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1 April, 2015

Doing IT Business in Ukraine

The basics to grow the entrepreneurial environment have already started in Ukraine

Ukrainian engineers have a good reputation all over the world for being creative, not afraid to give their opinion, not sitting back and waiting to be told what to do. Many international firms have established offices in Ukraine, and have helped spread the word about their experience in the country. Many Ukrainians, that left the country, have developed a reputation as excellent engineers and co-workers.

I have been working and investing in Ukraine for close to 19 years. Aside from this last year, with its own challenges, every location has its nuances for running a business, and many things have changed over the years. What I would like to see more of is increasing cooperation between the IT industry and the government by developing and making it more transparent in terms of taxes. Additionally, there should be more cooperation in terms of changes in education at the university level. The education base is excellent in Ukraine, and many universities have improved their computer science courses, but more improvements could be made across the entire system. Some of the options include adding more practical computer courses in the sought-after languages or the possibility for students to gain more credits for work experience in lieu of time spent in the classroom.

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Many cities in Ukraine have excellent universities. A lot of graduates look for opportunities to grow their career in and around where their families are, where they went to school, etc. Ivano-Frankivsk, for instance, is one of the cities that provide excellent quality of life (Softjourn’s development office is located in Ivano-Frankivsk while the head office is in California – Ed.). Companies that operate there can provide tech people with opportunities for growth.

Given the conflict in Eastern Ukraine, those tech companies which were located in the conflict area have relocated to other cities. Service providers and development companies elsewhere are certainly staying put and are growing in their current cities. Many IT-companies working in Ukraine experienced growth in 2014, despite the challenging situation.

However, almost all IT-companies which are able to, are putting in place contingency plans for their company’s operations and for that of their clients, which often includes opening offices in neighboring countries such as Poland, Bulgaria, etc. At the same time, this enables companies to grow as well as provide assurances that their operations can start up in another location more easily, if they end up in an office in Ukraine for some reason.

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There are many software product companies in Ukraine that develop products for the local market, as well as the international one. Product companies have been around for years and it is also not unusual for a service provider to have their own products. Many entrepreneurs are generating a lot of ideas and developing their own web or mobile applications. These applications do not require a lot of capital to build, so the start-upers can self-fund their development to at least get them to a point of growth. Additionally, there are a number of private equity firms in Ukraine which open up capital to start-ups; the capital may come from Ukraine or international groups. Also, to help entrepreneurs refine their ideas into fundable ideas or to help them organize their idea in to a business which they can fund themselves and grow it, there are a number of organizations providing training, ongoing seminars, mentors, and weekly conferences. The basics to grow the entrepreneurial environment have already started and we can expect that all three pillars needed to grow startups - ideas, capital and support - will continue to expand in Ukraine.

 


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