War in Ukraine Takes Toll on European Software Development Market

A team of developers working on artificial intelligence projects

An unintended consequence of Russia’s invasion into Ukraine is the loss of technical talent that will impact supply chain and software innovation for years to come.

With more than 300,000 technology professionals, Ukraine boasts one of the largest developer communities in Europe. The region is known as Eastern Europe’s Silicon Valley.

Prior to the Russian invasion, the country was a major player in software development near-shoring services for European customers and potentially elsewhere. Gartner estimates more than one million IT professionals work in Ukraine, Belarus, and Russia, with one-quarter (250,000) working for consulting or outsourcing firms.

“Imagine that 10-15 percent of the European developer workforce vanished overnight. In Europe we are currently experiencing a developer market crunch, with clients looking to quickly fill in the absent resources and ensure business continuity,” Saulius Kaukenas, CEO of Agmis, told TechNewsWorld.

Agmis, a software developer in the Baltic states, creates smart solutions for customers worldwide. The company’s product division develops AI and computer vision applications for retail, industrial, and aerodiagnostics applications.

Another part in the Agmis group — Bluelark — is the first certified Salesforce partner in the Baltic states. Agmis employs more than 100 highly-skilled specialists; its solutions are deployed in more than 30 countries across four continents.

Unconventional Circumstances

The technology ecosystem in Ukraine was preparing for a force majeure, with employee relocations to the western part of the country. That plan anticipated moving key staff abroad or expanding capacities in offices in other countries, according to Kaukenas.

The “force majeure” (French for “superior force”) clause is a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise. It is applicable when performance is inadvisable, commercially impracticable, illegal, or impossible.

However, nothing could have prepared for the barbaric targeting of civilian infrastructure and a humanitarian catastrophe executed by the invading Russian troops.

“We hear these tales of people delivering code in between air raid sirens or developers going into active military service to defend their country. This is truly heroic and only indicates the resilience of Ukrainian people,” offered Kaukenas.

Hub for Tech Talent

Ukraine was punching above its weight in the global software development market, added Kaukenas. The country was home to a qualified technology workforce.

“The current crisis made evident how many global companies relied on Ukraine as one of their development bases. I have no doubt that this crisis is only temporary, and the technology industry will be one of the pillars to rebuild Ukraine after the war is over,” he predicted.

Belarus was also a significant player in the developer sourcing ecosystem. But it competed in the lower-end, low-cost part of the market. While Ukrainian companies face temporary challenges, Belarusian technology ecosystem issues are more of a permanent nature, added the Agmis CEO.

More than three million people have already fled Ukraine with millions more internally displaced. Lithuania has launched simplified processes for Ukrainian refugees to work in the country.

Lithuania’s technology community also stepped up to offer temporary or permanent working arrangements to support families during the war, according to Kaukenas.

Technology Suffers

The CEO sees a new digital iron curtain set up in Europe. While current economic sanctions imposed on Belarus are less severe, they indicate the global moral outlook toward a military aggressor.

Kaukenas added that “a cultural backlash, fears over the protection of intellectual property, and the general rule of law are just a few of the reasons why Western companies are exiting Belarus as their development hub.”

Jack M. Germain

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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