IT industry 2021: what is happening in Ukraine and the world
Andrey Yavorskiy, Vice President for Strategy and Technology at GlobalLogic
In the fourth industrial revolution era, the world is moving from an analogue to a digital paradigm. People use digital solutions more often, so investments in IT are increasing. According to Gartner, the volume of investments in the sector will grow globally by 6% in 2021. How this will affect the Ukrainian IT market and what is happening in the world and in Ukraine in IT in 2021 – we are to analyse in the material.
What will happen in the world: global trends
In 2015, a group of German scientists published the article The Fourth Industrial Revolution in the American journal Foreign Affairs. This was the first public use of the concept, and already in the next year, 2016, it became the topic of the World Economic Forum annual meeting. Today, the fourth industrial revolution is our present.
Although digitalization became a trend a long time ago, the massive transition to the remote mode greatly accelerated it. Due to the consequences of the pandemic, businesses globally have to accelerate their digitalization plan by at least five years. Gartner predicts global IT spending associated with telecommuting alone this year at $332.9 billion, up 4.9% from last year. In general, companies will invest about $3.9 trillion in IT solutions, which is 6.2% more than in 2020. The largest growth is predicted in the software development segment – investments in it will be 8.8% higher than in 2020.
The demand for IT services is now at a peak and even exceeds the supply on the market. In the last year alone, it has increased by 11% worldwide. The rapid growth in demand for IT solutions expands the need for qualified IT engineers. According to a study by Evans Data, there are already more than 24.5 million IT specialists in the world, that is 500 thousand more than last year. Despite this fact, the IT industry is experiencing an engineering talent shortage. According to the consulting company Korn Ferry, by 2030 the deficit of specialists in key areas in the world may reach 85.2 million, of which more than 4 million are in the IT industry.
Realities of Ukrainian IT
The number of specialists in Ukraine increased by 16% over the past year and exceeded 213 thousand in 2021. The export of IT services is also growing – it brought more than $5 billion to the Ukrainian economy by the end of 2020 and became the largest category of export of services in the country with a share of 8.3%. In total, in the period 2016-2020, thanks to IT, Ukraine received more than $16 billion in export earnings to the country. Thus, the contribution of IT increases every year and helps the country to strengthen its position in the global technology market.
At the same time, since the fall of 2020, a rapid growth in demand for IT specialists has been recorded in the Ukrainian IT-sphere. If in December, according to the anonymous platform for job search in IT Djinni 16 thousand positions were opened, then in May 2021 this figure exceeded 25 thousand vacancies. In general, over the past five years, the offers number has increased by 30%, and specialists – by 18%.
The industry lacks qualified professionals when the complexity of IT projects and solutions grows. Therefore, in order to remain in demand in the market, it is important for engineers to improve their skills, and for companies – to assist them in this. After all, experienced specialists can solve complex problems and deal with them more efficiently. According to our data, in order to remain competitive and continue to develop rapidly, IT business needs to invest at least 1.5% of its income in the education of specialists. This is about helping to improve skills for both experienced engineers and beginners.
The popularity of technical professions is growing – in 2020 by 20% more applicants applied to IT-courses than two years ago. But in order for former applicants to become in-demand specialists, both business and the education system joint efforts are required.
On the one hand, it is important to provide young specialists with fundamental knowledge, and on the other hand, to provide relevant and applied skills that are in demand by business.
For example, within the framework of the GlobalLogic Education initiative in Ukraine, we cooperate with 19 partner universities and have opened six educational laboratories. So students can get practice in the areas of embedded systems, machine learning and other technologies demanded by the market. Such initiatives also help the state to develop the country's IT industry, because the government plans to increase the number of IT specialists to 450 thousand by 2025, as well as the share of IT in the export of services to 10%.
Technology development is the driver of the economy
Technology began to penetrate business faster, and digitalization and automation became a necessity. Industrial Revolution 4.0 is helping to implement innovations in manufacturing and changing the role of the technical specialist in processes – machines perform tasks and humans control them. According to the World Economic Forum (WEF) a report, increased automation drives businesses to invest more in cloud computing, machine learning and data science. New demanded professions appear and the criteria for the existing ones are changing. So, for example, now specialists are expected to have high analytical skills and the ability to work with big data, as well as build a product architecture and quickly solve problems.
With the development of automation in business, people will have more resources and freedom to solve complex strategic problems, and they will be less involved in routine. Technology is already changing the reality of business and influencing the global economy, becoming its driver. And the Ukrainian IT industry is developing and significantly contributes to digital transformation, strengthening the country's technological position on the world stage.