Ukraine is a recognized offshore outsourcing leader

Ukrainian offshore outsourcing companies have been providing software development services since early 1990s. Main factors contributing to the development of the industry included availability of the highly-educated engineering and scientific workforce that had to refocus its profile when the Soviet Union fell apart, and government investment in science shrank as a result of the shift to a market economy.
According to goaleurope.com study conducted in 2007, the offshore outsourcing industry in Ukraine in 2006 accounted for $246 Million in revenue, and employed over 7500 people. Advocates of outsourcing to Ukraine name a number of advantages; they are:

Abundant Resources

There is still a significant availability of the highly-qualified resources, since Ukraine was a major hub of scientific research for Soviet Union, especially for its Space Programme. Ukrainian National Academy of Sciences has accounted for up to 40% of all Soviet research. With a population of almost 50 million people, and over 30 000 computer graduates, it offers a strong potential for supplying qualified workforce. A challenge is in matching the ever growing demand of the outsourcing industry in software developers experienced in the new technologies, and a lag of educational system disinclined in employing practitioners to teach new courses in Computer Sciences. The gap between the education and the needs of outsourcing suppliers is not always in the number of graduates the education system supplies each year. It is in what is being taught. Fortunately software development companies teach specific courses to the university students, offer them practical placements during the study period, and have an option to offer permanent jobs to the best of them.
Ukraine and other Eastern European Outsourcing Destinations
Ukrainian population is second largest in the Eastern European region after Russia. It beats Poland by almost 10 million, and more than twice bigger than the fourth biggest country Romania. Whilst the size of population is significant, the corresponding education budget was the smallest per capita in 2006. However with the decision of the Ukrainian government to increase the education spending to 6.52% of GDP, the percentage will be highest in Eastern Europe. Also, it lags behind the newly elected EU members in receiving FDI, which reflect a risk and downside associated with theinvestment outside of the EU.
Certainly, with the large population and poor economic conditions Ukrainian standards of living are much lower than those in the well-developed countries. This again suggests availability of labour arbitrage opportunities in outsourcing industry, provided that the educational system is reformed to satisfy demands of the outsourcing companies.

Investment attractiveness

The Outsourcing industry has a stronger argument to attract new customers, as the democratic pro-Western government took hold after the Orange revolution. Indeed, foreign direct investments in 2005 have grown by 81% and in 2006 have reached a total of over US$23 Billion (over the period of 1991 - 2006). Kyiv has received US$5.5 Billion, Dnipropetrovsk - US$2.3 Billion, and Kharkiv - US$1 Billion.
There is a significant number of the Western companies establishing their presence in Ukraine. Amongst them are Hewlett-Packard, Johnson & Johnson, Ericsson, Siemens, Kraft Foods, Cisco Systems, Delloitte, PwC, KPMG, GE, Mittal Steel and many others.