In October 2018, regional business research results of the professional IT industry in the Kharkov city were officially published on the Internet. Analysis of industry development data was commissioned by a public organization of local IT representatives from Kharkiv IT Cluster. The trade union activists aim was to compile a digital database of the IT ecosystem functioning in the region for the purpose of creating a general idea of the sphere development in this area and its significance. Both responsible data processing and reporting was the task of the both international audit company PwC (LLC PricewaterhouseCoopers Advisory) and the marketing agency IRS Group joint work.
The number of survey respondents exceeded 7,000 specialists from the 36 most influential IT companies in the Kharkov city.
According to data collected by PwC, 445 active IT companies are currently in the city, 871 of which are officially registered with the Ministry of Justice. And the total number of officially employed specialists amounts to about 25,000, which brings the Kharkiv city (14% of the entire country industry) to 2nd position on the development among Ukraine cities.
The specialization distribution of IT-companies in the spheres of the most popular services
The demand for services internationally is based on the total data on the work of companies for 2017 in the report. The absolute majority of Kharkov IT-companies activities are export-oriented (95% of the industry’s annual income came from foreign customers). A significant difference in terms of demand is attributed to the lack of effective demand in the Ukraine domestic market. The Ukrainian specialists services are the most popular in the USA (65% of orders), European countries consume 25% (5% of which come from Ukraine) of the Kharkiv city outsourcing productive capacity, 5% of the IT services market is occupied by Middle East countries, 3% by Asia and 2% by both Australia and Oceania.
Geography of Ukrainian outsourcing demand around the world
The IT industry is distinguished by a large ratio of tax accruals to the state budget. So, 5 billion UAH have arrived to the state treasury from the Kharkov city companies in 2017.
In addition to the current situation comparative analysis, experts from PwC made a forecast for the Kharkov IT industry development in the near future. In financial terms, the IT industry’s profitability is expected to increase to UAH 14.6 billion in the Ukrainian economy by 2025.
The main problems the industry faces which and that need to be overcome on the way of development are also highlighted. The main difficulties of IT professional development in the Kharkov city are related to the specialized infrastructure evolutionary level in the city. Nowadays, there are shortcomings in the sphere of commercial real estate offers do not satisfying the existing demand of companies. Moreover, the full IT business system functioning is necessary to reform and intensively develop the educational complex, logistics, and research areas.
The overall study outcome is a good reason for both the city and local specialists to be proud of the list of achievements. However, further progress requires more work, overcoming all the identified problems, jointly coordinating IT industry business strategies of the second-largest professional hub of Ukraine.