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With rich farmlands, a well-developed industrial base, highly trained labor, and a good education system, Ukraine has the potential to become a major Eastern European economy. According to The World Factbook of CIA the growth of GDP in 2007 was 6,9% which was fueled by high global prices for steel – Ukraine’s top export – and by strong domestic consumption, spurred by rising living standard.
Economical stability is one of the key factors for ITO services buyers when choosing on offshore destination. as well as for ITO providers who plan new development centers launch. Currently Ukraine boasts the fastest-growing software development Industry in Eastern Europe. In its study Goaleurope, an Eastern European advisory firm, estimated the size of the outsourcing industry in Ukraine reached over US$246 million in 2006 and employed over 7,500 people, and the figures are increasing. With a number of definite advantages over India or China it’s no wonder that Ukraine is becoming a more attractive offshore IT outsourcing destination.
Firstly, government support and the support of different organizations play a critical role in offshore IT outsourcing. According to the online survey ”Offshore IT Outsourcing and Transition Economies” conducted by Business School of the University of East London several associations have supported software development firms in Ukraine, including an industry association (Ukrainian Association of Software Developers or UASWD) and a professional organization (IT Committee of the American Chamber of Commerce in Ukraine).
Secondly, the Ukrainian labor force has traditionally had significant software development skills with a very high level of language proficiency with English as the predominant foreign language.
Besides, the educational system is also well supported: multinational companies like Motorola, Hewlett-Packard and Dell have provided equipment and support for some of the country’s educational institutions. Motorola has also established its own direct investment software subsidiary within the country, and has publicly stated an intention to stay and grow in the Ukraine. In general, Ukrainian authorities regularly declare a keenness to encourage foreign investment.
The consultants at PriceWaterhouseCoopers described Ukraine as a country that ‘focuses on fostering closer integration with the rest of the world’. One of the government’s priorities is to join the WTO which is about to happen this year. As Director-General Pascal Lamy declared: “Ukraine’s WTO membership will… boost its growth and prosperity”.