Our competitors have changed their tactics. What about us?

Russia has shifted its focus in the development of high technology. Now it refuses to promote international IT companies on its territory, saying that they don’t want to support foreign business any longer and instead would like to develop their own. Prime Minister Dmitry Medvedev signed a decree approving the strategy of the IT development for 2014-20 and for the future through 2025. Moreover, the revised strategy for IT industry approved by Medvedev no longer provides mechanisms for supporting the foreign IT development centers, but also including major Russian IT companies in a number of strategic enterprises. At the same time, now the authors of the strategy promise to facilitate import substitution and stimulate “circulation of ‘cloud’ services data within the country.”

Ihor Lysytsky, Vice President of the Association “Ukraine’s Informational Technologies,” assured that such turns in our neighbor’s strategy will not change anything fundamentally. Despite the fact that we are now competing for international business, particularly for outsourcing orders, according to the expert, we should not expect it to come to Ukraine, after it no longer receives support in Russia. For your information, the global software service market, according to the analytical agency Gartner, now exceeds 250 billion dollars. Experts predict that this year it will increase by two percent. And, according to Dmytro Kushnir, CEO of Luxoft Ukraine, the software service market in Ukraine will show the growth rate that is ten times higher – approximately 20 percent. Kushnir said: “It means that Ukraine increases its share of the global market.” According to him, if this dynamic continues, in 10 years – by 2023 – the volume of the Ukrainian market will be at least 10 billion US dollars and more than 200,000 professionals will work in this promising export industry.

Experts say that Ukraine should use the Russia’s strategy as a model for action. “A lot of what they plan to do in Russia we need to do here,” said Lysytsky. According to him, the Ukrainian strategy for IT industry development is very similar to the one drafted in Russia. But “as they say, the devil is in the details, that is why there are more questions about how it will be implemented.” Lysytsky stressed: “We don’t have such resources that Russia has, primarily – financial resources. Perhaps, that is the reason why we make fewer mistakes in the implementation of certain measures. However, our plans should be adjusted to the plans of our competitors. In fact, we are developing on par with Russia and there are areas where we are even ahead of them.”

Ukraine currently does not have a unitary document entitled “Strategy for the Development of IT Industry.” We were told by the people working in the industry that its long-term development plan is presented in a set of different regulations. They are undergoing constant adjustment. “Every day we work on formulating the strategy. I have had a meeting regarding this today. There was another meeting yesterday,” Lysytsky told The Day. But, according to him, the process is organized in such a way that the adjustment is taking place in real time. This means that the amendments are made during the implementation of this or that rule.

Currently, as Lysytsky explained in his commentary for The Day, they are working to create favorable conditions for business: this includes tax burden, licensing system, etc.; the second direction is “training professionals for the industry,” and the third direction is “informatization of social needs,” which is indicated in official documents as “e-government.”

The state needs to decide on the priorities of providing information to the public, said Lysytsky. Secondly, according to him, we need to develop quality standards for the IT market. “A solution that is implemented has to be supported by certain functionality, which should be discussed with NGOs, experts from universities and research institutes, and, of course, business representatives,” stressed Lysytsky. “Because occasionally there occur scandalous situations, when some solutions were implemented at much higher cost.” Obviously, the vice president of “IT Ukraine” hints at a recent case with the state register, an investigation on which was initiated in the parliament. Another interesting aspect, which was mentioned by Lysytsky in his commentary for The Day, is the training of IT specialists. Because, in fact, mass media repeatedly report the extreme growth of IT business in Ukraine, especially in the sphere of outsourcing (in 2003-12 the volumes here grew by 30-35 percent, according to the Software Development Association “Ukrainian Hi-Tech Initiative”) and this requires a lot of manpower. The state has already responded to this – this year the state order for IT specialists was doubled. However, as always there is one “but.” In private conversations representatives of the IT industry complain about this decision made by the government. They say that it would be better to work on the quality of the specialists that are trained now, rather than taking the extensive path and increase the volume of the state order. Indeed, none of the universities, even those that are in the top five among those that provide training for IT professionals do not ensure 90 percent employment of its graduates [given that a 10 percent error goes for “family reasons.” – Author]. According to the information released this spring by the Association “Information Technologies of Ukraine,” National University Kyiv Mohyla Academy has the highest employment rate for IT professionals – 76 percent of their graduates are employed in the IT industry. National Technical University of Ukraine “Kyiv Polytechnic Institute” is on the second place with the rate of 44.06 percent. Ivan Franko Lviv National University is third with 43.06 percent. Taras Shevchenko Kyiv National University is fourth with 42.16 percent with Oles Honchar Dnipropetrovsk National University following closely with 41.47 percent. Every university was estimated by the ratio of the number of university graduates employed in IT industry and the total number of graduates since 2000. By the way, the overall rate of IT major graduates employment in Ukraine is even lower – only two out of ten graduates majoring in IT get a job by profession in Ukraine, according to experts. The rest of the graduates get other jobs. It is quite possible that they are just not recorded in the official statistics because they work as freelancer for outsourcing.

Therefore, executive director of the Association Viktor Valieiev noted that the government could have used the money, they spent on increasing the state order, in a much better way if they opened new labs, purchased new software, or even simply increased salaries for professors at universities and by doing so stimulated competition among pedagogues: it has to be attractive to work as an IT-professor at university. With such approach even the competition among applicants will be much higher and, thus, smarter students will come to study there and they will later grow into professionals who, perhaps, will be bolder in their ambitions and won’t be interested in a quick buck working for outsourcing, but would risk opening their own business. But, again, as experts note, everything depends on the quality of education. So far the training of managers for IT market in Ukraine is also an unploughed field.