Country profile of Ukraine, Ukrainian ICT and IT outsourcing market trends and outsourcing potential.

1. IT SOURCINGEUROPE Central and Eastern Europe’s Country Profile: Ukraine

2. Area: 603,628 km2 Population (est. 2009): 46.1 million Human Development Index (est. 2007): 0.796 GDP/capita (est. 2009): 2,869€ GDP growth rate (est. 2009): -14.1% IT Outsourcing market value (est. 2009) – 389.6€ million GENERAL DATA

3. * Based on the 2009 Legatum Institute estimation PROSPERITY INDEX*

4. PROSPERITY INDEX

6. Ukrainian ICT market concentrates around the following large cities: Kyiv, Dnipropetrovsk, Donetsk, Odessa and Lviv.

7. Ukrainian government support for the ICT industry has been reprioritized, and since late 2008, the government has undertaken a series of emergency measures to stabilize the banking sector.

8. The government has created the Ukraine Development Gateway Project to promote electronic government (e-government) and support an information economy in the country.

9. According to Gartner (2009), the telecom services are operated in the country by an estimated 1,300 companies and the country has a very good prospect for Internet access and Internet Protocol (IP) services.MARKET TRENDS

12. The continuing decentralization of outsourcing industry in Ukraine remains a positive factor for IT services market development. Outsourcing accounts for more than 70% of software development activity in Ukraine.

13. Affected by the economic stagnation, small outsourcing services providers have to merge with the larger players or discontinue their operations. Leading outsourcing companies have managed to restructure and optimize their business to become more client-centric, which has led to substantial revenue growth and made Ukrainian IT outsourcing market go beyond traditional outsourcing (typical of India and China) and move to a next stage of outsourcing maturity.

14. Ukraine resides among the lowest-cost destinations for IT outsourcing in Europe, according to Gartner. MARKET TRENDS

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