This blog is all about my experiences and insights as an Offshore Software Development Entrepreneur. It describes the inherent challenges that come with offshore development as well as the solutions we use at Ignite to create a high-performance cost-effective onsite-offshore software development model.

December 12, 2013

The Fat Wealthy West and the Skinny Hungry East

Software development is quickly becoming a profession more common in the east (and by east I mean both Far East countries like India and China, and Eastern European countries like Russia and Ukraine) then in the west. Yes, nobody is yet risking the high ratings popularity and prestige universities in the US and Western Europe still hold, but a deeper view would show you that the number of students from the East is rapidly growing in these universities. The next stage - the thrones of the prestige universities in the west will be thrown and the new kings in the East will rise...

I live in Israel – the Startup Nation. For the last few decades Israel was well known for the booming High-Tech industry. In a small country that lack natural resources all we had was brains, creativity and entrepreneurial spirit. Combining this with the high-end engineering departments in the Army this led eventually to a vibrant Civilian High Tech market where the amount of startups companies is second only to Silicon Valley. At any given time there are 5000 new engineers needed on the market and the IT market cannot catch up with the demand.

So entrepreneurial spirit we have for sure what about the desire to study hard, work hard and become a software developer in the engineering department of such promising startups??? Nooooo, the most sought after profession in Israel is a lawyer, not an engineer. This puzzles me – why do people prefer to be unemployed lawyers than well-paid engineers. I have my own theory for that…

Everyone knows that recruiting new IT talent has become one of the biggest challenges that independent software vendors, (ISVs) are facing now. Putting aside my guts feelings, looking at the Fraunhofer Center for Experimental Software Engineering reports, cloud computing and mobile applications are the two paradigms that have increased the demand for software engineers. Also, a December 2010 report by the London based Centre for Economics and business research, estimated that cloud computing could add 2.4 million jobs in Europe’s biggest economies by 2015. I could go on with this and say that software engineering ( a field that has been definitely on the move for quite some time now),was voted the best job in US for 2012 by career guidance website Career Cast. Is this for real? It certainly is, as offshore development companies have talked about a growing demand for their services from the western countries. As a CEO of an offshore development company I face the same trend with growing demand for our services. The demand is there –it's a fact, but where are the western professionals? The answer is simple, the Western professional are almost nowhere to be found and the lack of skilled IT professionals in developed countries has become so great due to several reasons that can definitely bring some light into the matter:

• Constant Increasing Demand for Developers It’s a fact that more and more services and businesses are beginning to use software as a tool for their work, so in general the software engineers demand is increasing. The USA Bureau of Labor Statistics projects 30 percent job growth in coming years for the software developers. This is a more than encouraging percentage for any skilled student, but I doubt it’ll bring out all the expected IT professionals.(http://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm#tab-1)
• Salary & Compensation the IT world doesn’t play as an appealing option for the professionals in western countries more than other white collar professions. It’s not hard to find out why, since the IT industry average pay checks in the western world are similar to those of white collar profession.
 • Education and Science Studies Popularity If I think of education, not only the difficulty of the computer science studies, but also the big amount of time required for gaining enough experience to become skilled, determines the bright minds in the developed countries to avoid IT professions and go to business management faculties that are facing great increase in demand for their studies.

It’s not hard to see why software development companies turned their attention to developing countries, where the approach on IT professions is quite different. Why students in developing countries are not afraid of the hard work that a computer science brings about? Because this is their lucky ticket out of poverty and into the life style they desired, a leap from the lower class into the stability and advantages that the middle class has to offer. And as long as you’re there, you don’t want to get back to where you came from….so you keep the standards up and turn into the skilled developers so chased after by the software development countries abroad…like us. There’s also another plus that IT professions hold up their sleeves: the relocation option into a developing country. I think this is the greatest achievement for a IT professional in a developing country and the last touch of a profession that can offer it…all.

It’s high time that the kings in the East should rise…and they have. Next, I want to exemplify what I stated above by studying and comparing two fast emerging markets that have becomes kings in the offshore IT world: Ukraine and India.