Nearshore Software Development in Ukraine: Why Has it Grown?

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MARYNA DEMCHENKO

Published: 15 Dec 2021

Nearshoring

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Over the past few decades, Ukraine has been recognized by Western European countries as a nearshore software development destination that strikes the perfect balance between qualified technology talent and financial attractiveness. If you are yet to uncover the benefits of Ukraine as your next destination for nearshore software development, we will walk you through the reasons that fueled its growth, starting with a brief overview. 

Overview of nearshore software development in Ukraine 

The history of nearshore software development in Ukraine dates back to the early 1990s. At that time, the local IT sector was represented by a handful of companies, many of which have grown to become the core of nearshore software development in Eastern Europe as we know it today. 

Between 1990 and 2010, nearshore software development in Ukraine expanded to include 25 companies, with up to 15,000 IT specialists on board in total. Today, as the number of software developers in Ukraine has skyrocketed to 220,000 developers, nearshore software development in Ukraine includes 5,000+ IT companies, which provides a wealth of choice when it comes to implementing your nearshore software development strategy.

While the IT industry in Ukraine may have played second fiddle to other sectors in its early years, by 2021, the export of IT services in Ukraine has been valued at a staggering 6 billion dollars, representing 4% amount of Ukraine’s GDP. Most of Ukraine's nearshore software development partners are based in: 

  • The United Kingdom;
  • Germany;
  • The Netherlands;
  • Sweden;
  • Denmark. 

We at nCube know the nuts and bolts of nearshore software development, as we've been building nearshore teams for our Western European clients since 2008. For example, we augmented teams for such prominent UK companies as Greenpeace, AstraZeneca, and Octopus Investment. Moreover, we partnered with a wide range of companies, both large and small, based across the European Union. In light of our experience, we’re well-positioned to answer the question of why nearshore software development in Ukraine has risen to fame among Western European organizations. 

READ ALSO: How to Pick the Best Nearshore Software Development Company

Broadly speaking, the main reason why the IT sector in Ukraine is in bloom is that it’s fueled in large by foreign capital, which creates competitive salaries and career opportunities, attracting skilled IT professionals who are motivated to stay relevant in a competitive market. In its turn, the nearshoring model allows EU and UK companies to establish long-term relationships with their nearshore software development resources. A symbiosis like this benefits both sides of the nearshore software development partnership: EU and UK organizations get the best quality produced by skilled (and more affordable) resources while software developers in Ukraine get a chance to grow professionally being part of companies with European standards of leadership. 

Now, let’s take a closer look at the reasons behind the rise of nearshore software development in Ukraine. 

Tech skills shortage in Western Europe

The European labor market currently faces an increasing shortage of skilled workers, which has been exacerbated even further by “The Great Resignation” that’s occurred in the aftermath of the pandemic. Thus, businesses are in desperate need of qualified software developers to deliver on their digital transformation plans, as the key strategy to achieve efficiency and a competitive advantage in the digitized world. As a result of this, many EU and UK organizations have found value in nearshore software development in Eastern Europe, and Ukraine in particular, as it stands out as the region’s powerhouse of qualified technology talent looking for opportunities to work with Western European companies. 

Digital transformation in Healthcare

Covid-19 has been the primary catalyst in accelerating nearshore software development in Europe, as many businesses started to pick up the pace on their digital transformation agenda As the most affected industry, Healthcare severely requires talent for a rapid digital transformation as it adapts to the remote world we live in. The pool of talent needed to achieve that includes software developers and Quality Assurance specialists as well as professionals with experience in various cutting-edge technologies, such as IoT, AI, Machine Learning, computer vision, Blockchain, and more. In many cases, given that the local pool of talent is depleted, the only way to access the needed resources is by hiring a nearshore software development partner

With 220,000 software developers as of the end of 2021, nearshore software development in Ukraine is firmly positioned as one of the key suppliers of talent adept at building Healthcare and Telemedicine solutions, not to mention software developers well-versed in various programming languages required in this field, such as Kotlin, Swift, Java, .NET, and Python. These competencies are highly popular among software developers in Ukraine, so the local pool of tech talent can easily prop up Western European Healthcare organizations with the skills they may lack locally. 

The growth of Big Data 

The lack of professionals adept at handling Big Data threatens to hold back the EU Big Data strategy which includes:

  • Improving Healthcare;
  • Creating comfortable transport systems;
  • Producing new products and services; 
  • Optimizing the costs of public services;
  • Increasing sustainability and energy efficiency. 

Extracting value from Big Data is impossible without a pool of skilled resources who not only can find solutions to structure and store data but also analyze it and spot valuable insights. All of these functions can be handled by a provider of nearshore software development in Ukraine. Today, the country has already validated its worth as a key destination for nearshore software development, helping EU businesses source Big Data specialists with various skill sets, including those related to data engineering and data analysis. Moreover, Ukrainian nearshoring software development providers can supply you with Python, C++, Java, and other Big Data talent. To pinpoint this idea, have a look at the LinkedIn data, according to which Ukraine boasts: 

  • 50,000 Java developers;
  • 30,000 data engineers;
  • 35,000 Python specialists;
  • 25,000 C++ experts.
  • 14,000 data analysts;
  • 8,000 machine learning specialists. 

With such a vast pool of specialists, companies seeking nearshore software development in Ukraine can add the skills they need fast. Many of these professionals already have vast experience working at nearshore software development units of Western European companies, so you can count on qualified and seasoned resources. 

READ ALSO: How to Build Your own Nearshore Development Team in Ukraine

Artificial Intelligence | Machine Learning 

The EU Commission has made it a priority to increase AI adoption in the next 5 years, which calls for hundreds of thousands of qualified AI and ML professionals. Given the novelty of the technology that overlaps with increasing demand, it can be challenging to deliver on such an ambitious strategy. At the same time, the talent gap faced by Western Europe has created lots of opportunities for nearshore software development in Eastern Europe, and Ukraine in particular. Unlike Western Europe, Ukraine doesn’t face the drought of specialists skilled in AI/ML technology stack, including Python, C++, Scala, R, and other technologies. In fact, these languages have made it onto this year’s list of top 20 most popular programming languages in Ukraine. Thus, choosing Ukraine for nearshoring software development can be the answer to the shortage of AI/ML professionals you may be facing in your organization. 

Cloud adoption

Cloud solutions often come as an additional challenge alongside the adoption of Big Data. Data storage and processing should be enabled by scalable and well-executed cloud infrastructure. As the amount of data in the world continues to snowball, the need for skilled specialists won't die down as well, forcing companies to look for nearshore software development partners to assist with their cloud adoption tasks. This trend brings Ukraine to the spotlight as the ultimate destination to source skilled specialists in AWS, MS Azure, Google Cloud, DevOps, Docker, Kubernetes, etc.

According to LinkedIn data, working with a Ukrainian nearshore software development purveyor potentially means accessing the following resources:

  • 16,000+ AWS services specialists;
  • 12,000+ DevOps engineers;
  • 8,000+ MS Azure developers;
  • 6,000+ Google Cloud specialists;
  • 19,000+ Docker experts;
  • 5,500+ Kubernetes experts.

Thus, when looking for nearshore software development in Europe to help you adopt cloud solutions, you can be sure that Ukraine is more than ready to make up for the talent gap you may have in your location. 

Brexit

Brexit has become a game-changer for the UK, a country known for prioritizing the protection of its national interests. Essentially, Brexit prompted the shift to global labor markets, which UK businesses need to accelerate digital transformation. When it comes to Ukraine, both countries have agreed on a simplified model of providing IT services, including nearshore software development

For companies based in the UK, Ukraine is “nearshore” in every sense of the word. Geographic proximity and a favorable time zone that allows 5-6 hours overlap combined with vast pools of skilled workers is the recipe that helps many UK companies succeed while operating the tech talent deficit. Thanks to these benefits, many UK organizations plan to expand and invest in their existing Ukrainian nearshore software development units. 

READ ALSO: Planning to Hire Developers in Ukraine? Key Numbers You Should Know

Afterword 

For the most part, nearshore software development in Ukraine has made a case for a resounding success because the pools of technology talent in the EU and the UK were unable to meet the growing need for software developers. 

Conversely, Ukraine’s nearshore software development market is mature enough to provide developers with the ability to dive deeper into the domains and business processes of their Western counterparts, helping them solve their business tasks. Thus, nearshore software development in Ukraine often goes beyond mere routine development tasks and spans implementing Big Data, AI/ML, and cloud solutions as well as creating full-fledged software products, and much more. 

We at nCube will gladly share our experience in building nearshore software development units for companies based in the EU and the UK. Contact us. 

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