This April, CUTIS (Canada-Ukraine Trade & Investment Support) invited 12 Ukrainian IT companies to visit Canada, including MindK.
For five days we immersed ourselves in the country’s booming tech sector. After attending a number of B2B meetings, workshops, and panel discussions, we travelled deep into Canada’s industrial heartland. In Hamilton, we’ve met representatives from local authorities, research organizations, and businesses, to discuss Canada’s innovation sector.
Canadian business representatives meet Ukrainian IT vendors
MindK team at CUTIS
With a decline in oil prices, the country is rapidly transitioning to an innovation-driven economy.
Canada has the highest number of AI researchers per capita and the third largest AI talent pool in the world. Supported by government initiatives, incubators and advanced R&D centres, the ICT sector produces a great number of innovative startups. Shopify, HootSuite, and Kik Messenger are just a few examples of successful tech companies born in Canada.
Low bureaucracy along with favourable economic conditions and tax policies drive massive investments into the country’s innovation sector.
Multiple US companies including IBM, Amazon, AMD, DELL, CityBank, and OpenText are moving into Canada. In 2016, Google opened a new headquarters in Kitchener, Waterloo. Two years later, Microsoft intends to build a new headquarters in downtown Toronto and invest $570+ million over the next three years.
Toronto-Waterloo Corridor is shaping up to become the “Silicon Valley North” along with other tech hubs that sprout around major cities. Since 2016, the region’s tech sector grows faster than that of New York City and San Francisco combined. In two years, Toronto is predicted to overtake Silicon Valley as the place with the highest number of tech jobs in North America.
This rapid expansion of the ICT sector and a radical business digitalization has increased the need for highly skilled tech workers.
According to a recent report by Information and Communications Technology Council (ICTC), Canada will need to fill 216,000 new positions in the tech sector by 2021.
Even as the government welcomes talented immigrants, some experts fear that Canada will only be able to satisfy 30% of its need for tech personnel.
This shortage is made worse by the continuing brain drain to the USA. Each year, hundreds of talented graduates leave Canada to seek fame in Silicon Valley. Another problem comes from the aging workforce with only 4.4% represented by people between 15-24 years old vs 12.7% for the pre-retirement group (55-65 y.o.).
One of the ways Canadian business can deal with this shortage is by looking for skilled tech professionals in other countries, e.g. Ukraine.
Global Sourcing Association (GSA) named Ukraine the “Offshoring Destination of the Year” in 2017. With more than 38 thousand people graduating annually from Ukrainian tech universities, the country is expected to have 200,000+ ICT workers by next year.
Relatively cheap labour is often cited as the top reason for working with Ukrainian companies. After all, a software developer in Ukraine earns about $20,000-30,000 per year vs. $77,600 in Canada.
Yet, Ukraine’s biggest advantage is expertise and the sheer number of skilled tech personnel.
Angel.co lists over 1900 Ukrainian tech startups with an average value of $2.5 million. Numerous world-famous companies like Grammarly, People.ai, CleanMyMac, GitLab, DepositPhotos, Petcube, and Looksery (acquired by Snapchat for $150 million) originate from Ukraine.
The country houses 110+ R&D offices of large tech companies including Apple, Microsoft, IBM, Oracle, Samsung Electronics, Boeing, Skype, Siemens, Magento, and Ring (acquired by Amazon for $1 billion).
Despite Ukraine being relatively unknown in Canada as an outsourcing destination, projects like CUTIS can move mountains and create thousands of win-win relationships.