For a year and a half after a full-scale invasion, the Ukrainian IT sector has faced huge challenges that have affected its dynamic development over the past years. In the Q1 2023, the export of IT services from Ukraine fell by 16% compared to the Q1 2022. Ukrainian service companies have lost many contracts, while it has become quite difficult for companies developing their products to attract significant investments.
This trend is driven primarily by the war and compliance risks that hold back foreign companies from cooperating with Ukrainian outsourced developers and investing in new projects. Apart from that, there is the international trend of slowing down IT development and massive layoffs in the world’s tech giants. The reason for that is global economic changes that include, among others, Russia’s war against Ukraine.
Sergey Tokarev, an IT investor and co-founder of the technology company Roosh, believes that to survive during the war, Ukrainian IT needs active promotion in the international arena.
“It is important to convey to the international community that the Ukrainian industry has adapted to the war conditions: specialists give 200% and generate new technological solutions, so military operations do not affect the quality and timing of work. If we can put the focus on this, we will get contracts back. This is especially important for IT companies that are currently located in Ukraine,” Sergey Tokarev believes.
At the same time, Ukrainian IT companies were forced to create foreign offices and develop networks abroad to maintain a competitive position in the international market. Thus, some companies have an office in Ukraine but are working for countries worldwide. There are also new companies that have Ukrainian roots yet open their offices in other countries, although they may have a back office in Ukraine. According to Tokarev, this is a positive development because it allows Ukrainians to enter the international market and increases their chances of attracting investments from global players.
Sergey Tokarev notes: that to help the progress of the IT sector, it is important to develop Ukrainian venture funds that will invest in Ukrainian startups. This is already happening, and the businessman hopes that over time this will become a stable trend and the number of venture funds will grow.
The entrepreneur accented MilTech startups as they have massively appeared in Ukraine recently. Sergey Tokarev is confident that the trend will continue since there is a demand for defense-tech solutions. And that means funding will follow. Such products can be immediately tested in real conditions and show the result to the whole world.
At the same time, to support the development of technological industries, it is important to invest in technological education – and, first of all, to strengthen its practical component.
“After graduating from the university, young people should understand what to strive for, what opportunities they have, and what they can do further. To make it possible, students should be allowed to work on relevant business cases while they are studying,” the investor noted. In particular, at SET University, founded by Sergey Tokarev, young people can apply the acquired knowledge to develop the solutions that are needed by real technology companies.
The entrepreneur believes that due to the large number of risk factors, the Ukrainian IT sector will not be able to return to pre-war indicators until the war ends. However, if today we begin to promote the image of Ukrainian IT in the international arena and create an infrastructure for work in the post-war period, Ukraine will show rapid growth in the industry after the victory. According to Tokarev, the country has every chance of becoming a leader in the technology market, a powerful Eastern European AI / ML hub, where foreign companies will attract investors.
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