UKRAINE

The country currently has over 300 outsourcing companies that export ITO services. Analytical company MarketVision, together with Gartner, estimated ITO services from the Ukraine to reach $150 million in 2005, which represents 50 percent growth in comparison to the previous year. The National Academy of Sciences employs almost 30,000 engineers and researchers.

Ukraine provided many top computer programmers to the former Soviet Union's space and military efforts, and much of that expertise has spilled over to the country's private sector. Rates charged for programming in Ukraine are cheaper than Russia. Research firm Market-Visio expected that application outsourcing in Ukraine will have grown 43% to $100 million in 2004.

The main prerequisites for active growth of Ukrainian IT Services export market are political stability of the state, increasing of the number of qualified IT specialists, active growth of the allied industries (telecom sector), advantageous geographical position of Ukraine, as well as a special status in collaboration with the European Union (visa-free regime).

Approximately 300 IT Companies that export software are working in the Ukraine. 30% of them have operated for for more than 10 years. There are about 20-25 major players in the Ukraine; they are mainly situated in Kiev, Lvov, Kharkov and Dnepropetrovsk. The market participants expect the IT Services export to double, with an average annual growth rate between 40 and 50%. The market growth is explained by Ukrainian government's initiatives to support the industry.

The number of IT specialists on the internal and external IT market varied between 20,000 and 25,000 in 2003. 30,000 IT-educated graduates annually access the labor-market. Taking into consideration the salary dynamics of Russian companies operating on the similar markets the salaries of Ukrainian programmers working on the export market is 30-50% less than that of the Russian colleagues of equal qualification. Well known firms which outsourced their IT and R&D functions to Ukraine include Siemens, Phillips, Alcatel, Flextronics, HP and many others.