According to Offshore Outsourcing Best Practices (www.oobp.org), the growth of the Ukrainian IT industry export totaled 60%, reaching $280 million in 2006; the growth of its IT market totaled 25-30%. Experts forecast that in 2007 the market will grow 15-17% and reach $2.4-2.5 million. They also state that, due to its great intellectual potential, Ukraine has a good chance to find its niche at the global IT market and become a preferred outsourcing service provider.

“The successful development of Information Technology Outsourcing Industry in Ukraine results from a number of advantage factors in the country. In spite of the increase in developers’ salaries and general price raising in 2006, software development costs are still highly competitive and attractive for Western customers. The attractive prices are accompanied with progressively improving quality of products and knowledge of developers”, reads one of the publications at Oobp.org.

It further explains: “The similarity of cultural code, traditions and religion are an important advantage for outsourcers to work with the country. US and Western European customers like western mentality of the Ukrainians and small time-zone difference. Thus, the new trend called nearshoring is a prospective direction for Ukraine. Nearshoring is an offshore outsourcing to the countries situated nearby the customer’s country. It is popular in the developed Western European countries like Germany and other countries. The former USSR republics which include Ukraine are within eyeshot of customers who start exploiting nearshoring.”

Thus, due to a number of the above competitive advantages, Ukraine was already mentioned among top five most attractive outsourcing directions for Western companies in 2006.

The full version of this publication is available at http://www.oobp.org/OOBP+News/569.aspx.