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Regional Structure of Ukraine’s IT Outsourcing Industry: Lviv

Ukraine is the most attractive location for nearshore and offshore software development due to low cost of services, strong hi-tech educational system, well developed market of IT outsourcing services provision and of course the available pool of IT resources.

The IT outsourcing sector in Ukraine employs 25,000 IT specialists and this figure is likely to increase over the coming years. Outsourcing companies are located all over Ukraine as almost every large city has technical universities and higher educational institutions which fuel the industry with skilled IT specialists. There are six main outsourcing centers in Ukraine: Kyiv, Kharkiv, Lviv, Dnipropetrovsk, Odesa, and Crimea cluster (includes cities Kherson, Mykolaiv, Simferopol, and Sevastopol).

We are starting the series of posts to provide you with useful and interesting information about the specifics of Ukraine’s IT outsourcing industry and each of the main outsourcing centers.

Lviv is a cultural, religious, educational, scientific, tourist, business and industrial center.  With its population of about 1 million people, the city is among the largest outsourcing centers in Ukraine. Lviv is located in Western Ukraine and is well known for its UNESCO-listed tourism attractions. For centuries, the city has had strong ties to Western Europe.

Lviv is the sixth largest city in Ukraine by the number of population. In 2009 KPMG named Lviv among the TOP 30 promising outsourcing destinations in their report “Exploring Global Frontiers”.

With over 30 IT outsourcing companies operating in the Lviv market, the market is still quite consolidated. Actually, it is divided between several big companies; the smaller companies do not significantly influence the major tendencies of IT outsourcing market development.

City Lviv is a leading educational center in Ukraine and one of the largest in Central and Eastern Europe having almost 40 higher education institutions which train roughly 130,000 students. There are 26 top level universities, 5 of which prepare highly skilled specialists in computer technologies. Over 1,000 IT graduates are supplied by local universities to the market annually. Currently over 4,000 IT specialists are involved in Lviv’s IT outsourcing sector and according to the experts forecast this number is expected to grow by at least 20% annually until 2015.

Lviv boasts not only highly qualified workforce but cost-effective as well. The market entry costs and the salaries of IT specialists are lower; specifically the salaries are 25% lower than in Kyiv region.
Outsourcing companies operating in the Lviv market are mainly focusing on their internal growth by increasing the professional level of their employees. And anticipating the need for growth in IT talent pool, leading local companies (Eleks, SoftServe, lohika, N-iX, SymphonySolutions) in collaboration with local universities and the city council were the first in Ukraine to establish IT-BPO Cluster.

Lviv has strong positions in IT services in Ukraine and its cultural and geographical proximity with Western Europe, time-zone advantage, and convenient airline connections (ex. Munich – 2 hours, Vienna – 1.5 hours, Warsaw – 1 hour) makes it a very attractive destination for nearshoring.

In 2012 city Lviv is to co-host the European Football Championship. The city is being revitalized and is dramatically improving its infrastructure with the EURO-2012 tournament fast approaching.  A new international airport, a football stadium and additional hotels are all being built, transportation is being improved. Means of transportation are very convenient: roads, railways, airways, there are direct flights to all corners of the globe. Lviv International Airport is one of the major airports in Ukraine. The following airlines connecting places in Ukraine as well as to other parts of the world can be found here: Aerosvit Airlines, Austrian Airlines, Lufthansa, LOT Polish Airlines, UTair, Turkish Airlines, Ukraine International Airlines, Wizz Air.

In 2009, Focus Magazine named Lviv the “Best Ukrainian City to Live”. FDI Magazine also included city Lviv to the ranking European Cities and Regions of the Future 2010/2011 and ranked it the 3rd in TOP 5 Large Cities in category Cost Effectiveness, and the 4th in TOP 5 Large Cities in category Human Resources, the Lviv Region was ranked the 3rd in TOP 5 Easter Regions in category FDI Strategy.

Possessing a large pool of IT talent that is 16% of all Ukrainian IT specialists, providing significant cost savings, including labor costs and real estate and well developed infrastructure, city Lviv has a great potential to become a number one outsourcing destination for both Western European companies and North American businesses.

Presentations of the Lviv region:

Outsourcing in CEE. Country Overview – Ukraine. Lviv Region

Ukraine – Emerging Software Outsourcing Destination. Lviv Region

List of  outsourcing companies in Lviv from catalogue ITOlist.eu