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IT INDUSTRY DEVELOPING UKRAINIAN ECONOMY AND TALENT October 2015

IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

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Page 1: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

IT INDUSTRYDEVELOPING UKRAINIAN ECONOMY AND TALENT

October 2015

Page 2: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

INFORMATION & COMMUNICATION

TECHNOLOGY IS THE №3 EXPORT

5 bn.

14,3 bn.

17 bn.

*http://data.worldbank.org **Horizon Capital Data

The ICT industry is potentially becoming №2 by 2020 due to it’s stable growth

ICT

metallurgy

agricultural sector

Page 3: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

STABLE TAX PAYMENT

* State Fiscal Service of Ukraine

м18.1*

bn. UAH (1.52 bn. USD IT PE revenue)

in 2014

74 000* IT specialists

in 2015

+88%tax revenue estimation in 2015 (UAH)

Page 4: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

Highly Qualified ІT Specialists

COMPETITIVE ADVANTAGE OF UKRAINE

TOP-3Ukraine is among the TOP-3 in Central and Eastern Europe by IT market volume and IT talent pool

27*Average age of IT-specialist

5000**5000 experts left thecountry in 2014-2015 рр.

69%* IT specialists consider relocation

*DOU.ua **Experts’ estimate

Page 5: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

*DOU.ua ** Experts’ estimate

Highly Qualified ІT Specialists

COMPETITIVE ADVANTAGE OF UKRAINE

180 000 Tech Specialists in Ukraine by 2020

~20 000** New highly paid jobsannually

$2 000* Average salary

2014 2015F 2016F 2017F 2018F 2019F 2020F0

20,00040,00060,00080,000

100,000120,000140,000160,000180,000

74,000 80,000 90,000 110,000 130,000 150,000180,000

Page 6: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

• 15% - PE TAX in 2016-2020

• 50% of ITO market works illegally

• Emigration of ІТ-specialists

• Tax shrinks pro rata to revenues

ІТ INDUSTRYPESSIMISTIC SCENARIO

IT market declines due to rapid tax rate growth

Page 7: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

• Gradual PE tax increaseover 5 years

• 6% PE tax rate in 2016

• 8% PE tax rate in 2017

• 10% PE tax rate in 2018-2020

• ~25% IT growth in 2017-2020

ІТ INDUSTRYSUPPORTS ECONOMY AND TALENT DEVELOPMENT

IT industry – economic driver of the country

Page 8: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

IT INDUSTRY CONTRIBUTION TO UKRAINIAN ECONOMY

• Forming the investment attractiveness of

the country

• Investors rout funds to Ukraine and

strengthen the economy

• Strong and sustainable growth of the IT

industry

• Industry volume will be 3.2 times up to 7.7

bn. USD by 2020

• 1.5 bn. USD – cumulative tax revenue

(2016-2020)

• 106 000 new IT jobs

Revenue dynamics – optimistic vs pessimistic

2012 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F-1,400 -2,000 -2,379 2,236 -1,118 -895 -805 -765 -7651,400 2,000 2,379 2,617 3,140 3,925 4,907 6,133 7,667

Market capacity MLN USD (OPTIMISTIC SCENARIO)

Market capacity MLN USD (PESSIMISTIC SCENARIO)

Page 9: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

IT INDUSTRY CONTRIBUTION TO UKRAINIAN GDP BY 2020

* Estimations include 5% efficiency of ITO staff productivity annually

3.2 times

industry volume growth up to 7.7

bn. USD*

5.7%

GDP from ІТО industry in

2020р.

+3.8%

GDP from ІТО industry over

six years

working in ITO industry

jobs in other support

industries

180 000people*

400 000

Page 10: IT Industry - Development of Economy and Talent (Vitaliy Nuzhnyy Business Stream)

Contacts

Konstantin Vasyuk, IT Committee Coordinator, European Business Association+38 067 656 08 [email protected]

Victor Valeyev, Director of the «IT Ukraine» Association +38 050 352 31 [email protected]