Ukrainian IT industry says it’s still open for business

Ukraine’s leading IT trade association insists the country remains open for business and able to deliver technology projects to foreign clients, even amid the war with Russia and the ongoing refugee crisis.

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Alexey Federenko / Shutterstock

The IT Ukraine Association represents about 100 leading companies with 75,000 professional IT members between them in the country, which has become a near-shore haven for Western companies seeking skilled personnel, particularly relating to software development and engineering.

Ukraine’s Office of Foreign Affairs says that more than 100 of the Fortune 500 outsource to the country, with IT export volume increasing 36% to US$6.8 billion in 2021, up from US$5 billion in 2020 and US$4.2 billion in 2019, according to the IT Ukraine Association. Separate studies have found that the IT industry grew from 0.06% of GDP in 2013 to 3.3% in 2018, with talented IT professionals emerging through universities and government schemes, such as the IT Creative Fund.

Despite such progress, the IT Ukraine Association’s executive director, Konstantin Vasyuk, is speaking to journalists online in a dimly-lit home from an undisclosed location, with air raid sirens audible in the background.

As Russian military forces advance from the south and east of the country, and with the port town of Mariupol under a constant siege, he’s worried about his safety, but seemingly not as much as his broadband connection. He spoke to Computerworld while his children were doing schoolwork online.

Acting as a conduit to Ukrainian ICT businesses and their employees, Vasyuk says that the organisation and its members have remained resilient through a month of war. The Ukrainian ICT industry donated US$24 million to the army and humanitarian aid within the first 10 days of war, and he says most organisations can still deliver on IT projects, even as Ukraine-based employees joined the army or volunteered to bolster the country’s cybersecurity defences.

The trade association’s own research reveals that about 70% of IT professionals are still working in “safe” regions of Ukraine, with about 16% of the IT workforce, many of them women, stationed abroad. About 2% of IT professionals have joined the armed forces, while 5% have volunteered to assist with cybersecurity efforts and the support of critical national infrastructure. “Maybe it will sound like a cliché, but it's that type of responsibility, reliability, and determination that drives us now, to continue working,” said Vasyuk, in an interview organized by TechlinkUkraine.

Secure networks and banking in Ukraine

Internet access remains relatively unaffected by the Russian invasion so far, Vasyuk said. Fiber-optic networks are “stable,” while Elon Musk’s Starlink satellites connections are available on reserve channels, following a plea for help on Twitter from the country’s minister of digital transformation, Mykhailo Fedorov.

The ongoing disruption in regions such as Mariupol, Kharkiv, and Kherson has hit the local economy, but Vasyuk maintains that core banking and payment services remain relatively unaffected. “Some companies have had problems with the access to their accounts, but it's a very small percentage,” he said, adding that Russian sanctions have hit some smaller businesses in regions under Russian military control. (The Donbas regions of Luhansk and Donetsk have been under separatist Russian control since 2014, so are not covered by his assessment.)

Rozdoum CEO’s story of defiance

Since the onset of war on February 24, tech companies have looked to leave Ukraine. EPAM, one of the country’s biggest exporters, software development, and consultancy providers, reacted by supporting staff, halting services to Russia-based customers, and spending US$100 million on humanitarian aid. The company has also implemented BI dashboards to track employee safety, rented buses and developed a ridesharing app to help people cross borders, and helped those displaced by the war to find accommodation.

Andrey Dekhtyar is the CEO of Rozdoum, a custom application developer and Atlassian partner with offices in Kharkiv, Ukraine, and Jersey City, New Jersey. His family has relocated to Europe and safer parts of Ukraine, but he returned to Kharkiv. He sees it as his “moral obligation. It's my country, my home and I contribute in the way I can,” he said, during a 20-minute interview in which continuous shelling from Russian forces could be heard in the background.

He’s been busy, too, from influencing partners like Atlassian and Dell to stop business operations in Russia to buying second-hand cars out of his own pocket and giving them to the military. The day-to-day work continues, with no interruption of service, and he has actively encouraged staff to volunteer on the “cyber frontline” when they have the time.

Business continuity planning has largely been in place since the start of the Russian conflict in 2014, and accelerated through COVID-19, with colleagues moved from workstations to laptops and mobile devices, and with offices temporarily closed. “We still have 100% of our clients. None of them terminated their contracts,” he said, adding that some prospective clients even paid ahead of time, to support the organization’s finances.

How global organizations and leaders can help Ukraine

Vasyuk was keen to emphasize that the country’s IT industry remains in strong shape. The group’s research shows that 85% of IT professionals are still working, with only about 5% of local ICT projects cancelled or postponed. Most clients, he said, understand the situation and have managed to mitigate risks through business continuity plans, to the point where “there are no major changes [clients] can feel or see.”

Vasyuk said that most Ukrainian technology firms have a diversified landscape of partners inside and outside the country on whom they can rely in the event of further disruption.

He encouraged new and existing clients to continue working with Ukrainian technology businesses, not only because they can continue to deliver effectively and affordably, but because the investment will prop up the economy and feed humanitarian aid.

It’s a theme that struck a chord when Computerworld spoke to Dekhtyar. “The more money we can get, the more services we can provide. … That will help our economy to survive. It seems like the war is being transported from the short war into the long war … so it’s more and more going to be a war of economics.”

Dekhtyar also said that Ukraine’s industrial sector has been “lost or damaged” due to the shelling in the east of the country, so this places greater focus on an ICT industry “that can work and is working.”

Vasyuk, meanwhile, senses an opportunity for local tech firms to pick up work following Russian sanctions and the reported brain drain of Russian talent leaving the country. “It gives a chance to Ukrainian companies to have additional contracts from those companies who closed relations with Russian IT providers,” he says, suggesting that US-based companies are seeking recommendations for service providers in the region.

Dekhtyar said global and European IT-based leaders can help by pressuring local politicians to stop doing business in Russia and relocating staff, but was keen to emphasize that such support will have limited impact if employees’ taxes don’t return to the local Ukrainian economy.

Ultimately, both technology leaders are adamant that the country will prevail, propelled by its robust and resilient IT industry. “We want foreigners to know that even though Ukraine is going through difficult times, that doesn't mean that Ukrainians should let their hands down and just sit it out,” Vasyuk said.

The IT Ukraine Association is looking to collaborate with partners on a jobs platform for displaced Ukrainians and can be contacted through its LinkedIn page. Rozdoum can be contacted at its website.

Copyright © 2022 IDG Communications, Inc.

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