Ukraine: Despite everything, the IT industry is recovering quickly from the first shock
Within weeks, Ukraine’s IT sector has developed into a major pillar of the country’s economy. After a brief reorientation, strong export growth is once again recorded here, bringing important revenues to the country. Before the invasion of Russia, the industry was doing extremely well. Over the past five years, export growth has averaged 28.3 percent.
IT exports even increased by 35.9 percent to $6.8 billion last year. The IT sector thus accounted for 8.4 percent of Ukraine’s total foreign trade. This was partly because Ukraine has well-trained developers who could be hired for little money compared to their colleagues in many western countries. And because many Ukrainian developers were already working from home for companies from Western Europe or the US, the industry proved stable even during the difficult Covid phase. The attack from Russia put an end to the development. According to data from the National Bank of Ukraine, foreign trade turnover fell by 4.4 percent in March comes forward
Concentration is difficult
In the days after the Russian forces invaded, it was unclear how things would develop. Many foreign clients, therefore, moved the work to Poland or the Baltic States at short notice. Where possible, projects were paused. However, this state of affairs did not last long. Things are now running smoothly again and the losses of the first few days have already been largely compensated.
For the entire first quarter, Ukraine’s IT sector posted foreign trade revenues of approximately $2 billion (down from just $1.5 billion last year). And 77 percent of IT companies in the country have already reported that they were even able to win new customers abroad after the start of the Russian attack. And this, although, of course, the situation is anything but simple. According to surveys of Ukrainian IT companies, productivity has dropped significantly.
After all, most workers work in more or less improvised conditions, having fled briefly to the west of the country or abroad. And worries about family and friends also mean that hardly anyone can fully concentrate on work. The security experts are also more concerned with digital national defense than with assignments from abroad. Nevertheless, the sector is recovering faster than expected and is already making an important contribution to improving the economic strength of the hard-hit country after just a few weeks.
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