Ukrainian IT sector has been growing rapidly in recent years. However, in 2022 the industry was shaken by the Russian aggression against Ukraine.
Global community questioned if the country would survive. Despite the tremendous challenge, the industry got through. Moreover, it demonstrated growth. In this blog, we briefly highlight the key trends of the Ukrainian IT industry in 2023 and its nearest future.
I. Gross Revenue
Ukrainian IT sector has been experiencing significant growth in recent years.
In 2020, its gross revenue was estimated at $5.2 billion.
In 2021, it reached $6.9 billion, showing a growth rate of 32%.
Despite the challenges of the war in 2022, the Ukrainian IT industry continued to grow. In December 2022, the annual gross revenue reached approx. $7.35 billion, with a growth rate of approx. 6.5% compared to 2021.
Gartner forecasts global IT spending to grow 5.1% in 2023. This will positively impact the further development of the Ukrainian IT industry.
II. Challenges of War in 2022
Russia’s full-scale invasion since February 24, 2022, its aggression against the civilians, occupation of the Eastern and Southern parts of Ukraine, including the Crimean peninsula, and constant shellings of the critical infrastructure, undermined the country’s economy, challenging the IT sector, as well. However, the industry made necessary adjustments and went on.
Most Ukrainian IT companies re-focused on remote work. With employees unable to travel to the office due to safety reasons (curfews, blackouts, shellings of strategic infrastructure, etc.), remote work became a necessity. Paradoxically, this allowed them to save on office expenses to some extent.
At the same time, Ukrainian tech companies such as Grammarly, GitLab, Preply, and Reface continued their operations, attracting millions of users and investors worldwide.
As of 2019, there were 172,000 IT specialists in Ukraine’s IT industry. The number reached nearly 200,000 in 2020, and 250,000 by the end of 2021.
In 2022 there were approximately 240,000 IT employees in Ukraine. According to DOU, 13% of them relocated abroad because of the war. (The most popular destinations were Poland, Germany, Portugal, and Canada.) Respectively, the actual number of those who worked remotely in other countries was 31200 (13%). Thus, the industry grew to 271200 IT professionals in 2022, despite the challenges.
In terms of the number of IT professionals, Ukraine is expected to keep growing in the coming years.
III. Future Trends in the Ukrainian IT Sector
In 2023, the Ukrainian IT industry demonstrates a continued growth tendency. Here are the five trends that we expect to see in the industry in the nearest future:
- Continued focus on remote work: Remote work has proven to be beneficial for the IT industry, and we expect companies to continue to foster it in the coming years.
- Increasing use of AI and machine learning: AI and machine learning are becoming increasingly important in the IT industry in 2023. We expect to see more investments and efforts made toward these technologies.
- Increased demand for cybersecurity. In view of the hybrid war, digital safety, financial and other fraud, simultaneous with the increased reliance on technology, the role of cybersecurity will continue to be relevant. Consequently, the demand for cybersecurity services will remain high.
- Growth in the e-commerce industry. It has been growing rapidly in recent years, and this trend is expected to continue. As a result, we can expect to see increased investment in e-commerce technologies and services.
- Expansion of the fintech industry. It has been growing rapidly in recent years, and we expect this trend to continue. Especially due to the fact that more people move away from traditional banking services, enjoying the ease and speed of fintech solutions. (For example, Monobank is one of the success story examples known as a “cat-themed neobank” with more than 4 million customers. It remained resilient despite the challenges in 2022-2023.)
Ukrainian IT sector has been tested by the severe realities of the war in 2022. The industry passed the test, got adjusted, and continues to grow. We expect to see increased demand for cybersecurity and fintech services provided by the UA companies, more Ukrainian IT staff employed, a lot of remote work, and an increasing use of AI and machine learning.
The illustration is made by artificial intelligence.
For our analysis, we use trusted sources, such as IT Ukraine Association, Forbes UA, DOU.ua, and others.