The Ukrainian IT market is growing in leaps and bounds – in the past few years, this industry has been growing by 30% every year in the country. The number of specialists employed in this field is rising as well. On the other hand, the “digital boom” in Ukraine is accompanied by various challenges: brain drain, more complex regulation, gender gap and weak support infrastructure for new projects. However, this can be improved by local industry leaders, as well as Kyiv’s partners from the European Union.
Even economic difficulties caused by the coronavirus pandemic do not make market players pessimistic. “Recession is possible, but not globally. If during the past few years the growth was up to 30% per year, during the crisis it can be lower, even 20-25%, but still the growth will continue. The specificity of the industry consists in its flexibility, that is why the growth is inevitable,” says Elena Khlevnaya, co-founder of the Fison investment fund and counsellor of the Ministry of Digital Transformation of Ukraine.
The growth rates are truly impressive. According to the data provided by the Ukrainian digital company N-iX, information and communications technology (ICT) take third place in volume of services export, representing one-fifth of Ukraine’s service exports. Revenue in the ICT sector by itself is growing by 26% each year, the number of companies in the field overtaking 4,000. The number of specialists employed in the industry in 2020 reached almost 200,000.
Nevertheless, the more the industry develops, the louder critical voices are heard. But these remarks concern the evolution of the ICT sector in Ukraine and the shift from outsource model (implementation of foreign customers’ projects) to product model – creating of their own digital solutions with higher added value.
“Nowadays Ukraine sells man-hours, but does not make products. I think that the implementation of British legal norms for the IT industry in the context of preserving intellectual property, investments management and taxation modification can change the situation considerably. Money will turn over in Ukraine and not in virtual companies abroad,” explains Dmitry Chashnik, the director of the business analytics company Cobit Solutions.
If you look at the neighbouring European Union, there the added value of the ICT sector is actively growing. According to Eurostat data, from 2012 till 2017 the added value of the services in this industry grew by 18%, and by 22.5% for products. Generally, the sector is responsible for almost 4% of the EU’s GDP. Moreover, digital industry in the EU shows incredible efficiency figures. Only in 2017 visible labour productivity in the ICT sector was two-thirds higher than in the non-financial business in general. The numbers are impressive: from €100,000 per person in Finland to €118,000 in Belgium.
The Ukrainian government represented by the Ministry of Digital Transformation works in order to improve the ICT business climate. “Everything is easy – it is necessary to create the conditions to enable the development of the companies and entrepreneurs in the country, even if working with foreign markets. Although I always insist on the fact that our taxes are relatively low, if we speak about small and medium-sized enterprises,” admits Khlevnaya.
A lot has been said about the importance of digital economy. One of the key impacts of ICT is that this sector is one out of few that creates technologies for general purposes and increases the productivity of traditional sectors of the economy.
This is highlighted by the European Union’s EU4Digital initiative, which is aimed at extending the EU Digital Single Market to the Eastern partner countries, including Ukraine. Moreover, they add that ICT gives an opportunity to reorganise and globalise the economy. It also allows to reach a faster economic growth, create new jobs, improve the quality of life and reduce inequality, including the gender gap.
The latter needs special attention.
The female face of IT
“I occasionally happen to be a mentor of different projects which support women in tech. Before that, I wasn’t even aware of such stories and never experienced this gender difference. I have been working like a man since I was 16. I did not have to prove that my place was mine and that I deserved any position. But when girls started telling me that their parents had persuaded them to study humanities because this is how it had always been in their family, although they wanted to study robotics and ‘all that’, then I joined in the effort,” says Khlevnaya.
The number of women employed in the IT industry in Ukraine is steadily growing, but still represents hardly a quarter of the total number of IT specialists. Ukrainian online service YouControl calculated how many female individual entrepreneurs there were in the IT-industry in Ukraine. In 2019 in comparison to 2017, the number of individual female entrepreneurs in IT grew by 62%. Moreover, in comparison to 2018, in 2019 the number of female individual entrepreneurs in IT grew faster than the overall number (+24% of women against +19% overall).
It is important to note that the gender gap issue is not only connected with men’s and women’s rights, it has an economic effect. A recent IMF study showed that men and women do not replace one another, but rather complete each other in working processes. It means that women’s employment growth gives more economic advantages than the growth of men’s employment.
“The growing number of women in ICT industry can give the economy a new impulse. And this is not only because women are joining the labour force thanks to the disappearance of ‘entry barriers’. Most likely the reason is that women bring to a working place a different set of skills, which allows to raise productivity and efficiency,” explains Anna Pobol, the EU4Digital programme ICT innovations expert.
Khlevnaya, who practically built a successful investment fund Fison from scratch, is certain that the perspectives of women in ICT-industry are “huge”. According to her, the most important is to appreciate what you do. As concerns gender balance, according to the investment fund co-founder, it will be reached sooner or later. “It is important to keep working without looking back, to prove your abilities with facts,” says Elena.
Khlevnaya is sure that even such issues as the salary gender gap can be solved by taking a proactive position. “The companies where women in the same position are paid less than men still exist. You only need to ask your employer a direct question. Like everywhere else. The most important is not to take a victim position. Women are as productive and talented as men. This does not depend on gender, we know it,” explains the entrepreneur.
Chashnik also says the gender gap issue is not so much connected with business practices but rather with the education system and traditional cultural practices. “If you divide the IT industry into two functions: the first one being developing and project management, the second one being everything else (marketing, sales, service, etc.), I don’t see any problem with the second one,” he says.
He underlines that it is in development and project management that “there are actually no women”. “This is not an employment discrimination, but the consequence of the fact that in Polytech [Kyiv Polytechnic Institute, one of the major polytechnic universities in the country] for 30 boys there are maximum 5 girls, but more often just 1-2,” he estimates. He concludes that the problem does not lie in gender discrimination in business but in “parents’ and society’s focus in upbringing of girls in Ukraine”.
Anna Stetsenko, the founder of Indigo – Tech Recruiters, an IT recruiting company, shares his opinion. “It is impossible to change at once deep views and beliefs of one person and even more the ones of a whole nation,” says Stetsenko, who has a degree in Cultural Studies. According to her, women very often refuse to consider management positions in the ICT industry. The arguments are a “standard set of clichés”: family life and children, supposed lower stress resistance and emotionality.
She points out that there are many men and women in Ukrainian digital industry who do not remain indifferent to this issue, and who try to change the situation. “It is better to show one’s alternative point of view through personal example in an atmosphere of confidence,” she explains.
Education is a key to success
One of good examples of how the situation in the ICT industry can be changed is an initiative in Moldova which aims at supporting women who pursue a career in the IT industry. The Tech Women Ambassadors programme was created to facilitate knowledge and experience exchange among the specialists in this field. The programme particularly focuses on the support of women’s and girls’ aspirations in building their carriers in the field of tech.
Among the many activities of the programme are regular conferences, informal meetings, networking and experience sharing events, career development trainings, mentorship and many others. This supports women’s entry into the ICT industry and further development.
This is also the aim of the EU4Digital initiative in the EU’s Eastern partner countries (including Ukraine). According to the programme representative Anna Pobol, support of women in the ICT industry should be focused on the following:
- Raise awareness about the opportunities in the ICT innovations sector;
- Promote digital skills learning;
- Make it possible and easy to try oneself in different roles (“because women in Eastern partner countries often have less time than men due to the family obligations”, according to Pobol);
- Provide mentorship opportunities and consultations for women who wish to start a business.
The EU4Digital experts point out that the world is becoming more technological, and not only in business, but in everyday life. This is why appropriate skills are becoming more and more important. “The stereotypes [about “masculine” and “feminine” professions] date back to the time when ІТ professions were new. Nowadays their number is growing fast, there are more and more specialisations – and we are not talking only about the professions, but also about the skills and competences necessary for them. In the EU they have been standardised in the EU e-Competence Framework. This helps to avoid the gender question: an employer is searching for competences and not for a person,” she says.
The best that can be done in order to destroy gender prejudices, according to Pobol, is to create similar competences descriptions, which leave out the notion of gender.
Valeria Ionan, the co-founder of Quadrate 28, agrees: “What difference does it make whether you are a woman or a man if you are a professional? You should be skilled, smart and experienced in order to participate in a dialog and prove your position. In this case we have absolutely equal chances to win, whatever the competition is. And in one way or another success is connected with self-fulfilment.”
EU4Digital aims to extend the benefits of the European Union’s Digital Single Market to the Eastern Partner states, channelling EU support to develop the potential of the digital economy and society, in order to bring economic growth, generate more jobs, improve people’s lives and help businesses in Ukraine and the other Eastern partner countries – Armenia, Azerbaijan, Belarus, Georgia and the Republic of Moldova.
Find out more about EU4Digital at https://eufordigital.eu/
By Stas Sokolov, full story published on NV.ua