Download - «Discover Lviv»
open to the world
In 2008, KPMG recognized Lviv
as one of the best IT-BPO1
destinations along with 30 other
cities in the world and among 11
cities in the EMEA2 region.
Source: Exploring Global Frontiers, KPMG, February 2009
The Program for Economic Development
and Increasing Lviv City Competitiveness
was launched by the Foundation for
Effective Governance (FEG) together with
Lviv city authorities and Monitor Group in
October 2008. According to the developed
strategy Lviv needs to accelerate economic
development by driving the development
of key highly competitive clusters such as
Business Services and Tourism and supporting
overall economic growth through focusing on
four key economic pillars namely, aligning
education with business needs, investment
promotion, boosting governance transparency,
and investing in supporting infrastructure.
In order to implement the strategy, the
City Administration together with the
city leadership have established Lviv City
Competitiveness Center with two focused Task
Forces – Business Services and Tourism.
1 IT -BPO - Information Technology and Business Process
Outsourcing; 2 EMEA – Europe, Middle East, and Africa
LVIV CITYCOUNCIL
We are making every effort to fulfill this ambition and your participation will facilitate the process.
Lviv does have unique advantages such as geographical, cultural and mental proximity to Europe as well as highly educated and talented labor pool.
We aim at attracting large-scale investments in order to develop state-of-the-art infrastructure with particular emphasis on public transportation, hotels, business parks, airport and railway to bring them in line with international standards.
The City Administration is strongly committed to providing investors with administrative support, local tax incentives, transparent and business-friendly regulations, and consulting.
We believe that our local government, city environment, unique atmosphere, and bright talents – engineers, developers, scientists, and managers – will do their best to bring change in the world.
Andriy Sadovyy
Lviv City Mayor
Lviv can become one of the most comfortable and attractive cities in Europe to live and work in as it has already become for the Ukrainians.
OvErvIEw
The • ancient but ever-growing city of Lviv has been repeatedly recognized by international experts as an attractive destination for foreign investments in the field of Business Services and Innovations.
Lviv’s key advantages are its favorable •geographical location, historical heritage, rich cultural traditions, and western mentality of its citizens, which make it a true European city.
Lviv has become an important technological •and r&D center of Ukraine since the end of the 20th century due to high-quality educational basis and research traditions.
Intellect, creativity, and foreign language •skills have become the crucial catalysts of a rapid sustainable growth of IT and Business Services in the city.
Nowadays IT-BPO sector in Lviv is very •attractive due to its high potential of development and insufficient capitalization.
Lviv city authorities are striving to create a •welcoming business climate for investors by providing them with information support, facilitating business set-up procedures, improving business infrastructure, and offering various economic incentives.
Lviv is open to the world and invites investors •and business partners for cooperation!
IT-BPO DesTInaTIOn OPPOrTunITIes
3
CITy SNAPShOT
Geographic Locationwest of Ukraine, 75 km from the Polish border
Transport FacilitiesInternational airport, railways, A3 and A5 international routes
Time Zone: GMT +2
Population: 735,0001 people
ClimateModerate continental, with average tempera-tures + 20°C (65°F) in June and – 4°C (27°F) in January
Main IndustriesIT, tourism, electronics, engineering, food, chemical, and construction
Direct air Connection Kyiv – 1 hour (550 km), Moscow – 2 hours (1100 km), Munich – 2 hours (900 km), warsaw – 1 hour (400 km), vienna – 1.5 hours (700 km)
GrP: $31 bn
GrP per capita: $4,3001
average salary: $2601
FDI: $275 mln ($30 mln in innovations)1
KEy CITy ASSETS
DIsCOver LvIv
Competitive Human Capital
Average monthly salary in the Business Services •sector two times lower than in Kraków, wroclaw or Budapest1
130,000 students and a pool of highly educated •graduates
Western Mentality
Strong historical and cultural ties with Austria, •hungary, and Poland
Cultural center of Europe, included in UNESCO •world heritage List
Sister cities with Budapest (hungary), Freiburg •(Germany), Kraków (Poland), rochdale (UK), Saint Petersburg (russia), winnipeg (Canada)
strategic Location
The very center of Eastern Europe•
Key transportation corridors connecting Lviv •with the EU (to be modernized in accordance with EU standards)
Growing Infrastructure and Office Space
Total construction investment of $1 bn to •significantly improve city infrastructure
rapid growth in ICT infrastructure, mainly •telecommunications and Internet services
EBrD loan of €38 mln granted to develop •public transportation
Office space supply: 60,000 m• 2 in 2009 and more than 150,000 m2 by 2012 (forecast)
The number of 3* and 4* hotels to be doubled•
Quality of Life
The title of The Best Ukrainian City To Live In, •according to Focus magazine (2009)
relatively low cost of living (half of what it is •in Kyiv or CEE capitals), including housing costs
Low-level air pollution compared to average •in Ukraine
1 2007
Source: Monitor Group, Lviv Bureau of Statistics
4
EDUCATIONAL FACILITIES & FOrEIGN LANGUAGE CAPACITy
PeOPLe MaTTer
Lviv is a leading educational center inukraine and one of the largest ones in Cee:
38 higher education institutions•
130,000 students •
30,000 highly educated graduates each year, •with 50% specializing in IT, Engineering, Applied Sciences, and Foreign Languages
Lviv has a large pool of university students...
Krakow
Lviv
Bucharest
Budapest
Prague
Brno
Bratislava
170128
100
91
80
63
56Key trends in Lviv education sphere:
Lviv is attracting more and more students •from year to year
Quality of education is improving, especially •after recent reforms initiated by the national government
Graduates of Lviv universities are sought •after by leading Ukrainian employers.
Lviv universities are aligning their •educational programs and degree requirements with international standards and business needs
Due to its proximity to Europe and active international cooperation, Lviv can boast of a large number of students and graduates with a good command of foreign languages, where English prevails.
...and multilingual population
native: Ukrainian, russian, PolishEasy to find: English, GermanCan be found: Bulgarian, Czech, French,hungarian, Italian, Slovak, Spanish
thousand people, 2007Source: Monitor Group, Lviv Bureau of Statistics
National Polytechnic University
Ivan Franko National University
Lviv Commercial Academy
National Forestry University
D. halytskyy National Medical University
31,000
25,000
8,500
7,000
5,000
25%
20%
7%
5%
4%
Applied Sciences & Engineering
humanities and Applied Sciences, especial-ly in Foreign Languages and Mathematics
Commerce, Management, Science of Law and Economics
Ecology, Forest Management, Technologies
Medicine, Pharmacy
university specializationnumber
of students% of the
total pool
5
SKILLED LABOr FOrCE
QuaLITy PLus CreaTIvITy
Lviv, as well as the whole ukraine, stands outfor its vast pool of highly educated, talented,and skilled labor force.
Low operational costs of setting up and housing business, together with competitivesalaries of well-trained and hard-workingspecialists, make Lviv an attractive place for outsourcing business operations.
average wages in comparison with some of Cee capitals
Krakow
riga
vilnius
Budapest
Prague
Kyiv
Lviv
1,958
1,595
1,320
1,611
1,291
1,038
598
Key facts about Lviv’s Business services workforce:
workforce is highly flexible and trainable due •to their low average age
Most IT specialists have high-level •engineering knowledge
Technically experienced staff is also •equipped with managerial skills
Almost all the personnel of Business Services •companies have a good command of foreign languages - English, German, French, Spanish, Italian, and Slavic ones
Lviv “exports” its intellectual capital •engaged in ICT sphere to the EU and North-American markets.
$, PPP (based on purchasing power parity), 2007Source: Monitor Group, Lviv Bureau of Statistics
6
BUSINESS INFrASTrUCTUrE
yOur COMFOrTaBLe PLaCe TO WOrK
In 2009, Lviv was recognized as the culturalcapital of ukraine and the most comfortableukrainian city to live in.
As Lviv business infrastructure is still underinvested, Lviv City authorities are actively looking for co-investors in developing modern public transportation system, new hotels and business parks, in upgrading airport and railway facilities to international standards.
Office Space Supply:
More than 60,000 m• 2, with 70% of classes B and C
To be doubled by 2012, especially class B•
Most popular office locations in Lemberg •Business Center, Dominant Plaza, Optima Plaza, and NTON Business Center
Modern exhibition hall in Lemberg Business •Center
Hotels and Private accommodations:
50 hotels in the city, including five 4* hotels•
2,115 hotel rooms in Lviv hotels•
100 hotels in Lviv region•
high supply of private apartments for rent•
Quality of Life:
relatively low cost of living (half of what it is •in Kyiv or CEE capitals), including housing costs
wide public transportation network (to be •modernized with the help of EBrD loan of €38 mln)
Moderate crime rate•
Low-level air pollution compared to average •in Ukraine
Proximity to recreation areas (the Carpathian •Mountains, Truskavets health resorts)
7
OvErvIEw OF BUSINESS SErvICES SECTOr
reaDy TO GrOW
In 2005-2008, Lviv Business Services sector demonstrated rapid growth that could be attributed to boosting domestic and foreign service markets, a skilled labor pool, and initial direct investments.
Business services Clustersales Growth in Lviv, %
CAGr: +33%
05 06 07 08
100
134
213
234
Today Business Services is one of the fastest growing industries in Lviv, with an average annual growth rate of 33% for the last 4 years.
More than 20 foreign Business Services companies have already invested in doing business in Lviv. Among them:
establishing a Foreign Direct Investment Agency •
providing comprehensive information support•
simplifying business set-up procedures•
initiating business-friendly regulations •
improving governance transparency, and•
developing the • incentive system for investors.
Minimum Total yearly Cost per IT specialist, 2007, in thousand $
Poland
hungary
Estonia
romania
Czech
Bulgaria
ukraine
32.8 32.430.7 30.1 30.0
27.326.0
2005 is taken as the base period
Source: Monitor Group, Lviv Bureau of Statistics
a General Look at the Industry
Source: Monitor Group, Lviv Bureau of Statistics
8
The world economic slowdown of 2008-2009 has resulted in further decline in wages and operational costs that had traditionally been lower in Lviv than in CEE BPO Centers.
Current Trends and Opportunities
recent almost 40% depreciation of the Ukrainian national currency (hryvnia) has further increased local cost competitiveness for foreign investors.
In addition, the economic crisis caused a significantinflowofhighlyskilledspecialistsfrom other industries into Lviv Business Services sector.
In 2009, the City Council started the implementation of Lviv Economic Development Strategy that includes:
KEy IT-BPO ArEAS IN LvIv
OuTsOurCInG? BraIn sOurCInG!
attractiveness and Competitiveness of the Key service areas in Business services
software • Localization
Full-Cycle software • Development
Cee Contact Centers•
Payroll services•
embedded systems•
software for CDMa•
IT Consulting•
KPO / LPO•
Financial • Transactions
Procurement•
Finance and accounting• Network Services•
Data Storage•
Enterprise Application •hosting
record / Account Management•
Bookkeeping•
Competitiveness (Local Assets, Incumbent Firms, Location . . .)
Attractiveness (Size, Market Growth . . .)
low
Full-Cycle Software
CEE Contact Centers
Embedded Systems
Software for CDMA
Software Localization
IT Consulting
KPO / LPO1
Payroll Services
Finance & Accounting
Financial Services
high
education/ Linguistic skills
expertise/ Competencies Capacities Customer base Examples of leading companies in the field
SoftServe, ELEKS Software, Lohika, N-iX
high
Austrian Airlines, Adelina Call Center, Kyivstar
SoftServe, GlobalLogic, N-iX, ELEKS Software
Impulsis
ELEKS Software, N-iX, Lohika
SoftServe, Epam
Lviv Juridical Center, Pravo
Skelia
DK-Ukraine, J&L Consulting, Contracty-Audit
Source: Monitor Group
Bank Lviv
Lviv has a number of competitive Business Services subindustries. Ten of them are highly attractive due to their growth potential, deep knowledge and expertise of Lviv labor force.
Leading IT-BPO companies focus their efforts on knowledge-intensive services, customer-tailored IT-solutions, r&D activities, and consulting.
Legend - emerging - moderate - good - strong
9
By stating that Lviv is an emerging IT-BPO center in Europe,
I would like to emphasize:
First of all, the key driver of investments in IT and R&D in Lviv is its
large pool of brilliant minds, highly educated and skilled young people.
Secondly, now is the right time to start. Recent decline in costs and
wages, together with strong commitment of the local government to
economic reforms, make Lviv your prospective business services hub.
Last but not least, since Lviv has missed the first wave of investments
in the CEE BPO industry, nowadays it is seriously underinvested.
The city, like an uncut diamond, offers a great opportunity for those
who plan to come first and be served first.
Oleksiy SkrypnykBoard Chairman of Business Services Cluster
10
Many reputable industry studies confirmed Lviv’s well-deserved place
among world centers of software development outsourcing.
Lviv’s legacy of an R&D center in electronics and IT brought in the
tradition of strong technical schooling. Explicit technical knowledge
delivered by Lviv software engineers in combination with a profound
industry experience makes local development companies reliable
partners for customers worldwide that appreciate the convenience of
working with a company in Europe.
Lviv fills a market niche at the high end of the outsourcing industry
and is a place-to-be for independent software vendors looking for
technology and processes to help them achieve strategic results.
Taras Kytsmey, Ph.D.Member of Lviv Competitiveness Board
Oleksiy SkrypnykBoard Chairman of Business Services Cluster CEO of ELEKS Software+38 (032) 297 12 51 [email protected]
victoriya DovzhykBoard Co-chair of Business Services Clusterhead of Economic Development Division of Lviv City Council+38 (032) 297 57 [email protected]
Serhiy KiralHeadofForeignEconomicRelations&InvestmentOfficeofLvivCityCouncil+38 (032) 254 60 [email protected]
Contact Information
Taras KytsmeyMember of Lviv Competitiveness BoardPresident of SoftServe, Inc.+38 (032) 240 90 [email protected]
www.lvivbusinesscluster.org