Lviv IT Sector: Moving ahead and beyond

29 Feb, 2016

The city expects more international partners, and works on increasing competitiveness

“2016 promises to be a good year for Ukrainian IT sector,” says Dmytro Koba, Senior Associate at Dragon Capital. He states that the increasing competitiveness will remain the core challenge for the majority of the IT companies. Lviv, in particular, will face the growing competition.

Dmytro says Lviv region is one of the top priorities in terms of asset allocation. He adds: “The proximity to the EU borders and cost effectiveness of production make Lviv attractive to financial and strategic investors”. As a result, many of the foreign partners consider Lviv a good location to invest and outsource. The size and development level of Lviv companies also make them attractive for the foreign investment funds.

Dmytro Koba_photoHowever, it does not necessarily mean that the companies need them. Jaanika Merilo, Chief Innovation Officer says:  “Lviv startups no longer need to chase IT investors,” she adds. Quite the opposite, the city now has some very big IT companies which provide the employees with good work conditions. “There is no investment hunger thanks to the current comfort,” Jaanika concludes.

She adds that although the city has big companies, it is the startups that interest the investors the most. Therefore, it is important to support the tech startups which is something the city should do. In terms of big companies, Jaanika suggests working on success stories and creating apps and services which would present Ukraine on the international level.

IMG_6865Wolfgang Fabisch, the CEO of B-Next, agrees. “I recommend getting an in-depth understanding of the industry so the customers would not be able to switch to other locations easily,” he says. In other words, instead of mere providing the foreign partners with the people who can code quickly, Wolfgang suggests focusing on expertise and developing unique services which would make people want to work with the city specifically.

Wolfgang adds that although this may be a challenge at first since international partners may choose a different location, in the future, it will guarantee more security for the IT industry in Lviv and Ukraine in general. “It is okay when the professional service companies send the people around the world and earn money, but this job can be gone tomorrow,” he says.

DSC_9104It is essential for Lviv companies to become more competitive on the international market, believes Dmytro Koba. He adds: “More clarity on tax reform remains crucial for IT sector in particular». Dmytro points out that there are many international companies already working in Lviv, and with more accessing the market, the city will only benefit from it.

“Local companies will only win if the international players decide to invest here and open their centers,” states Jaanika Merilo. Although there will be more competition in terms of human capital, it will also strengthen the positive image of the city in terms of outsourcing. It can also lead to growth of the product companies, startups, and success stories.

IMG_7279Besides attracting foreign clients, the local companies are outsourcing themselves, states Wiktor Doktór, CEO of Pro Progressio. He continues: “IT Companies in CEE countries are growing and are looking for new locations for further growth of their operations».  Wiktor believes that for greater success of the local companies, they need to work together and promote the region overall. In particular, Lviv and Ukrainian companies should focus on developing international IT hub and cooperate more closely with the companies from the neighboring Poland.