Seven Ukrainian information technology companies and Economy Minister Pavlo Sheremeta on April 3 announced the formation of a Brain Basket Foundation that hopes to raise $1 billion in investment to strengthen Ukraine’s position in the European IT market.
Plans include expanding the IT’s share in the overall amount of Ukrainian exports to $20 billion from $2 billion today, which would make the sector a leading exports industry. However, educational institutions are to supply 20,000 qualified workers annually instead of current 4,000 to make this goal realistic, according to the foundation’s statement. Improving the quality of education is the project’s number one goal.
Trond Moe, former Norwegian telecommunication company Telenor’s country manager for Ukraine, was named president of the foundation. The project involves Ciklum, SoftServe, Miratech, EPAM Ukraine, GlobalLogic, Luxoft Ukraine and IT Ukraine.
Ukraine’s educational market includes 234 higher institutions providing degrees in computer technology. Kyiv Polytechnic Institute is the largest among them. But only 44 percent of KPI graduates receive jobs in the IT sector, while the figure is as small as 10-20 percent in other higher education institutions. Kyiv Mohyla Academy is the only exception with 72 percent of IT graduates finding jobs relevant to their diplomas, according to IT Ukraine Assosiation research.
With more IT specialists coming, Ukraine may get a substantially larger stake on the European market. For instance, the EU applications market will grow from $23.9 billion to $86 billion, according to Gigaom Research forecast, while half of the market comes from outsourcing. According to the optimistic scenario, this industry will provide jobs to 4.8 million people by 2018 while more than 1 million are employed now.
This data shows that Europe will need more IT workers, Ciklum chief operation officer Roman Khmil told the Kyiv Post. “The more people we will train – the more orders from clients we will receive, because good IT specialists can always find a job on this fast-growing market,” he explained and added that his company is donating $100,000 to foundation.
Other project participants did not disclose the amount of their investments.
“We are ready to give our time and any consultation for this project and we support it very much, but we are not ready to talk about amount of financial support,” said Andriy Kolodyuk, Aventures managing partner and a foundation advisory board member.
“Now we are working out the plan of reforms in education, because nobody will provide money without a clear understanding of the path,” Ciklum’s Khmil said.
According to him, the foundation’s plan includes a five-year long program.
It takes $500 a month to train a qualified programmer, while the goal is to train 20,000 of them annually, thus $480 million are needed for organizing four-year bachelor programs. However, number of people will choose an option of one or two-year study which will increase the project’s financial needs up to $1 billion.
Ukraine’s IT sector is one of the fastest growing in Europe. According to Aventures, local IT outsourcing market consists of more than 500 companies that employ around 50,000 workers, whose exports in 2013 reached $2 billion. Samsung, Netcracker, Wargaming and other global companies – more than 100 of them – outsource their research and development projects in Ukraine, employing around 5,000 local workers.
Several Ukrainian startups have succeeded globally with Depositphotos, Jooble and Cupid among them. In October 2012, Google paid $30 million for Viewdle, image recognition service founded by KPI professors and graduates. Near 500 startups enter the Ukrainian market each year, according to Denys Dovgopolyi, founder of Growth Up startup incubator. Other analogous incubators include Eastlabs and Happy Farm in Kyiv and Wannabiz in Odesa.
Noteworthy, Ukrainian IT workers receives an average annual salary of $21,000, while his American peer gets $92,000. This creates competitive advantages for Ukrainian IT engineers, whose deep expertise is well-known on the global market, said Evgen Sysoev, Aventures managing partner.
Kyiv Post staff writer Vladyslav Golovin can be reached at [email protected].
