The Impact of War on Ukraine’s Technology Industry

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Pexels photo by Katie Godowski


The invasion of Ukraine took the world by surprise, even though there were indications galore that Putin’s Russia would do just that. Now that the invasion has taken place and the Ukrainians are standing up to the aggressor with unprecedented bravery against impossible odds, the world is finally waking up in trying to figure out how to deal with the emerging situation. There is an overwhelming realization that a message needs to be unequivocally sent that no nation in the world can feel that it is to their advantage to invade another country with the intention of occupying it.

While the world learns to come up with the right kind of strategy to not only try and roll back the advance of the Russian armed forces into Ukraine but to ensure that it never happens again, the Ukrainians are fighting for their right to exist on the streets of its cities. The human suffering apart, one of the many casualties of any war is the livelihoods and economy of a nation. Ukraine, which had a booming technology industry has seen it come under siege with the Ukrainian government departments being subject to data wiping malware in the lead up to the actual armed attack.

But the real impact of the invasion has likely been crippling across the entire technology ecosystem of the country that encompasses a host of startups, large-sized technology firms and a large number of R&D setups representing the iconic technology brands of the world. Like India, Ukraine is a major technology outsourcing destination and this sector has been booming in the country with cities like Kyiv, Dnipro, Lviv and Kharpov leading the way in driving the growth. In fact, IT industry exports grew by as much as 20.4% in 2020 (the pandemic year) to cross a figure of $20 billion.
With internet outages becoming the norm, it is becoming increasingly difficult for the large number of companies providing technology services backup to the banking, insurance and financial services companies in the U.S. and Europe to continue doing so. One can imagine the financial distress that will be caused by the sudden folding up of a sector that employs 85000 to 100000 people. With many of the major global businesses looking at relocating their employees to relatively safer locations within Ukraine, how the situation eventually pans out depends upon how long the conflict drags on and in what manner it gets resolved.

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