Amidst the constant bombardment and regular blackouts, Kharkiv’s tech sector stood strong.

Situated just 30 kilometers south of the Russian border, Kharkiv, Ukraine’s second-largest city, has borne the brunt of Russia’s full-scale invasion – but the local tech companies have learned to adapt and overcome the adverse conditions, Olga Shapoval, executive director of the Kharkiv IT Cluster, said.

Speaking to Kyiv Post in an exclusive interview during Kyiv’s Tech Ecosystem Summit on May 3, Shapoval described how her NGO has helped local tech companies maintain business continuity.

“Now, for example, when [blackouts] appeared in Kharkiv… we coordinate all companies. We have special hubs of resilience.

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“We have special sharing places. Everybody. So if our specialists need to work, in 30 minutes, they can find any space and continue to work, continue to deliver the solutions for clients all over the world,” Shapoval said.

“Our clients from Israel... from the United States, they know that Kharkiv IT companies deliver no matter what.”

Nurturing local talent in wartime

Prior to the full-scale invasion, Kharkiv was one of Ukraine’s major academic hubs with a thriving university population, which has continued to nurture a new generation of tech specialists despite the war.

Among the companies with offices in Kharkiv were industry giants Gameloft, EPAM and SoftServe – all of whom are participants of Shapoval’s Kharkiv IT Cluster, an NGO aimed at developing Kharkiv’s tech scene and nurturing local talent.

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The Ukrainian President said the situation in the Kharkiv region has been "controlled" but "not stabilized" and called for more aid to combat Russia's air superiority.

“We have 15 universities [that] prepared software engineers. We would create a space underground for students who are studying software and other disciplines in Kharkiv,” Shapoval explained.

That said, despite having parts of their operations remaining in Kharkiv, most companies have diversified their resources.

“Approximately 30 percent of our specialists for each company [are] situated abroad. So all the risks are mitigated. Everything is working,” said Shapoval, though she also mentioned that locals have gradually started moving back.

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“Because when the full invasion started, our people relocated partly their teams to Ukraine and outside of Ukraine. Then people came back to Kharkiv. For example, in Kharkiv now, the population is more than 1.3 million people.

“So a lot of kids, a lot of youths,” she said.

Because for them, Kharkiv defense is something personal – it’s not about territory or some flag. It’s about home.”

Developing tech on the front line

Unsurprisingly, the war has had an impact on the local industry – though there are some positives.

“Before the full invasion, mainly 70 percent of our members were service companies – outsourcing, out staffing, IT consulting; 30 percent [were] different software products and startups.

“We as a cluster... doubled [the] quantity of our members during the full invasion... We keep growing, and we grow very fast because companies join us to survive,” Shapoval explained.

The war and Kharkiv’s proximity to the front have also given rise to new defense tech companies.

“But now we do have a lot of companies – like young companies – in [the] defense tech area. Because for them, Kharkiv defense is something personal – it’s not about territory or some flag. It’s about home,” Shapoval said.

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Shapoval said she could not showcase the companies due to the sensitive nature of defense tech, but she emphasized the local research and development (R&D) talent and how it has continued contributing to Ukraine.

“Even now, Kharkiv provides 30 percent of all projects in R&D for [the] whole Ukraine [...] even now, and 28 percent of taxes, which is paid from R&D to the state budget,” she said.

Kharkiv’s proximity to the front has also provided defense tech companies with a testing ground for their products.

It's one part of our mentality. It's very important to work. We cannot do nothing.”

“They can calculate, they can analyze, and they can test it because Kharkiv, unfortunately… we do have our test platform, 100km from Kharkiv... Our people can go there, test, see what [works], what does not work, and then improve.

And it’s not just the Ukrainian government that’s interested in Kharkiv’s defense solutions, according to Shapoval.

“Even now, our companies already sold a lot of projects to France, to other European countries because they understand that they need... new projects to defend themselves from potential threats,” she said.

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Europe might be able to learn from Kharkiv’s lessons as well. Shapoval said she was due to stand before hundreds of cluster managers in Brussels to share the lessons from Kharkiv, of how it has persevered despite the adverse circumstances. 

“We need to understand that for our people – for Kharkiv especially – it’s one part of our mentality. It’s very important to work.

“We cannot do nothing,” Shapoval said.

You can also read about Kyiv Post’s interview with the former director of the Ukrainian Startup Fund at the event here.

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