Ukraine’s technology industry has held up during Russia’s invasion, with activity falling markedly less than other industries and increasing as a proportion of national exports since 2019.
The Eastern European nation’s economy suffered when Russia launched a full-scale military invasion in 2022, but after three years, the tech industry has more or less recovered while other sectors have not.
Ukraine’s IT services, measured as a share of GDP, fell from 4.5 percent in 2022 to 3.4 percent last year, but it remains higher than the 2.7 percent recorded in 2019. Meanwhile, agricultural products fell from 14.4 percent in 2019 to 12.8 percent in 2024, and metallurgy fell from 6.5 percent to 2.3 percent over the same period.
Altogether, Ukrainian IT companies generated $6.2 billion in revenue in 2024, the report said – only marginally up from the $6.1 billion in 2021. 2021 was the year many Ukrainian tech companies started to take off – their collective revenue was up 38 percent from the $4.4 billion top line of 2020, with the subsequent war disrupting the burgeoning sector. According to a 2022 National Study from IT Ukraine Association, in the eight years after Russia annexed the territory of the Crimea and before the invasion, Ukraine’s IT services industry, which is based around outsourcing and bespoke software development, grew by 36 percent from $5 billion to $6.8 billion in exports.
IT Ukraine Association [PDF] surveyed 139 tech companies in gaming, software publishing, software development, consulting, and other IT services. The researchers said the nation’s IT sector had become “a pillar of support for the national economy,” while its its falling share of GDP was due to other sectors recovering.
In 2022, the high demand for IT services helped the industry achieve record-breaking results in spite of the war. Despite a slight decline, the role of IT services exports is still high, accounting for 37.4 percent of services exports and 11.5 percent of total exports, up from 6.6 percent in 2019.
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In total, 147 countries have imported IT services from Ukraine. The lion’s share of this work is being sourced by the US, which accounted for 37.2 percent of exports. The UK came a distant second with 8.8 percent.
The survey recorded 2,118 tech companies that are registered in Ukraine, 47 percent of which were outsourcing companies.
Shortly after Russia’s invasion in February 2022, global tech companies with offices in Ukraine told The Register they were able to continue working by relying on backup generators, satellite phones, satellite and dark fiber internet, and other tools to provide business continuity and support for IT staff.
Ukrainian IT companies have raised almost $1.5 billion in venture capital over the past six years, the report added.
Kerry Hallard, CEO of the Global Sourcing Association (GSA) – which represents IT outsourcers – said members in Ukraine had not been immediately affected by the war. “It’s not quite business as usual but they have got to continue; these companies have spent years building up their industry,” she said at the time. ®
