INNOVATIVE UKRAINE 2019 - Strategeast
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INNOVATIVE
UKRAINE
2019
INNOVATIVE UKRAINE
4 INTRODUCTION
5 EXECUTIVE SUMMARY
6 IT INDUSTRY OF UKRAINE
10 UKRAINIAN HIGH-TECH INDUSTRY
HIGHLIGHTS
12 INTERNATIONAL RANKINGS
14 TRENDS
16 INVESTMENTS
19 COMPANIES
22 R&D
24 GOVERNMENT
25 ECOSYSTEM INITIATIVES
29 TALENT POOL AND EDUCATION
32 DESTINATIONS IN UKRAINE
35 OTHER INDUSTRIES
48 MEASURES ON IT DEVELOPMENT IN UKRAINE
51 ESTIMATED EFFECTS OF THE ABOVE
MEASURES
52 RECOMMENDATIONS TO THE WESTERN
POLICYMAKERS
53 NOTES
54 LIST OF SOURCES
3
EXECUTIVE SUMMARY
• Ukraine’s IT industry has become one of the proving the process of destructing counterfeit
factors driving the country’s economic growth: goods, adopting a law establishing the Nation-
the industry’s exports totaled $4 billion USD, al Authority on Intellectual Property of Ukraine,
or 9% of the country’s total exports. In 2018, and intensifying international cooperation at
investments into the IT industry reached $337 the highest level through the facilitation of a
million USD, which amounted to 14% of the consistent dialogue between the Presidential
total foreign investments. These results were Offices of Ukraine and the USA.
Dmytro Yeromin
UNIT.City, Managing Partner achieved with the efforts of 184,000 persons • Among other measures the government must
employed in the IT industry (1.2% of the na- implement to create the conditions for accel-
tion’s total workforce). erated growth of the IT industry are: establish-
• Ukraine’s IT industry continues to exhibit rapid ing the legislative framework for software de-
growth: in the last five years, its export volume velopment on a “customer-owned” basis (i.e.
has doubled, total investments quadrupled, when software is developed in Ukraine but is
and every year Ukrainian universities turn out the property of a nonresident customer), in-
23,000 new IT specialists. The IT industry also stituting a government loan program for the
fuels the growth of related industries, such education and training of IT specialists, and
as biotech, agrobiotech, pharmabiotech, and optimizing the process of employment for for-
Anatoly Motkin
aerospace. The further growth of the IT indus- eigners in Ukraine.
INTRODUCTION StrategEast, President
try is restrained by several systemic factors: a • The implementation of these measures by
This report is the joint product of UNIT.City, the As a typical Eurasian country whose economy is in flawed state system of protecting intellectual the Ukrainian government would additionally
largest IT cluster in Ukraine, and StrategEast. We transition, Ukraine is along the path leading from property (Ukraine is included in the Special accelerate the growth rate of Ukraine’s GDP
have decided to join our efforts because we share a natural resource-based economy to a knowl- 301 Report Priority Watch List), far-from-per- by 1-2% per annum, increase the exports of
the understanding of the great importance that the edge-driven one. Our goal is to facilitate the ac- fect customs legislation as it concerns IT, ab-
IT industry plays in the development of Eurasian celeration of such transition by developing the IT Ukraine’s IT industry by $1-1.5 billion USD, cre-
sence of a uniform government policy or state ate 30,000-40,000 new jobs, and bring $80-120
states. industry in Ukraine. system of supporting education in the field of million USD in additional tax revenues to the
For these young states, where reforms are un- Incorporated in this report is an in-depth under- IT, and excessive bureaucratization which ob- Ukrainian budget every year.
der way, the IT industry is not simply a source of standing of the Ukrainian IT industry and of the structs the employment of highly-skilled for-
substantial export revenues and well-paid jobs. Its obstacles that are restraining its growth. This un- eign specialists in Ukraine. • We recommend Western policymakers, inter-
role is paramount: it becomes a point of intersec- derstanding is based on the everyday experience national financial institutions, and represen-
• The improvement of the intellectual property tatives of the global IT industry to provide the
tion for young specialists and the Western world. of the UNIT.City experts. The report then proposes protection system in Ukraine would help in-
By choosing a career in the industry, IT specialists the ways for the Ukrainian IT industry’s integra- following support to proposed reforms for the
crease the number of orders placed with the Ukraine’s IT industry: endorse legislative ini-
maintain close and constant interaction with their tion into the global ecosystem and recommends
Ukrainian IT industry by Western companies. tiatives related to the reorganization of the IP
Western colleagues, adopt the Western corporate an action plan for Western policymakers, financial
The key measures the Ukrainian government protection system, explore the possibility of
culture, and integrate into the global IT industry. institutions, and global IT companies, which they
This means operating in a world where rules are can follow to facilitate the global integration of the must take to develop intellectual property pro- co-funding a special Ukrainian state loan pro-
shared by all countries and where values such as Ukrainian IT industry. Those proposals and recom- tection system include: reorganizing the sys- gram to fund education in the IT industry, in-
the rule of law and IP protection rights are an inte- mendations are based on the extensive interna- tem for collective management of proprietary corporate the development of the Ukrainian IT
gral aspect of society. As the IT industry in Eurasian tional experience of StrategEast. copyright and related rights, legislative defini- industry into foreign policy agenda, and stimu-
states develops, a constantly increasing number of We are sure that our joint report will be of great tion and consolidation of the specific principle late investments by Western IT companies into
young people will adopt those values and spread use to anyone who is interested in the success of IP rights exhaustion, working on the pro- the Ukrainian IT industry.
them to all other areas of their life, thus also raising of economic and social reforms in Ukraine and is cedure of customs clearance suspension, im-
the bar for the government and non-governmental committed to making Ukraine a prosperous coun-
institutions in their countries. By this the IT indus- try with Western values.
try greatly contributes to the transformation of the
public sector and society in the Eurasian states in
accordance with the principles of transparency and
accountability.
4 5
Specialization of large IT companies, by the number of employees
80-200 200-800 800+
Services 70 43 14
Products 15 10 4
GIC 14 16 0
Total 99 69 18
According to the official data around 50% of the the companies reside in Kharkiv, Dnipro, Lviv
companies are registered in Kyiv. Also a lot of and Odesa.
Photo credit: UNIT.City
IT-related legal entities by the city, in %
UKRAINE’S IT INDUSTRY
According to the official records of the first half ing companies may be lower. At the same time Odesa 4.5
of 2018 there are 12,534 IT-related legal enti- one company may own a few different legal en-
ties registered in Ukraine. It is worth noting that tities simultaneously, which may also affect the Lviv 5.0
liquidated companies are also accounted in the official statistics, which represents a number of
statistics, therefore a number of actually operat- legal entities on the whole. Dnipro 6.0
Kharkiv 7.5
A number of IT-related legal entities registered in Ukraine in 2014-18, in thousands
14 Others 25.4
12,6
12
11,7 Kyiv 51.7
10,9
10,2 0 10 20 30 40 50 60
10 9,6
9,0
8,2 8,5
8 7,6 The Ukrainian IT industry is a successful compet- exports and economy on the whole, the IT in-
7,2
itor on a global market and is a reliable source dustry has been showing a stable growth of
6 of foreign currency revenue which strengthens 11-26% annually.
the UAH currency. Thus, despite the decline in
4
IT services export in the 1st and 2nd half, USD mln
2
3500 forecasted
0
H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 3000
2500
According to unofficial data there are around range of clients (EPAM, GlobalLogic, Netcrack- 2000
4,000 companies, majority of which have 80 em- er and others), around 15% work as Global In- 1500
ployees or less, however a lot of people work in House Centers (GIC) for one parent company 1000
companies with over 80 employees. 2,309 com- (Wargaming.net, Ring, Samsung R&D Institute
500
panies are active on the labor market. Ukraine, Oracle) and 15% create their own prod-
uct (Genesis, EVO, Terrasoft). 0
A sampling allows us to assume that around 2013 2014 2015 2016 2017 2018
70% of companies provide services to a broad
6 7
Therefore, the importance of IT services in 50% comes from the USA, the UK is on the sec- with individual entrepreneurs, a unified tax paid also 3.4 bigger than individual income tax per
Ukraine’s export structure is growing. For in- ond place. Ukrainian companies also have a long by an active individual entrepreneur is also tak- one employee on the average in the country.
stance, IT services were 3rd in Ukraine’s export record of cooperation with Germany, Canada, Is- en into account. Nevertheless, its size in IT was
of services after the services of processing of rael, Sweden, and Switzerland. Despite positive
goods and pipeline transport. trends the Ukrainian market still cannot boast a
State tax revenue per one employee, UAH thousands
large amount of orders.
According to a survey of IT companies, the abso-
50
lute majority of revenue is of foreign origin. Over
40
30
>50% USA 20
UK
10
0
Other Countries 2013 2014 2015 2016 2017
Canada Ireland individual income tax on the average in Ukraine
Cyprus Israel Sweden individual income tax in IT in Ukraine
Germany Norway Ukraine unified tax in IT in Ukraine
Netherlands
Such growth is accompanied by an increase in yearly and reached UAH 4.1 bln. This trend re- According to surveys IT companies spend one person is USD 2.5K, which provides a 13%
tax revenue. On average tax revenue from IT mains valid in 2018 as well: tax revenue grew by around USD 2.2K per one person per month on margin.
companies in 2014-17 has been growing by 27% 30.1% in the first half of the year. the average, while average company income per
State tax revenue from legal entities, 1st and 2nd half of the year, UAH bln Average income, expenses and margin in IT companies per person
5 per 1 month, USD thousands
20% 11% 12% 13%
4 3
2,5
3 2,7 2,7
2,4 2,5
2 2,5 2,2
2,2 2,2
2 1,5
1
1
0,5
0 0
2014 2015 2016 2017 2018 2014 2015 2016 2017
Expenses per person Income per person
Tax revenue per 1 employee in IT was substan- in IT was 3.7 times higher than on the average in
tially higher than on the average in the country. the country. Since instead of traditional employ-
*Note: some information can be duplicated on further pages
An individual income tax paid by those employed ment a lot of IT companies widely use contracts Source: Ukrainian IT Industry Report 2018, IT Ukraine Association, BRDO
8 9
UKRAINIAN HIGH-TECH
INDUSTRY HIGHLIGHTS
• More than 184,000 highly skilled program- • 43 place in the ranking of the most innova-
mers; tive countries in the world (Global Innova-
tion Index 2018);
• 4th place in the world (after the USA, India
and Russia) by the number of certified IT • 53d country by the level of innovation of
specialists; the economy (Bloomberg Innovation Index
2019);
• $337 million venture investments in 2018;
• 58th country in the digital competitive-
• $25 million value of M&A deals in 2018; ness rating (IMD World Digital Competi-
• 16 exits in 2017, 8 exits in 2018; tiveness 2018);
• 20+ investment funds; • 64 place by the level of ICT development
(Networked Readiness Index 2016);
• At least quarter of world-leading compa-
nies in the field of software development • About 150 higher education institutions that
for mobile platforms have their offices in annually prepare 23,000 IT specialists;
Ukraine; • More than 140,000 patents and utility mod-
• $4 billion IT export volume in 2018 (4% els over the past 10 years (10-15 thousand
of GDP); per year);
• 16 companies in The 2019 Global Outsourc- • More than 100 Fortune 500 companies
ing-100; which choose Ukrainian IT services;
• 24th most attractive software development • More than 110 R&D centers of the world-
country; known international companies;
• Global Sourcing Association named Ukraine • More than 1,000 events for IT-specialists,
the Offshoring Destination of 2017; start-ups and investors every year.
• 43 place in the world by the number of start-
ups (Startup Ranking 2018);
11
Photo credit: UNIT.City
INTERNATIONAL
INNOVATION
RANKINGS Top 50 most Innovative Countries Top 60 Digital Courtiers
Global Innovation Index 2018 – 43 place. The IMD World Digital Competitiveness Index 2018 –
• This is the highest ranking of the GII that 58 place.
Ukraine has attained. • Strong points: starting a business, the speed
• Ukraine is in the category of Innovation achiev- of Internet connections, e-democracy, use of
ers for 5 years in a row. large data, the quality of education.
Top 60 most Innovative Countries Top 65 most ready countries
Bloomberg Innovation Index 2019 – 53 place. Networked Readiness Index 2016 – 64 place.
• Ukraine maintains a high position on the effec- • Strong points: infrastructure and digital con-
tiveness of higher education and patent activ- tent, affordability, skills.
ity.
1st in Science and Technology
Top 50 Startup Ranking The Good Country Index 2018 – 75 place, 1st in Sci-
Startup Rankings 2018 – 43 place. ence and Technology.
• In the world by the number of startups. • Strong points: international students, journal
exports, international publications, Nobel priz-
es, patents.
OUTSOURCING
1st Outsourcing market in Eastern Europe Top 50 in outsourcing activities
• Ukraine is ranked as number one for out- A.T. Kearney Global Services Location Index 2017 –
sourcing markets in Eastern Europe 24 place.
by Outsourcing Journal. • Strong points: financial attractiveness, people
skills and availability.
Top 30 offshoring and outsourcing destina-
tions Offshoring Destination of the 2017 Year
• Ukraine has consistently featured in Gartner’s The GSA UK Awards 2017
top 30 offshoring and outsourcing destinations • The abundance of highly-qualified developers,
for the past 7 years. competitive prices, rapidly developing busi-
ness, and IT infrastructure made Ukraine an
Offshoring Destination of the Year.
TALENT AND EDUCATION
Top talent pool country in CEE, 4th globally at Math
4th globally • 4th place at International Mathematical Olym-
• 1st in the CEE by the number of IT specialists piad.
and engineers; • Ukraine has remained in top 30 countries world-
• 4th globally by the number of certified IT wide in the past 10 years
specialists.
6th by TopCoder
Top 65 most talented countries By Programmers Activity
Global Talent Competitiveness Index 2018 –
63 place world wide, 32 place in Europe. 8th by SkillValue
• Strong points: vocation- By Best Programmers
al and technical skills, retain, grow.
8 13
Photo credit: UNIT.City
Number of investment transactions
140
TRENDS 120 115
100 89
86 87
80 71
66
60
40
20
0
2013 2014 2015 2016 2017 2018
INVESTMENT VOLUME IN STARTUPS
Photo credit: UNIT.City
• However, since 2016, the figures are steadily • In 2018 investments in startups amounted to
growing. about $337 million.
EXPORTS OF IT SERVICES • In total over the last six years, investments
in startups amounted to about $955 million.
• Since 2013 the volume of IT services export • IT industry took 2d place according to export Investment volume in startups
has steadily increased and reached $4 bln in volumes in 2018. 400
337
2018. 350
259
300
• The contribution of industry to GDP of Ukraine - 250
4% in 2018F. Exports of IT services
$ mln
200
132
4,5 4,0 150 88
97
4 3,6 100
3,1 42
3,5
50
3 2,6
2,4 0
2,5 2
$ bln
2013 2014 2015 2016 2017 2018
2
1,5
1
0,5 • There are 300-500 new startups in Ukraine • The number of investment funds has in-
0 annually. At the end of 2017, there were creased, for example, Overkill and Arkley VC
2013 2014 2015 2016 2017 2018F about 2,000 high-tech startups in Ukraine. funds have joined the search for startups for
According to Startup Ranking, Ukraine ranks investments in Ukraine over the past years.
43rd in the world by their number. Western NIS Enterprise Fund (WNISEF)
launched U.Ventures fund for investment in
NUMBER OF INVESTMENT TRANSACTIONS • The rapid increase of exits began in 2016,
IT startups. According to 2017 data, there
if earlier there were isolated cases, then in
were 33 investment funds in Ukraine, includ-
• 115 investment agreements with innovative • The number of deals and the volume of in- 2016 there were 8 exits, in 2017 – 16, in 2018 -
ing corporate and private ones.
companies worth $337 million were con- vestments grow not proportionally. So, in 8. Also, in 2017 there were 19 successful
cluded in 2018. 2015 there was a rapid increase in invest- ICOs, during which $160 million was attract-
ment volume with a decrease in the number ed, in 2018 – 8 ICOs with app. $58 million at-
• The prevalent number of funds operating in tracted.
of transactions.
Ukraine focused on the Seed stage.
Source: Ukrainian Venture Capital and Private Equity Overview 2018, UVCA; Tech Ecosystem Guide to Ukraine 2019; IT Ukraine Association, 2017
14 15
INVESTMENTS
THE MOST ACTIVE INVESTORS 2018*
Photo credit: UNIT.City
TOTAL CAPITAL INVESTED
• Total capital invested in 2018: $336.9m*, ex- • The largest deal of 2018 was done by GitLab –
ceeding 2017 by 1.3 times a system for managing program code repos-
itory, with $100m raised at growth stage.
• Round A stage: $18.4m
CROWDFUNDING PLATFORMS AND GRANTS
• Round B stage: $30m 337
• Growth stage: $180m 3
• Undisclosed deals: $86.9m 259
87
3
6 7 5
76
132
180
89 88 grants campaigns** grants
140
59 $251.8k $1.4m $70.9k
39 101
24 22 29
12 20 30
51
33 22 9 18,4
8 38 35
16 15 15 18 22 18
5
2011 2012 2013 2014 2015 2016 2017 2018
*by number of deals and exits
**startups from only technology and internet sectors were included
Pre-seed Seed Round A Round B Growth Undisclosed Other Source: Ukrainian Venture Capital and Private Equity Overview 2018, UVCA; Tech Ecosystem Guide to Ukraine 2019
16 17
TOP DISCLOSED DEALS 2017-2018
Company Deal value, Investors COMPANIES
$mln
GitLab 130 GV, ICONIQ Capital, Khosla Ventures and Goldman Sachs
Grammarly 110 General Catalyst, IVP, Spark Capital
BitFury 110 Credit China Fintech Holdings, Korelya Capital, Naver Group,
Macquarie Capital, Dentsu, Armat Group, Lian Group and iTech
Capital
Photo credit: UNIT.City
Neuromation 70 ICO
People.ai 37 Andreessen Horowitz, GGV Capital, Lightspeed Venture Partners,
Index Ventures, Shasta Ventures, Y Combinator and SV Angel STARTUPS
• There are 300-500 new startups in Ukraine • According to Startup Ranking, Ukraine ranks
Rentberry 30 ICO annually. 43rd in the world by their number.
• At the end of 2017, there were about 2,000
DMarket 25 ICO
high-tech startups in Ukraine.
Remme 20 ICO
Propy 15.4 ICO
Company
YayPay Deal13.7
value, QED Investors, Birchmere,Investors
Information Venture Partners, QED, THE MOST PERSPECTIVE STARTUPS
$mln Gaingels 500 Fintech Fund and Fifth Third Capital
Petcube 10 Almaz Capital, Y Combinator, AVentures Capital, U.Ventures,
Digital Future and others
TAAS 7.9 ICO
DreamTeam 6 ICO
CallPage 5.5 Innovation Nest, Market One Capital and TDJ Pitango Ventures
Allset 5 Greycroft, Andreessen Horowitz, Vaizra Investments, Compound,
FJ Labs and SMRK
Restream 4.5 Silverton Partners, Anorak Ventures, COLOPL, K Cube, Liquid2 THE MOST SUCCESSFUL PRODUCT COMPANIES
and James Armstrong
Preply 4 Nine Point Capital and others
Hacken 4 ICO
Busfor 4 Vostok New Ventures
Spinbackup 1.5 bValue VC, TMT Investments, angels
Source: Ukrainian Venture Capital and Private Equity Overview 2018, UVCA; Tech Ecosystem Guide to Ukraine 2019
18 19THE LARGEST SERVICE COMPANIES
Photo credit: UNIT.City CEE REGION SOFTWARE DEVELOPMENT
• Software development market in Ukraine, • Over 580K professionals serve the market
SERVICE COMPANIES Poland, Belarus and Romania grows x4-5
faster than globally, with the US and the EU • The market is highly fragmented with many
• 750+ IT Service Companies, 245 with 50+ • By the quality and effectiveness of freelance
being the main customers small companies and just a handful reaching
employees workers in digital environment ranked 7th in
USD 200M mark in annual revenue
the world, as well as 11th in the top 50 devel-
• IT service export volume in 2017 - $3.6 bln, • $13B+ Total IT Exports generated by the re-
opers in the world. • Largest players are likely to become IPO
2018F - $4.5 bln. 70% of export – develop- gion
candidates within the next five years
ments, 30% - consulting, R&D, etc. • The 2019 Global Outsourcing 100 included 16
• $5B+ Revenues generated by 477 companies
Ukrainian IT companies and companies with • The sector presents hot market for M&A ac-
• Among the 55 most attractive coun- in the 4 countries
offices in Ukraine: EPAM, Ciklum, ELEKS, tivity, with over 70 deals in 2015 – 2018
tries for the development of software, Luxoft, N-iX, Miratech, Intetics, Softjourn,
Ukraine ranks 24th. According to the Sigma Software, TEAM International Ser-
IT export volume – the 1st in Europe. vices, Program-Ace, Softengi, Infopulse, In-
tellias, Svitla, AMC Bridge.
• Ukrainian IT service companies offer a wide • An absolute majority does web and mobile
range of services. application development, followed by archi-
tecture consulting and testing services
Source: Software Development in Ukraine, Poland, Belarus and Romania in 2019
Note: Companies presented on this slide are examples. The slide does not represent any ranking within respective categories
20 21R&D
Photo credit: UNIT.City
• There are more than 110 R&D centers in • Many international companies that have
Ukraine. R&D centers in Ukraine (Samsung, Siemens,
Sitecore, Aricent) have started with one of-
• Ukraine’s largest R&D partner is the United fice and later either expanded the number
States (45% of companies), followed by Eu- of employees in one office, or opened one/
rope and Israel. several new offices in one of Ukraine’s major
• The areas of expertise of Ukrainian R&D cen- IT hubs.
ters include games, e-commerce, big data • More than half of R&D centers are located
and AI, telecommunications, IoT, software in Kyiv. The major research centers are also
and e-commerce. Dnipro, Lviv, Kharkiv, Odesa and Vinnytsia.
INTERNATIONAL R&D IN UKRAINE
• Kyiv – 52+
• Odesa – 23
• Lviv – 14
• Dnipro – 14
• Kharkiv - 11
Source: Software Development in Ukraine, Poland, Belarus and Romania in 2019 , N-iX Research, 2017 Source: IT Ukraine from A to Z, 2015
22 23GOVERNMENT ECOSYSTEM INITIATIVES
Photo credit: president.gov.ua Photo credit: UNIT.City
• Ukraine has a separate executive body in- • In May 2018, the Ministry of Economic De-
volved in implementing the digital strategy velopment announced a course to support
ASSOCIATIONS
of the Cabinet of Ministers “Development startups at the state policy level. Branch professional associations in Ukraine:
of Ukraine” - the State Agency for e-Gover-
nance. • In July 2019 State Startup Fund was launched, • IT Ukraine Association • European Business Association (EBA)
which is allocated UAH 390 million from the
• In addition, there is a panel of experts that state budget. • Ukrainian Venture Capital and Private Equity • Blockchain Association of Ukraine
coordinates the needs of industry and gov- Association (UVCA)
• UAngel
ernment experts in implementing reforms. • American Chamber of Commerce (ACC)
STATE LEVEL INSTITUTIONS
CITY LEVEL INSTITUTIONS
24 25CLUSTERS ACCELERATORS AND INCUBATORS
There are 16 IT clusters in Ukraine, the most sig- • As more and more startups are being found- • New trend in Ukraine — acceleration pro-
nificant of which are located in Kyiv, Dnipro, Ode- ed in Ukraine every year, the infrastructure grams launched and sponsored by major
sa, Kharkiv, Lviv, Lutsk, Ivano-Frankivsk. around them is catching up as well. corporations.
20 IT companies is an average number of IT
cluster members. Lviv IT Cluster is the largest in № Accelerator/Incubator Industry
Ukraine, uniting over 80 members. 1 Radar Tech Telecom, Energy, FinTech, Agro
• Kyiv IT Cluster 2 MHP ACCELERATOR Agro
• IT Dnipro Community 3 Concepter Hardware
• Odesa IT Cluster 4 Ukrinnovate Defense
• Kharkiv IT Cluster 5 IoT Hub Accelerator IoT
• Lviv IT Cluster 6 1991 Open Data Incubator Open Data
• LITaC: Lutsk IT Cluster 7 GrowthUP Business
• Ivano-Frankivsk IT Cluster 8 Sector X Big Data, VR/AR, IoT, AI, Machine learning
9 AgroHub Agro
COWORKINGS AND HUBS 10 Sikorsky Challenge business incubator Business
• There are more than 100 coworking spaces • The overwhelming majority is focused on IT
in Ukraine, most of which are located in Kyiv. specialists and startups, and besides space LABORATORIES
for work, workshops, conferences and net- • Professional events and hubs are used for the basis of which there are thematic events.
• In addition to the capital, coworkings are working, one can find mentoring programs
gaining popularity in Lviv, Odesa and Kharkiv. networking, as well as laboratories, where For example, you can prototype new hard-
or support from large companies.
the equipment and people who are already ware products or create applications for vir-
working in this field are concentrated, and on tual reality.
№ Coworking or HUB City
№ LABs Industry
1 UNIT.City Kyiv
1 Sensorama Lab VR/AR
2 Platforma Kyiv
2 DIY Lab Prototyping, 3D-printing
3 Chasopys Kyiv
3 FabLab Fabricator Prototyping, 3D-printing
4 HUB 4.0 Kyiv
4 Syngenta Agriculture
5 iHub Kyiv, Lviv, Vinnytsia, Chernihiv
5 ARTKB Hardware
6 Impact Hub Odesa
6 BlockchainLab Blockchain
7 ITEA Hub Lviv
7 IZOLAB Digital, ART
8 Startup Depot Lviv
8 Lampa Electronics
9 Spalah Kharkiv, Dnipro
9 America House Makerspace Prototyping, 3D-printing
10 Fabrika.space Kharkiv
10 Sikorsky Lab Prototyping, 3D-printing
26 27EVENTS
• Ukrainian IT professionals eagerly share events and active community life. In 2018, TALENT POOL AND EDUCATION
their knowledge and try to master new tools the events attracted more attendees, more
and technologies. So there are a lot of IT famous speakers and covered more topics.
№ Event City Number of
participants
1 iForum Kyiv 12,000
2 Kyiv Outsourcing Forum Kyiv 2,000
3 Lviv IT Arena Lviv 3,300
4 ITEM Dnipro 1,600
5 IT Weekend Ukraine Kyiv 5,000
6 Mobile Beach Conference Odesa Odesa 1,200
7 SaaS Nation Kyiv 500
8 JEEConf Kyiv 1,000
9 Devoxx Ukraine (former JavaDay) Kyiv 1,000 Photo credit: UNIT.City
10 UNIT Fintech Forum Kyiv 1,000
IT SPECIALISTS
COMMUNITIES
• Ukraine has 1st place in CEE by the number • So today there are over 184,000 specialists
• There is an increasing number of communi- • Participants organize conferences and meet-
of IT specialists. working in the country’s IT industry. Such
ties and associations by interests or special ings, profile events, share experiences, find
impressive progress even beats the rates
themes. partners and clients. • 2018 has brought over 30,000 more IT spe- of the period before the crisis of 2007-2008.
cialists, which shows 26% annual growth of Moreover, by 2020 the industry will have over
№ Community Participants* the Ukrainian engineering talent pool. 240,000 employees.
1 UTEW - Ukrainians at Tech events of the world 2,600
2 Data Science UA 3,800
3 Test UA startups 970
4 PM community 1,560
5 Bitcoin Foundation 3,080
6 UNIT Residents Club 470
7 SaaS Nation Community 770
8 IT community 980
9 IT Directors of Ukraine n/a
10 DOU 290,000
Source: N-iX Research, 2017; IT Ukraine Association, 2017, DOU
*According to FB 2018
28 29• Despite the ever-increasing number of IT • The number of reviews increased by 23%
№ University Number of Number of Tech
professionals, market demand for them compared to last year - from 270 thousand
continues to grow. to 330 thousand. The number of companies graduates graduates
that post vacancies increased by 38% - from 1 NTUU “Kyiv Polytechnic Institute” 30,000 4,314
• The number of vacancies published on DOU 2,419 to 3,339.
has grown one and a half times a year, from 2 Taras Shevchenko National University of Kyiv 25,000 1,324
3,111 to 4,606 per month.
3 State University of Telecommunications n.a. 1,100
4 Kharkiv National University of Radioelectronics 11,000 2,968
New vacancies per year
New vacancies per year
5 NTU "Kharkiv Polytechnic Institute" 22,000 2,105
60000 55,438
6 National Aerospace University "Kharkiv 8,000 1,296
50000 Aviation Institute"
37,742 7 Lviv Polytechnic National University 30,000 2,675
40000
8 Oles Honchar Dnipro National University 20,000 842
30000 25,150
9 National Aviation University 50,000 1,692
20000 17,202
10 Odessa National Polytechnic University 15,000 1,366
10000
0 SPECIALIZED EDUCATION
2015 2016 2017 2018 • IT Clusters working in major Ukrainian IT cit- als. As a result, the number of IT schools is
ies cooperate with the local universities and growing with 43K+ graduates per year.
IT companies to launch new educational pro-
grams and set up innovation labs at schools • While most schools offer traditional courses
• Ukraine is 4th in the world by the number of and colleges. like PHP, Java, Python and mobile, the new
14%
certified technical specialists; entrants specialize in niche languages and
QA/QC
• Amid increased demand for talent, more emerging tech stacks like Big Data.
• It is 1st in CEE by the number of talents; testers
companies seek to hire junior profession-
52%
• 23,000 annual engineering graduates; developers 6% № IT Courses and Schools Number of
Manage
• 87% of Ukrainians obtained higher educa- r graduates
tion, and 61% of IT specialists have STEM
• 13% of Ukrainian IT specialists have over 10 1 Computer academy "STEP" 95,000
degrees;
years of experience, 16% – 6-10 years of ex-
2 Main Academy 6,000+
• 79% of IT professionals working in the coun- perience, and 27% – 3-5 years of experience.
try speak English; 3 CyberBionic Systematics 3,000**
4 GoIT 2,000**
5 UNIT Factory 900*
HIGHER EDUCATION
6 uData School 90*
• IT education is provided by 150+ higher edu- • 83% of IT Specialists in Ukraine have com-
cation institutions of different forms of own- pleted higher education at a university, of 7 SoftServe IT Academy 1,600**
ership in all major cities of the country. which 56% focused their studies on either 8 Sigma Software University 600**
programming or specific sciences.
• 58% of women and 64% of men have higher 9 QALight 8,000+
IT education in Ukraine. • There is recognition of strong basic math
and science education in Ukraine, as well as
10 Ukrainian IT School 1,600**
problem solving skills. *number of students, **annually
Source: DOU, Software Development in Ukraine, Poland, Belarus and Romania in 2019; Tech Ecosystem Guide to Ukraine 2019
30 31• Kyiv is the most attractive destination for
DESTINATIONS IN UKRAINE opening an R&D center in Ukraine due to its
favorable geographical location and 2 air-
ports with regular flights to major European
cities. Such global companies as Microsoft,
Samsung Electronics, Wargaming, Boeing,
eBay, Siemens, IBM have R&D centers in
Kyiv.
KHARKIV
• Kharkiv is the 2nd largest city in Ukraine with • In 2015, Kharkiv has made a big step towards
developed IT infrastructure. Over 22,000 spe- the development of its IT infrastructure by es-
cialists work in the software development tablishing a non-governmental organization
sector in the city, which is around 16.2% of Kharkiv IT Cluster. It is supported by major
all IT resources in Ukraine. Ukrainian companies, local authorities and
technical universities. They have united their
• The city is a home to more than 20 high- efforts to develop the city’s IT ecosystem.
er educational institutions, 5 of which have
technology and engineering faculties. Cur-
rently, more than 200,000 students study
in colleges and universities in Kharkiv with
more than 2,000 IT graduates every year.
Photo credit: Alexxx Malev
• Kharkiv is also an attractive destination for
opening an R&D center. Global companies
like Plarium, Mirantis, Gameloft, Grid Dy-
• Ukraine has a well-established reputation as in top 10 emerging-market locations for off- namics, TOA technologies, Huawei, Maxy-
one of the leading IT destinations in Eastern shore services. miser and SightPower have already opened
Europe. their R&D.
• Thanks to the abundance of highly-qualified
• Global Sourcing Association named developers, moderate prices, rapidly devel- LVIV
Ukraine Offshoring Destination of the Year oping business and IT infrastructure, the
2017. country attracts numerous global companies • Lviv is ranked the 3rd biggest IT hub in na, GDG DevFest, and Lviv Outsourcing Fo-
looking for a software development partner. Ukraine comprising 10% of the Ukrainian rum. Speakers from such global companies
• PwC ranked Ukraine 5th among Top 25 IT IT resources. The city concentrates mov- as Facebook, IBM, Fitbit, Microsoft, Clever
services exporters, and Gartner included it er 20,000 qualified IT software developers. Cloud, Deloitte Digital HP, SAP, Epson, and
Amazon have participated in these events.
• More than 192 IT companies are located in
KYIV Lviv.
• The city boasts Ukraine’s largest IT talent pool tional University of Kyiv, National University
comprising over 40,000 specialists in the IT of “Kyiv-Mohyla Academy”. • Lviv boasts a well-developed technical edu-
outsourcing sector, which is around 46.6% of cational system, which includes 10 colleges
all resources in Ukraine. • There are numerous possibilities to en- and 7 higher technical educational establish-
rich knowledge or share it with colleagues, ments. Currently, more than 12,000 IT spe-
• The city has a strong educational system thanks to the abundance of various tech cialists are studying in Lviv. Around 5,000
with 68 universities that prepare future IT events. They include big conferences like engineers graduate from Lviv educational
professionals. The 3 top-rated technical uni- IForum, IT Talk Kyiv, JEEConf, IT Weekend institutions every year.
versities located in Kyiv include NTUU “Kyiv Ukraine, IDCEE.
Polytechnic Institute”, Taras Shevchenko Na- • Lviv is one of the main destinations to host
various large-scale IT events like Lviv IT Are-
32 33DNIPRO
• Dnipro is the 4th largest IT destination by • Dnipro is the second by the number of R&D
the number of IT specialists in Ukraine.
Around 9,000 IT professionals are engaged
centers in Ukraine. The region has already
attracted such international companies as
OTHER INDUSTRIES
in Dnipro’s software development outsourc- Playtika, Siemens, ISM, Sitecore, Oracle,
ing sector. This is 7.9% of all Ukrainian IT re- Wix, Transferwise to open their offices.
sources.
• IT companies in Dnipro have recently
• The city’s IT sector enumerates more than 44 launched Dnipro IT Cluster, which is now the
software vendors providing a variety of soft- driving force behind the region’s technologi-
ware development services. cal development.
ODESA
Photo credit: UNIT.City
• Odesa is the 5th biggest IT hub in Ukraine coaching centers provide advanced training
with around 8,000 technical specialists, in software development, UX/UI design, QA
which constitutes 5.5% of the Ukrainian IT and testing, data science, and other disci-
talent pool. plines.
PHARMACEUTICAL MARKET
• Around 150 IT companies are situated in • Odessa is also convenient in terms of es-
Odesa (approximately half of them are IT tablishing an R&D center. Around 23 of- • Total market is 2.3 bln USD, growth +8%. “Dostupni Liki” program continues (budget-
service providers and the other half are soft- fices of multinational companies are locat- ed UAH 1 billion in 2018).
• State participation has become more tangi-
ware publishers). ed in this region, including Comodo, DIDWW, ble - 9.2 bln UAH, which is 16%. Market dynamics in values, USD
Netcracker, LogNET, Opera, Social Quantum,
• Five technological universities are located in Teradek, and others. • The pharmaceutical market is growing in
the city. Moreover, local IT companies and IT money and stagnating in packs.
• The growth of the market is due to the active
development of the prescription group in the
retail segment and the prevailing develop-
ment of foreign manufacturers over domestic.
• Deliveries on centralized procurement for
the budget of 2016, 17 and 18 took place,
which is reflected in the three-digit growth of
this segment
• Growth in packages and money under the
Source: N-iX Research, 2017 Source: SMD
34 35TOP PHARMA COMPANIES
As of 2017, there were 135 enterprises involved Key factors, influencing market development:
in the production of drugs in Ukraine, 20+ - glo-
• Russia’s aggression and high geopolitical
bal ones.
and geo-economic risks;
• Slowdown in the global economic growth.
The IMF and the World Bank predict that in
2019, the world economy will slow down by
0.1-0.2 pp compared to 2018;
• Based on Ukraine’s economic reforms and
its competitive advantages, Ukraine should
be able to achieve higher rates of economic
Photo credit: Steve Buissinne
growth in the next years;
• Forecast of GDP growth +5% per annum, go-
ing to 7-8% pa if major reforms are carried out.
PHARMACEUTICAL CHAINS Y2018
Rank Rank Group of companies Market share
17 18 2018
1 1 Apteka Nizkih Tsin (Blagodija, ANC, Kopijka) 13.8%
2 2 Sirius 95 (Bajaemo Zdorovja) 9.2%
4 3 Osan (apteka 911, 03, Plastik, Persha Apteka) 3.1%
TOP-15 CORPORATIONS, RETAIL, 2018 3 4 Farmastor (ADD, FarTop, Persha Socialna Apteka,Apteka Mirra, Biocon) 2.3%
6 5 Solomija Service (Podorojnik) 2.0%
• The most of companies among Top 15 have
8 6 I.K.VEL (Receptika, OptTorg) 1.6%
positive growth in values (LC). Locals, except
Kusum, have negative dynamics in volume 7 7 RUAN 1.4%
11 8 Koneks 1.2%
5 9 Med Service 1.1%
12 10 Lekpharm 1.0%
• Concentration of sales among top chains in- • Top 10 increased share from 34% in Y2017 to
creased. 37% in Y2018
PHARMACEUTICAL INVESTMENTS
• According to the State Statistics Committee, standards of GMP, i.e. Good Manufacturing
Ukrainian pharmaceutical industry shows Practice.
high growth rates of capital investments. It
is 18% over the past seven years. While with • Secondly, companies were investing in the
the foreign direct investment the situation is modernization of production, the purchase of
getting worse, its volume has shrunk. modern production lines for their traditional
drugs.
• During the last 10-15 years, significant sums
have been spent on switching to European
Note: Companies presented on this slide are examples. The slide does not represent any ranking within respective categories
Source: SMD Source: SMD
36 37Capital investment in pharmaceutical production, mln UAH
Capital investment in pharmaceutical
production, mln UAH
2,000 1,846
1,800 1,623 1,598
1,600 1,413
1,400
1,200 1,073
1,000 803 824
800 566
600
400
200
0
2010 2011 2012 2013 2014 2015 2016 2017
FDI in pharmaceutical
FDI in pharmaceutical production, $ mln production,
$mln
90 80.4 83.6
80 71.7
70
49.5
60 43.0 45.5
50 40.7 38.8 38.2 Photo credit: Thilo Becker
40
30
20
10 AGRIBUSINESS
0
• The agricultural sector covers 70.8% of • Highly skilled and large labor pool where
2010 2011 2012 2013 2014 2015 2016 2017 2018F
Ukraine’s total landmass (42.7 mln ha). app. 25% of population is employed in the
agricultural sector.
• 33% of World’s black soil (chornozem).
• In 2017, domestic pharmacists actively mod- products to the market in 2017. And there • Industry experts predict that by the mid-
• 1st World’s Producer and Exporter of sun- 2020s, Ukraine will be No. 3 in food produc-
ernized their production facilities. Darnitsa are another 125 projects.
flower oil. tion worldwide, second only to the U.S. and
registered 7 new medicines in various forms
and dosages last year, and another 20 are • BCCP plans to invest UAH 317 million in its Brazil.
• 3rd World’s Exporter of barley, rapeseed, corn.
scheduled for this year. In total, over the past modernization by the end of 2018, and Bio-
decade, the company has invested 20 million pharm intends to launch a blood plasma
euros in technology and equipment. plant in July 2018. It has already invested $35
million in its construction. • Big Ukrainian agro-holdings are currently launching accelerators and cooperating with
• Farmak invested more than UAH 500 million developing innovative in-house products, local and foreign startups.
in technical re-equipment and introduced 21
Note: Companies presented on this slide are examples. The slide does not represent any ranking within respective categories
Source: State Statistics Committee, Mind.ua Source: Ukrainian Agribusiness 2017 by Baker Tilly, Credit Agricole and AEQUO
38 39AGRITECH BIOTECH
• The pent-up demand for agritech is increas- • At the same time, our country grows • Applications of biotech range from advanced • Lviv scientists, universities and business cre-
ingly bringing together Ukraine’s large pool more than 70% of crop varieties traded on medicines to improvements in agriculture ated biotech cluster to implement startups,
of IT specialists and mechanical design en- the world’s stock exchanges. This makes and biofuels, and extend further to exotic in- joint business projects and youth training.
gineers to work together in the thriving agri- Ukraine an ideal test site for agribusiness dustrial materials.
• The biotechnology regulatory system in
cultural sector. innovations. • Ukraine takes 53rd place at Biotech Innova- Ukraine is still not fully developed, but the
• Only about 10% of Ukrainian agricultural tion Rating 2018. country has committed to shape its policy
companies use innovative technologies. in-line with EU standards.
• The U.S.-Ukraine Foundation launched its
new biotechnology initiative in 2017.
AGRIBIOTECH
AGRITECH MARKET MAP • There is no legal commercial production and • The Ukrainian public has a negative opin-
export of GE products in Ukraine in 2017. ion about agribiotech that is either based on
However, positive test results for corn and emotional perceptions or due to misleading
soybeans at export facilities imply there is news stories that are not based on sound
GE crop production. science.
• There is no known animal cloning or GE an-
imal products under research, production or
export in Ukraine as of 2017.
PHARMABIOTECH
• The segment of biologically active drugs is • At the largest biotechnological production of
actively developing now. Ukraine - the Enzym plant in Ladyzhyn, both
preparations for plant growing, animal hus-
• The technology of growing stem cells is be- bandry and medicines are produced.
ing developed since 2012 in one of the pri-
vate clinics in Kyiv. The first experiments on • The pharmaceutical group of companies
growing cells began in 2000 in Donetsk, at “Lekhim” is considering the possibility of pro-
the Institute of Emergency and Reconstruc- ducing biotechnological preparations and raw
tive Surgery. materials for pharmaceutical production.
AGRITECH INVESTMENTS PROMISING BIOPHARMACEUTICAL ENTERPRISES
• Despite a large agricultural market, Ukraine • In 2017, there were some 5 deals signed,
does not have investment funds focusing among them:
solely on AgriTech startups.
Agrieye - $200,000 from Norwegian Kat-
• In 2014, Evhen Utkin and his company, KM apult Accelerator
Core, has invested $ 1.2 million in eFarmer. Drone.ua has obtained investments from • MBioS Challenge is a competition for sci- • MUSIC-Med is a mobile ultrasound surgical
And in early 2017, his fund, Borsch Ventures, several private investors from the UK, entists, inventors and entrepreneurs in the instrument;
created a joint company Agro Core with Vik- Poland and Moldova. fields of medicine, biology and health.
• Esper Bionic - Bionic prosthesis of the hand;
tor Ivanchyck’s Astarta-Kiev. CIG announced the investment into Kray • In 2018, there were 97 participants. Most
Technologies. prominent startups are: • LATRAX is a device that helps with epilepsy,
• Experts estimate that the annual volume of depression and other neurological diseases.
investments in Ukrainian AgriTech startups
does not exceed $4 M. Note: Companies presented on this slide are examples. The slide does not represent any ranking within respective categories
Source: Ukrainian Agritech Industry Guide Source: thinkBiotech LLC 2018; GAIN Report – UP1725 – Biotechnology Annual Report, USDA
40 41AEROSPACE AEROSPACE HIGHER EDUCATION
• Ukraine is one of the few nations with a de- • 8 universities offer aerospace engineering
veloped aerospace industry, building civil, degrees
military and cargo aircraft as well as supply-
ing space technology. • annually graduating app. 5,000 students
• Home to the world famous Antonov design
bureau known for designing the world’s larg- № University Number of
est airplane, the AN-225 “Mriya”. students
• 65th country in the world by Aerospace Man- 1 National Aviation University 50,000
ufacturing Attractiveness.
2 NTU "Kharkiv Polytechnic Institute" 22,000
• An important supplier of turbine engines for Photo credit: valdazf
aircraft, helicopters and aerospace indus- 3 Oles Honchar Dnipro National University 20,000
tries worldwide.
4 Zaporizhia National Technical University 13,000
• Manufacturer of space launch vehicles,
spacecraft and space management, orien- 5 National Aerospace University "Kharkiv Aviation 8,000
tation and trajectory measurement systems. Institute"
• Ukraine was participating in the Sea Launch 6 Ivan Kozhedub National Air Force University 2,600
program, alongside the United States, Rus-
sia and Norway. Ukraine constructed the ex- 7 Kirovograd Flight Academy 1,800
pendable carrier rocket Zenit-2, used exten-
sively in space launches from this platform. 8 Cherkasy Branch National Aerospace University n.a.
"Kharkiv Aviation Institute”
• Two of Ukraine’s largest state owned defense
conglomerates include “UkrOboronProm”, Source: education.ua
a state management company of more than
100 enterprises in 5 major defense industry
sectors, and “Ukrainespecexport”, which is
Photo credit: Oleg Belyakov engaged in the import and export of military
arms and hardware.
• State space Agency of Ukraine: 8 manu-
facturing enterprises, 5 design bureaus, 11 AEROSPACE CENTERS
companies of other types.
• 200+ R&D, engineering centers and produc-
tion companies in the industry
• 100,000+ engineers, specialists and workers
employed in the industry.
Photo credit: Little Visuals
Source: Ukraine Now Investment Booklet; 2017 Aerospace Manufacturing Attractiveness Rankings, PwC; DLA Piper Ukraine
42 43AUTOMOTIVE AUTOMOTIVE SOFTWARE HUB
• Industry has become one of the fastest • Domestic production enjoys a market revi- • Software is becoming one of the main diffe-
growing manufacturing sectors owing to val in heavy industry trucking, buses, trolley rentiators for competing car brands.
a favorable combination of increasing de- cars, farm tractors, etc.
• Ukrainian IT companies develop pretty much
mand, availability of skilled workers, com- everything: focus on embedded software, on
• Auto manufacturing output is approximately
petitive salaries and integration into the EU UI/UX services; car navigation systems, on
200,000 vehicles per year.
supply chain. platform development and platform integra-
• From 2000, more than 20 global automo- tion in the automotive industry and on the
• Rapidly growing auto parts manufacturing
tive companies established production in future of mobility.
clusters produce components for major EU
Ukraine with more than 30 new plants and
and global auto brands. • Automotive companies keep distinguishing
40,000 jobs created.
Ukraine as the top outsourcing destination.
• Within the automotive industry of Eastern
and Central Europe, together with Poland
and Russia, Ukraine is one of the “Big Three”, ROBOTICS
which has developed a highly technological • Robots are most often used for the automotive
approach to passenger vehicle and truck industry, chemical and electronic industries,
production. agribusiness, military, for cutting and welding
processes, packaging, palletizing, etc.
• The most famous enterprises using ro-
botic complexes: Philip Morris Ukraine,
Procter&Gamlbe, Henkel, AvtoZAZ.
• Ratio of robots to the number of personnel
serving this area: 1 per 20,000 persons.
• Ukrainian vehicle manufacturers produced • The educational segment is rapidly de-
8,586 vehicles in 2017, which was 63% more veloping both commercial robotics courses Photo credit: norm123miller
than in 2016; the output of passenger cars for adults and children, and free courses of
alone increased by 68.1%, to 7,296 units. interest.
• Eurocar remained the leader in terms of pro- PRODUCTION
duction, as it produced 6,145 Skoda passen-
ger cars, which was 56.1% up on 2016.
• It is followed by ZAZ with 1,674 vehicles,
whereas its output in 2016 included 526 ve-
hicles.
• The production of buses during the year grew
by 2.5 times, to 804 units.
• NJSC Cherkasy Autobus (Cherkasy Bus) STARTUPS*
boosted production of buses by 93%, to 382
vehicles.
Note: Companies presented on this slide are examples. The slide does not represent any ranking within respective categories Note: Companies presented on this slide are examples. The slide does not represent any ranking within respective categories
Source: Ukraine Now Investment Booklet; Software Development in Ukraine, Poland, Belarus and Romania in 2019 *Ukrainian or with Ukrainian roots
44 45• Hubs are mostly provided with the necessary
equipment for creating prototypes of the
maker’s devices. For example, a 3D printer,
soldering stations, a laser cutter, etc.
№ Courses City
1 Vynakhidnyky Kyiv, Dnipro, Lviv, Vinnytsia, Kharkiv,
Odesa
2 Boteon Kharkiv, Kyiv, Odesa, Dnipro
3 RoboCode Kyiv
4 RobotSchool Kyiv, Poltava
5 Robo.House Kyiv
6 TechMaker Kyiv
7 Funtronica Odesa
8 Techclub Odesa
9 Guru IT School Uzhgorod
10 Basic Robotics and Programming Kyiv
• There are several educational centers for ro- • Team of Ukrainian schoolboys entered the
botics for children and adults. top 20 in the first World Olympiad in Robotics
in Washington in 2018.
№ LABs
1 LabSeven
2 Ultimate Robotics
3 Mechatronics ROBOT Laboratory
4 Hub Lab
5 Noosphere Engineering School
6 Robo.House
Source: DOU
46
Photo credit: UNIT.CityThe procedure for suspension of customs clear- IT-specialists are in demand almost in all coun-
ance, destruction of counterfeit goods should be tries, and the competition for qualified personnel
improved; keeps growing. Experts say that one of the most
important factors hampering the development of
The draft law on the establishment of the Nation- the domestic industry is the number of IT special-
al Authority of Intellectual Property of Ukraine ists available in the market. Based on unofficial
(NAIP) that will perform certain public functions data, the annual market growth was about 19%
(authorities) for implementing the state policy (is- and amounted to 127 thousand people at the
suance of titles (patents, certificates) for intellec- end of 2017. At the same time, experts estimate
tual property objects should be adopted). that technical universities of the country annually
It is also necessary to intensify international co- produce about 16 thousand of young specialists,
operation at the highest level through facilitation while the industry demands more than 20 thou-
Photo credit: UNIT.City of a consistent dialogue between the Presidential sand The shortage of specialists is also enhanced
Offices of Ukraine and the USA, as well as at the by labor migration.
governmental level – between the Ministry for Suggestions on resolution thereof:
MEASURES ON IT DEVELOPMENT IN UKRAINE Economic Development and Trade of Ukraine and Implementation of a government loan program
1. Removal of constraints on cooperation be- - widespread use of unlicensed software by gov- the Office of the United States Trade Representa- for IT specialists education and training (funds
tween non-resident and domestic companies ernment agencies; tive. administrated by the Ministry of Education and
in the field of itellectual property. Effects: experts estimate that harmonization of Science of Ukraine or the Social Insurance Fund):
- failure to implement effective means to combat
Key point: Economic partners (incl. the EU and copyright infringement. intellectual property rights in Ukraine (with the - loan should be granted for 2-3 years with the
US restrictions to be subsequently cancelled) will annual grace period;
USA) estimate that Ukraine remains a country As a matter of fact, in April 2018, the lack of re- ensure the provision of:
which does not properly handle significant prob- forms necessary for the protection of IP rights led - There should be no loan interest charged or it
lems with intellectual property protection. to the suspension of the duty free import of 155 + 1-1.5 bln USD from computer services export; should be minimally charged;
Ukrainian goods to USA. + 2 bln UAH of taxation revenues from IT industry;
The Office of the United States Trade Repre- - A loan should be granted through government
sentative (USTR) annually releases the Special Practical effect – resident and domestic IT compa- agent banks (PrivatBank, Oschadbank, Ukrgas-
+ 10 thousand jobs in the IT industry and 20 thou-
301 Report on Intellectual Property Protection nies are no longer entitled to perform a number sand jobs in related industries. bank, and Ukreximbank) based on the agree-
and Review of Notorious Markets for Piracy and of US contracts (including those related to public ments concluded with institutions (regardless of
Counterfeiting. The Special 301 Report identifies procurement) due to the inclusion of Ukraine into 2. Povision of software development on a “cus- ownership) providing training for IT specialists
trading partners that do not adequately or effec- the 301 Report. tomer-owned” basis. (on the principle of the “Warm Loans” program);
tively protect intellectual property (IP) rights or Key point: establishment of the legislative frame-
Suggestions on resolution thereof: - a person receiving the loan for education should
otherwise deny market access to U.S. innova- work for software development on a “custom- be restricted to travel abroad (until the loan is re-
tors and creators that rely on protection of their Final reorganization of the system for collective er-owned” basis, meaning that the software paid).
IP rights. management of proprietary copyright and related is developed in Ukraine but is the property of a
rights. Establishment of the system of monitoring non-resident customer. Legislative consolidation Sources of financing:
The trading partners that are currently consid- of IP rights protection in Ukraine; of rights and guarantees for customers. • Partly financed by the Fund of Obligatory State
ered as the most significant concerns regarding
IP rights are placed on the Priority Watch List Legislative definition and consolidation of a par- Suggestions on resolution thereof: The Tax Code Social Insurance of Ukraine against Unem-
or Watch List. USTR identified 36 countries for ticular principle of rights exhaustion. This will of Ukraine and of the Law of Ukraine “On Copy- ployment. For the period from 2012 to 2018,
these lists. Ukraine is in the “worst” of them – speed up the approval and implementation of the right and Related rights” should be amended. the amount of actual revenues (including the
necessary changes to harmonize the Ukrainian balance at the beginning of the year) for the
the Priority Watch List. Effects: guarantee of the customer rights implies
IP right protection law at the customs border of Fund budget exceeded its actual expenditures
The grounds for inclusion into the 301 Report that the number of orders for Ukrainian IT com- (approx. 1 bln UAH). The 2019 Fund budget
Ukraine;
panies will be increased. amounts to 12.8 bln UAH (incl. 12.6 bln of
are as follows:
The Law “On the Protection of Rights to Trade- 3. Government support for IT competence de- insurance premiums), of which 9.6 bln. UAH
- the unfair and nontransparent administra- marks for Goods and Services” should be amend- are intended to be paid as unemployment
velopment.
tion of the systems for collective management ed to limit the abuse by “patent trolls” through the assistance, and 3.1 bln UAH (almost 25%!)
organizations (CMOs); use of the Customs Intellectual Property Registry; Key point: IT is a global industry. Nowadays, are directed to the maintenance of office
48 49You can also read
