IT RESEARCH 3.0 CONTENT 1. INTRODUCTION 4.3. Real Estate: purchase of land 2. LVIV IT MARKET CHARACTERISTICS 4.4. Transportation 2.1. IT companies: market overview 4.5. Car ownership 2.2. IT industry development potential and possible risks: expert 4.6. Public transport review 4.7. Air travel 2.3. IT specialists: market overview 4.8. Ukrainian air travel industry analysis 2.4. Self-education and further training of IT specialists 4.9. Insurance 2.5. Development potential: Lviv education market analysis 4.10. Medicine 3. ECONOMIC EFFECT OF THE IT INDUSTRY IN LVIV 4.11. Sports and entertainment 3.1. IT industry turnover 4.12. Traveling 3.2. IT share in Lviv GRP structure 4.13. Charity 3.3. Overall economic eect of the IT industry 5. LVIV IT SPECIALIST PORTRAIT 3.4. Employment generated by IT industry 6. LVIV IT COMPANIES 3.5. Monthly income 7. LVIV IT CLUSTER MEMBERS 4. IT SPECIALIST EXPENSES ANALYSIS 8. ABOUT THE PROJECT: METHODOLOGY 4.1. Real Estate: property 4.2. Real Estate: rent 1. INTRODUCTION For the third time, Lviv IT Cluster conducts complex research of the Lviv IT industry. The project is important for the entire Ukrainian IT community: these studies are used by local companies, govern- ment agencies, far beyond the Western region. The results of the research empower operational and strategic business decisions and serve as leverage in the dialogue with local authorities, foreign partners and investors. In this edition, the research focus pivoted to IT industry dynamics exploration, since the allocated historical data allows to compare figures and observe the market patterns. These patterns and trends are consistently positive. LVIV IT MARKET ХарактеристикаCHARACTERISTICS ІТ-ринку Львова 2.1 IT COMPANIES: MARKET OVERVIEW NUMBER OF IT COMPANIES IN LVIV 247 317 +28% 2017 Growth dynamics 2018 2.1 IT COMPANIES: MARKET OVERVIEW STRUCTURE OF IT COMPANIES (by the number of employees) 2,2% 13,3% 50,9% Big + Small + Small > 400 51-100 11-50 0,6% 6,0% 26,9%* Big Medium Micro 251-400 101-250 < 10 IT COMPANIES BY SIZE 90% of the market - small and mid-sized companies 1/2 10% IT specialists big work at big companies companies * In some cases, the amount may be less than or more than 100% by 0.1% due to rounding of the data 2.2 IT INDUSTRY DEVELOPMENT POTENTIAL AND POSSIBLE RISKS: EXPERT REVIEW SUCCESS FACTORS AND DEVELOPMENT POTENTIAL OF LVIV IT INDUSTRY Constantly growing Eective communication demand for hi-tech with the city authorities products and services regarding industry development Attractiveness of the Convenient city for IT specialists from location Lviv others regions of Ukraine Stable industry IT infrastructure growth development (e.g., IT Park) Favorable investment climate Air travel development Highly qualified Cooperation with IT specialists educational institutions of the city 2.3 IT SPECIALISTS: MARKET OVERVIEW NUMBER OF IT SPECIALISTS IN LVIV 25 up to 24 К 20 20-21 К 15 15-17 К 10 5 +25% Number of freelancers* 0 working in Lviv: 2017 2018 2019 Growth dynamics 4 000 * The number of freelancers is not included in the total number of IT specialists in Lviv. Only the freelancers who at the time of calculation (November-December 2018), did not cooperate with companies in Lviv, and received orders through freelance marketplaces are taken into account. 2.3 IT SPECIALISTS: MARKET OVERVIEW IT SPECIALIST MONTHLY INCOME IN LVIV $1 880 in 2018 +8% $1 740 in 2017 Growth dynamics 81% of IT industry employees are saving money 2.3 IT SPECIALISTS: MARKET OVERVIEW ADDITIONAL EMPLOYMENT 11,1% 2,2% own IT startup teaching at educational institution or courses 29,8% are engaged in additional activity: 7,0% 15,7% startup in freelance another sphere 2.3 IT SPECIALISTS: MARKET OVERVIEW MIGRATION IN IT 39,1% of Lviv IT specialists moved from the other region*: 16,9% - Lviv region 3,9% - Ivano-Frankivsk region 3,1% - Ternopil region 2,2% - Rivne region 2,0% - Kyiv region 1,8% - Khmelnytskyi region 1,4% - Volyn region 1,0% - Kharkiv region < 1% - other regions [Vinnytsia region, Dnipro region, Donetsk region, Zhytomyr region, Zakarpattia region, Kirovograd region, Mykolaiv region, Odesa region, Poltava region, Sumy region, Cherkasy region, Chernivtsi region and Chernihiv region] * According to the criterion of residence registration and individual entrepreneur registration 2.4 SELF-EDUCATION AND FURTHER TRAINING OF IT SPECIALISTS SELF-EDUCATION AND SELF-DEVELOPMENT 3/4 of Lviv IT specialists 87,5% in Ukraine Every second visit expenses were visited IT conferences covered by the company during the year 12,5% abroad (52,9%) is spent by companies $1 m for further training of employees in a year 2.5 DEVELOPMENT POTENTIAL: LVIV EDUCATION MARKET ANALYSIS Among the educational institutions of Lviv, which provide techni- cal degree programs, including programs in IT 11 13 18 13 836 students are currently studying at educational institutions of І-ІV levels educational institu- educational institu- new of accreditation tions of ІІІ-ІV levels tions of І-ІІ levels of technical degree of accreditation accreditation programs launched (universities, insti- (colleges, specialized at Lviv universities tutes, academies) schools) over the last 3 years students will be ready to start a career by the end 12 101 at educational institutions 5 000 of 2019 (4-6 year students) of III-IV levels of accreditation 1 735 at educational institutions of I-II levels of accreditation 2.5 DEVELOPMENT POTENTIAL: LVIV EDUCATION MARKET ANALYSIS THE MOST POPULAR DEGREE PROGRAMS Program University 1750 Number of students (full-time) 1500 1250 Computer Science and 1 743 NULP Information Technology 1000 NULP Computer Engineering 953 750 Applied Mathematics 500 LNU and Computer Science 388 250 Electronics and 340 LNU 0 Computer Technology There are about 25 short-term IT courses in Lviv 7 658 8 288 people have passed people took IT courses* technical courses during last 2 year (Development, QA) 4 587 630 of them in 2017 people have passed 3 701** non-technical courses (HR, Business Analysis) in 2018 * Information received by sending formal requests to an institutions or companies that provide short-term training courses in IT ** As of October 2018 ECONOMIC EFFECT ХарактеристикаOF THE IT INDUSTRY ІТ-ринку IN LVIV Львова 3. ECONOMIC EFFECT OF THE IT INDUSTRY IN LVIV LVIV IT INDUSTRY TURNOVER* million $ 650 518 m $ 600 618 m $ 571 m $ 457 m $ 550 2017 2016 500 450 300 m $ 261 m $ 280 m $ 244 m $ 400 2015 2014 350 300 217 m $ 167 m $ 250 203 m $ 156 m $ 2013 2012 200 150 128 m $ 103 m $ 100 120 m $ 96 m $ 50 2011 2010 min max min max min max min max min max min max min max min max 2010 2011 2012 2013 2014 2015 2016 2017 * By 2015, Lviv IT industry turnover was calculated by expert evaluation. Starting from 2016 the turnover was calculated using the Income Approach and Production Approach. 3. ECONOMIC EFFECT OF THE IT INDUSTRY IN LVIV IT SHARE IN LVIV ECONOMY 20% 21% in 2016 in 2017 3. ECONOMIC EFFECT OF THE IT INDUSTRY IN LVIV ECONOMIC EFFECT OF THE IT INDUSTRY $919 million $734 million $559 million $446 million $360 million $288 million Direct Indirect Total (induced) in 2016 in 2017 3. ECONOMIC EFFECT OF THE IT INDUSTRY IN LVIV NUMBER OF WORKPLACES CREATED IN RELATED INDUSTRIES 62-63 thous. 51-53 thous. 42 36 thous. thous. Workplaces created (direct employment) 20-21 Workplaces created thous. 15-17 (indirect and induced thous. employment) The total number of workplaces created by IT 2017 industry in Lviv 2018 One IT specialist One IT specialist created created 3,4 workplaces 3,1 workplaces IT SPECIALIST EXPENSES ANALYSIS 4.1 REAL ESTATE: PROPERTY REAL ESTATE SOURCES OF INCOME FOR REAL ESTATE PURCHASES* 27,0 % of interviewed IT specialists have bought real estate 90,5 % 23,8 % 9,1 % 9,6 % during last 3 years Own Loan from Bank Gift from accumulated friends loan relatives funds / relatives * In some cases, the amount may be less than or more than 100% by 0.1% due to rounding of the data 4.1 REAL ESTATE: PROPERTY TYPES OF REAL ESTATE PURCHASED BY IT SPECIALISTS* 66,5 % 1,2 % Apartment in new building Private house (investment in construction) in the city 13,6 % 5,6 % Apartment in new building Private house (commissioned building) in the suburbs 14,5 % 0,4 % 2,4 % Apartment on the secondary Commercial Garage real estate market real estate LOCATION WHERE REAL ESTATE IS PURCHASED 90,2 % 7,7 % Lviv Another location in Ukraine 1,3 % 0,8 % Lviv suburbs Abroad *The amount exceeds 100%, as respondents could purchase more than one property. 4.1 REAL ESTATE: PROPERTY PRIMARY REAL ESTATE MARKET SHARE* SECONDARY REAL ESTATE MARKET* 15,4 % 25 20 from the number $19 million 20 of commissioned 15 apartments in Lviv 15 23,2 % 10 $15 million 10 5 5 22,5 % $6 million 0 0 2016 2017 2018 2016 2017 2018 From 2016 to 2017, the share of purchased apartments by IT specialists grew by 8% * Information as of October 2018 4.2 REAL ESTATE: RENT LEASE PERIOD 24,8% 24,9% 25,6% 41,0 % IT specialists live separately, in a rented accommodation On average, one IT specialist 12,9% rents 48 m² of accommodation 11,8% The maximum cost of renting an accommodation per month is up to 3 3-6 7-12 1-2 over 2 $ 600 months months months years years 4.2 REAL ESTATE: RENT THE AVERAGE ANNUAL EXPENSES OF IT SPECIALISTS FOR RENT $18 million $21 million +17% 2017 Growth dynamics 2018 4.3 REAL ESTATE: PURCHASE OF LAND 5,3 % ІT specialists purchased a land plot during the last three year million was spent by IT specialists on purchasing land plots during the last three years LOCATION OF LAND PURCHASE: Lviv Another location in Ukraine
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