the past six years.
While key sources of export revenue – metallurgy and agriculture – are losing out, businesses are shutting down, and people are forfeiting jobs – Ukrainian tech businesses continue to operate as never before. And we need to keep it stable.
On March 14, Ukrainian President Volodymyr Zelensky said, “The economy must be preserved and restored. Pharmacies, trade, any business that can work for the country to live. For the restoration of Ukraine, that already begins”. President Zelensky promised to remove as many obstacles as possible to get businesses back up.
Politically and in terms of economics – this war spread widely throughout Ukraine. The impact will be significant on all industries, particularly the tech sector. Tomorrow, foreign companies will experience a shortage of IT specialists. And that is why.
3 reasons why Russians will get a negative impact on the tech sector in the result of attack on Ukraine
The global IT industry had about 400,000 developers from the aggressor countries. The world’s reaction to the Russian invasion of Ukraine with sanctions affected Russian IT.
Payment networks exit from the Russian market
Payment networks refused to cooperate with Russia, which means Russian programmers will not be able to get paid for their work. Of course, some companies will pay with bitcoin or Ethereum, but it is not so easy. As a result, they will stop cooperation with Russian engineers.
Government creates an informational void
The Russian government is gradually restricting access to the Internet – Instagram is blocked, and YouTube is next. Total prohibition will not happen suddenly – one day, Russians will occur in a world of limits and bias. That is why it will be impossible for them to work with Western customers.
Break off cooperation
Additionally, international companies deliberately refuse to support the economy of the aggressor country. Numerous brands have already left the Russian market. To do business with those who started a war in Ukraine is unacceptable – hopefully, this trend will continue. The conditions described above will lead to a significant shortage of tech specialists worldwide. Previously the total number of IT vacancies worldwide was about a million, but soon we will observe a boom in the already overheated IT market.
What is Ukrainian IT today?
Regarding statistics of January 2021, the IT sector covered 37% of all export services in Ukraine, and we expect this number to increase.
Despite the war, most Ukrainian companies fully retained their customers and contracts. 52% of companies kept 100% of their contracts, and 32% of companies – had 90-99% contracts. And only 16% have lost 10% or more of their contracts.
Ukraine grew and matured to become a center of quality IT services for the whole globe. Before the war, we reached a reputation of being responsible, flexible, and reliable partners.
In MagnificSoft we are proud that
- Ukrainian IT is about well English-speaking developers and other non-tech specialists;
- Ukrainian developers mostly have graduated from technical high schools and can deliver professional products;
- Ukrainian programmers are worthy of working at Microsoft, Oracle, and Google and with worldwide famous brands.
Please support Ukraine in our fight for freedom and territorial integrity. Don’t stop the cooperation with Ukrainian business, support the economy, you can donate to