Newsletter Issue 156 | October 2021

Digital transformation of the economy: A mixed picture

The Ukrainian economy is entering the digital age in dual speed: While the country is home to a booming IT sector, digital transformation of the general business sector is lagging behind. Growth in the IT sector has been outpacing other sectors in the past year. The sector’s share in national employment has grown from around 2%% in 2015 to just under 3% in 2019. With a strong emphasis on programming activities, the sector now contributes 5% to Ukraine’s total exports. At the same time, companies in the sector are increasingly moving from providing outsourcing services to developing and offering their own products.

Digital transformation of companies outside the IT sector is less advanced, as a GET study based on a representative survey of companies reveals. Both the market pressure and current state of digitalisation of companies lags behind Germany. As market pressures will increase in future years, more awareness and action is needed. Government efforts to support the transition to a digital economy should address the key bottlenecks for digital transformation, mainly the scarcity of qualified staff and gaps in regulation.

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