The question is how to turn Ukraine from a modestly paid contractor for the world's business giants into one of the global leaders in IT.
All these years Ukraine has appeared in the upbeat reports of the State Statistics Committee as centners and tonnes of raw-material output. But one curious figure was missing there. That figure came from the reports of an international consulting firm and immediately made everyone realize that Ukraine is not only land and metal but also the largest concentration of engineering potential in Europe.
According to this indicator, exports of Ukrainian programmers' services already exceeded $1 billion in 2011, putting them on a par with industries such as arms exports and ferrous metallurgy. What is more, IT exports grow by 30–40% every year. This figure covers only custom development and shows the country's professional, technical and intellectual potential.
Today more than half of the companies on the list of the largest US corporations compiled by the respected American magazine Fortune can be found among the clients of Ukrainian outsourcing companies. Clients do not always allow their names to be disclosed, but I can say that they include world-famous German car makers, the largest American banks and so on. In other words, the work of Ukrainian programmers is becoming part of the most competitive products in the world. Our programmers do not need time to learn something and start doing it — they are already doing it. And thank God for that. If their knowledge is not in demand at home, they find ways to earn a living abroad.
The problem is that the result of this work is not owned by Ukrainian companies. They do not own a product with high added value. The client does. If Ukrainian companies owned the end product, their income would be many times higher, and so would their contributions to the budget and what their employees spend on goods from other producers. In other words, Ukrainian IT companies are still acting like Bangladeshi garment factories sewing clothes to order for Western retailers, who then sell them in their chains at many times the cost price.
To reach another level, Ukrainians are forced to move to developed countries, from where they can enter global markets with their own product — although by then, say, an American one. And for Ukraine itself to move to a fundamentally new level, it needs a strong domestic market and strict observance of copyright, above all by the state itself. In the US, Germany, Israel, Canada and Estonia, the IT industry received a powerful boost in the form of government (e-services) and military contracts. In fact, all the largest international IT companies grew up on domestic contracts and expanded worldwide with active support from trade missions at embassies and financial backing from state-stimulated high-tech investment funds.
The most striking example of those listed is Israel. In the early 1990s the IT business, and especially internet technology, began to develop rapidly around the world. At the same time, Israeli military personnel began to retire — the country's army had always been high-tech. On top of that, there was a powerful influx of engineering and scientific talent from the former Soviet Union. Combined with an established stock market and Israelis' capacity for innovation, this triggered explosive growth across Israel's entire high-tech industry. Exports of technology and IT product licenses from Israel now amount to tens of billions of dollars a year. Billions, I stress. Israel, with its population of seven million, consistently ranks third, or even second, in the world for taking technology startups to the stock market.
Israel's IT business was largely created by our former compatriots. And one question keeps running through my head: what is stopping Ukraine, with its 46 million people and its engineering potential, from reaching the same level as little Israel?
It is important to understand clearly that information technology is as much a part of a country's infrastructure as transport and energy. In Ukraine, the defense industry and so-called e-government could become the first customers for such services. Excitement, meaning a general drive toward technology, also plays a major role. Fortunately, Ukraine has a decent school for training programmers in its polytechnic universities.
Over the past two years, Ukrainian officials have presented their own vision of how the IT industry should develop. A rather traditional one, it must be said. They set up their own pocket companies and secure huge budgets for them. The outcome of such "IT startups" is no real result and vanished money.
Since the distinctive features of the IT industry are the virtual absence of borders and the fiercest international competition, the professional level of Ukrainian programmers already meets world standards. If Ukraine becomes transparent and attractive to international business, within ten years it will become one of the world leaders in IT. Admittedly, such a breakthrough cannot be achieved with nothing but officials' pocket companies that are always looking to gut the budget.
Source: blogs.korrespondent.net