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Impact of Russia-Ukraine Conflict on European Software Development Market

[vc_row][vc_column][vc_column_text]Ukraine has long been a hotbed of tech talent. With low costs and an educated population, it was an attractive place for companies to do business. However, as the Ukraine-Russia conflict continues to escalate, Ukraine’s position as a European software hub is being threatened. Many businesses have been forced to relocate their Ukrainian operations to other countries due to military conflict in the region.

It’s not a secret that the Ukrainian software development market is one of the most popular markets for outsourcing. The reasons are evident: highly-skilled, English-speaking developers, low salaries and reasonable prices for quality software development. Many customers from Europe and the USA have already experienced all the benefits of collaborating with Ukrainian software companies. But now it looks like all of these advantages are in danger due to the euro zone crisis and the war in Ukraine.

The global outsourcing market is presently dominated by countries such as India and China. These two countries have emerged as the global leaders in the software outsourcing industry due to their stable government and economic growth. As a result, IT outsourcing companies based in India and China have grown exponentially in size. In short, the Russian software development market is on the decline.[/vc_column_text][vc_single_image image=”2577″ img_size=”full”][/vc_column][/vc_row][vc_row][vc_column width=”1/3″][vc_column_text]Invasion of Russia

As a result of Russia’s invasion into Ukraine, hundreds of thousands of Ukrainians are fleeing their homes, leading to a loss of tech talent. This is likely to impact supply chain and software innovation for years to come.

Before the Russian invasion, Ukraine was a major player in providing software development services for global customers. Ukraine, Belarus, and Russia’s IT workforce is among the largest in the world, according to Gartner, with more than a million, including 250,000 software developers.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text]Unusual Circumstance

Employees in the technology ecosystem in Ukraine were preparing for a potential mass exodus of key personnel, with either relocation to western Ukraine or expansion of capacities in offices in nearby countries. Nevertheless, it soon became clear that the invading Russian troops had not been deterred by the penalties of international law, and they continued to target civilian infrastructure and unleash a humanitarian catastrophe on the people.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text]Ukraine – A Tech Talent Hub

Ukraine’s technology industry was growing; the country had a qualified workforce. Belarusian companies developed strategies for the lower-cost end of the developer-sourcing market but Ukrainian firms focused on high-quality software development, a strategy allowing them to take advantage of temporary difficulties in Belarus.

The Lithuanian government has simplified the process for Ukrainian refugees to take up employment in the country. Based on statistics, nearly 3 million people have left the country (Ukraine) and millions have been already displaced.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]More than three million people have already fled Ukraine with millions more internally displaced. Lithuania has launched simplified processes for Ukrainian refugees to work in the country. The Lithuanian technology community offered temporary or permanent jobs to support families in wartime.

To Conclude…

Due to the ongoing conflict between Russia and Ukraine, IT companies in Ukraine are preparing for any eventuality in order to protect their lives and keep projects on schedule. English-speaking technical workers from Ukraine deliver software development outsourcing services to clients abroad, who rely on innovation and problem solving to help solve real-world problems. Ukrainian tech firms are also collaborating with clients abroad to develop new technologies that will benefit the world at large.[/vc_column_text][/vc_column][/vc_row]

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