The Remarkable Resilience of Ukraine's Tech Industry
Ukrainian's tech industry has given the world a playbook for operating, innovating, and surviving through adversity.
By Bhaskar Chakravorti, Dean of Global Business
Ukraine's economy is projected to shrink by over 45% by year's end. With its key industries, such as grain exports, severely affected by the Russian embargo at the ports and other the infrastructure challenges, the one hope for the economy is its third largest export, tech and IT. If the internet were to keep working, in theory, so could the industry despite the devastation being caused in the country by the Russian invasion. We have been speaking with many Ukrainian tech executives over the past several months and have put out a call to action, for the global community to send tech work to Ukraine: There are several sites that can help companies worldwide find excellent Ukrainian tech talent, including UA Talents, Ease Work, Hire for Ukraine, EmployUkraine, and Imagine Ukraine.
Despite the never-ending bad news out of the country, I see some positive signs in this one sector. Its resilience has been nothing short of remarkable: The volume of IT exports has increased by 28 percent in the first quarter of 2022 over the same time in the previous year, according to the IT Ukraine Association, and for the first quarter of 2022, the industry brought in a record $2 billion in export earnings. Seventy-seven percent of Ukrainian tech companies have brought in new clients during the war.
My conversations with Ukrainian tech suggests that there are several factors that help explain this remarkable resilience through the storm:
- The strong digital infrastructure in much of the country—and backup plans in case something goes wrong. Many of these backup plans were set up after the 2014 Russian annexation of Crimea. The internet was mostly operable, especially in cities. In some cities that were taken over, unfortunately, the internet infrastructure has been controlled by the Russians and digital traffic is being routed through Russia, but for most of the country, the internet is functioning.
- The Ukrainian government has helped by not drafting tech workers into the military. In addition, there are tax breaks for small and medium businesses.
- Tech companies have pursued various approaches to ensure worker safety and lower the risk of a total outage. Most significantly, working through two years of a pandemic helped them get used to working smoothly even with a distributed workforce. Even as many tech workers have fled to the western parts of the country or even left the country, many of the tech companies can carry on business as usual. Tech workers have been given special IT security training to make sure their participation in the cyberwar against Russia does not affect client work.
Through this crisis, I find the Ukrainian tech industry has given the world a playbook for operating, innovating and surviving through adversity.