=Paper=
{{Paper
|id=Vol-2870/paper99
|storemode=property
|title=The National System of Higher Education and Government Procurement for Its Services as Activators of the Development of IT Entrepreneurship
|pdfUrl=https://ceur-ws.org/Vol-2870/paper99.pdf
|volume=Vol-2870
|authors=Liubov Halkiv,Oleh Karyy,Ihor Kulyniak,Yaroslav Kis,Anastasiia Tsapulych
|dblpUrl=https://dblp.org/rec/conf/colins/HalkivKKKT21
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==The National System of Higher Education and Government Procurement for Its Services as Activators of the Development of IT Entrepreneurship==
https://ceur-ws.org/Vol-2870/paper99.pdf
The national system of higher education and government
procurement for its services as activators of the development
of IT entrepreneurship
Liubov Halkiva, Oleh Karyya, Ihor Kulyniaka, Yaroslav Kisa and Anastasiia Tsapulycha
a
Lviv Polytechnic National University, Stepan Bandera str, 12, Lviv, 79013, Ukraine
Abstract
The IT sector in today’s digitalized world plays the role of a driver of social progress and a
factor in increasing the competitiveness of countries. This leads to the intensification of
scientific research, which is devoted to this area. In this article, the authors analyze the
features of the development of IT entrepreneurship in Ukraine. Particular attention is paid to
the study of regional differences in the volumes of government procurement for the training
of IT specialists. To do this, the authors use cluster analysis, assess the extent of localization
and concentration of government procurement for the training of IT specialists in individual
clusters. To study the dynamics of indicators, the authors use trend models. The authors
substantiate that the growth of volumes and the concentration of government procurement for
the training of IT specialists by higher education institutions in the regions of Ukraine
activate the development of IT entrepreneurship in these regions.
Keywords 1
IT-sphere, IT entrepreneurship, higher education institutions, government procurement for
specialist training, clustering, localization, concentration, development trends
1. Introduction
The trends of the current stage of the evolution of national economies, global trends in the world
economy, and integral attributes of the innovative potential of the competitiveness of countries are as
follows:
1. Progress in the use of information technology.
2. Informatization spread to ever wider spheres of public life.
3. Increase in the demand for IT products.
The production of IT products (services, technologies, technological means of work, information
messages, databases, etc.) is carried out by business entities of the IT-sphere. The strengthening of the
IT-sphere social significance is due to the growing needs that have arisen thanks to the active process
of the economy’s digitalization. Adapting the behavior of market participants to new realities of the
digital age has led to an increase in the contribution of the IT sector to the GDP. As a result,
governments that strive for progress create attractive conditions for the IT business. The scientific and
expert environment responds to such changes by intensifying research aimed at forming a system of
knowledge of the IT-sphere development. One of the current areas of research is related to the factors
that stimulate IT entrepreneurship development. As part of this work, the authors will focus on
studying the special features of the IT entrepreneurship development in Ukraine and investigate the
impact of higher education (including government procurement for the training of IT specialists) on
the development and localization of IT entrepreneurship.
COLINS-2021: 5th International Conference on Computational Linguistics and Intelligent Systems, April 22–23, 2021, Kharkiv, Ukraine
EMAIL: lubov.i.halkiv@lpnu.ua (L. Halkiv); oleh.i.karyi@lpnu.ua (O. Karyy); ihor.y.kulyniak@lpnu.ua (I. Kulyniak);
yaroslav.p.kis@lpnu.ua (Y. Kis); Anastasiia.tsapulych.mnme.2019@lpnu.ua (А. Tsapulych)
ORCID: 0000-0001-5166-8674 (L. Halkiv); 0000-0002-1305-3043 (O. Karyy); 0000-0002-8135-4614 (I. Kulyniak); 0000-0003-3421-2725
(Y. Kis); 0000-0002-6907-8581 (А. Tsapulych)
© 2021 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
2. Related Works
In modern scientific works, the phrase IT is used quite often. Thus, L. E. Dovgan, A. V. Kozynets
[1], operate with this phrase, studying the ways to increase the competitiveness of enterprises;
P. Kutsyk, A. Protsykevych [2], characterizing the features of state regulation of the IT services
market; A. Shukan, A. Abdizhami, G. Ospanova, D Abdakimova [3], analyzing crime in the field of
information technology. The same phrase in the scientific literature is also used in studies examining
the problems of women’s employment in the IT-sphere (L. H. Skalli [4]); labor relations in the
context of digitalization of the economy (O. Khandii [5]); transformational changes in the region’s
economy under the influence of IT development (I. B. Shevchuk [6]). The terms IT technology, IT
services, IT export, IT knowledge, IT schools, IT specialties, IT infrastructure, etc. are used in this
connection. The term “Information Technology” is used to mean:
1. The science and activity of using computers and other electronic equipment to store and
send information [7].
2. A set of information processes using computer technology that provides high speed of data
processing, fast information retrieval, data dispersion, access to information sources [8].
3. A set of methods, production processes, and software and hardware integrated to collect,
process, store, distribute, display and use information in the interests of its users [9].
The Ukrainian terms “IT-sphere”, “IT field”, “IT sector” are used synonymously. A similar
meaning to these terms is embedded in the term “software industry”, which occurs in the Resolution
of the Cabinet of Ministers of Ukraine [10]. The authors emphasize the special feature of the IT-
sphere, which means that the products created by it (services provided) are the result of a combination
of software and hardware, hardware information, databases, and intelligent human resources. In the
market of IT products, producers can include individual IT companies, IT services of non-specialized
companies, IT outsourcing entities, IT consultants, specialists who independently develop IT
products; e-information data storage devices.
The formation of an intellectual component of human capital is significantly ensured by the
functioning of higher education institutions (L. I. Galkiv [11]), Sunil Mithas, M. S. Krishnan [12]
argue that firms pay IT professionals much higher bonuses if they have earned an MBA degree.
Several studies are devoted to the impact of the introduction of information technology in higher
education [13][14][15]. Unlike other scientists, the authors focus on enhancing IT entrepreneurship
under the influence of a higher education factor. In Ukraine, it is important to consider not only the
system of higher education as such a factor but also government procurement for IT specialist
training.
3. Methods
The authors use a set of scientific methods, in particular: content analysis – to substantiate the
meaning of the term “IT-sphere” and the practice of its use; dynamics modeling – to build trends in
the number of business entities and the number of employees by type of economic activity
“Information and Telecommunications”, etc.; cluster analysis – to identify groups of regions by the
volume of government procurement for the training of specialists in the field of knowledge
“Information Technology”; distribution analyses – to evaluate the degree of concentration and
localization of individual indicators in clusters; regression analysis – to assess the dependence of the
volume of the government procurement on the number of licensed places; tabular and graphical
methods – to present and visualize the data.
4. Results and Discussion
The progressive development of entrepreneurship in the IT-sphere of Ukraine is confirmed by an
increase in the number of business entities by type of economic activity “Information and
Telecommunications” (ITC). Their number increased by 3.7 times (from 55.9 thousand units to 206.1
thousand units) from 2010 to 2019. Such a strong growth was mainly provided by the increase in the
number of individual entrepreneurs (FOPs) by 4.4 times (by 16.6 thousand annually). Although the
number of enterprises increased by 20.6% during the same period, its growth was not tendentious.
Therefore, the dynamics of the number of enterprises, in contrast to the number of individual
entrepreneurs, is not approximated by a linear trend (Figure 1:). A more obvious dynamics in terms of
business entities is demonstrated by the indicator of the number of employees: declining by 9.9
thousand persons annually at enterprises, it grew annually by 16.9 thousand persons in terms of
individual entrepreneurs. The authors also conclude the intensification of business development by
type of economic activity of ITC relying on the following fact: the growth rate of the employed by
entities the predominant type of economic activity of which is “Information and
Telecommunications”, annually leaves behind the national indicator.
number of business entities, thousand, units number of the employed, thousand, people
Figure 1: Dynamics of the number of business entities and the employed by type of economic ITC in
Ukraine in 2010-2019.
Source: made by the authors according to the data [16]
The traditional and stereotypical positioning of the IT-sphere as a “male activity” has recently
changed: the number of women in the IT-sphere is growing from year to year. At the same time, the
development of women’s entrepreneurship in the field of IT in Ukraine demonstrates positive
dynamics. From 2016 to 2020, the number of individual enterprises founded by men increased by
80.6% in this area, while that of women more than tripled (by 216.0 %). In 2017-2020, these figures
were 75.3% and 95.7%, respectively. In IT-sphere this indicator increased by 102.2%. As a result, the
share of individual entrepreneurs in the IT-sector founded by women has tended to grow: in 2016 it
was 16%, in 2017 and 2018 – 23%, in 2019 – 24%, in 2020 – 25%. From 2016 to 2020, the share of
women in the IT sector increased from 16% to 25% [17]. Among those who have been working in the
IT sector for less than a year, this share is 36%. Currently, the largest number of women are employed
in non-technical positions – HR, marketing, and administrative activities. In recent years, women are
becoming more active in technical positions.
The modern Ukrainian IT space has more than 1,600 companies. The locomotive of its
development is human capital. In 2020, the 50 largest IT companies in Ukraine employed more than
68.4 thousand IT specialists and put 3.6 thousand vacancies on the labor market. From 2017 to 2020,
the number of IT specialists in the TOP-50 IT companies of Ukraine increased by 52.4%. To analyze
the same indicator over a longer period, the authors selected the IT companies that operated from
2011 to 2020. These entities have more than tripled the number of specialists. However, only two
leaders from the TOP-5 (EPAM Ukraine and SoftServe) strengthened their positions in the ranking of
the largest employers. This situation testifies to the effectiveness of market mechanisms in Ukraine,
which provide new companies with opportunities not only to enter the market but also to occupy a
high share. In the TOP-50 IT companies of Ukraine, the share of young people (who have been
working in the market for less than 5 years) exceeds 50% [18].
In Ukraine, the IT sector provides more than 20% of exported services and sends billions of
hryvnias to the Ukrainian budget. Its revenue is growing 4-5 times faster than the global IT industry
average [19]. Today, Ukraine is identified in the world as an attractive manufacturer in the field of
outsourcing of business processes and IT. The special features of the development of the IT-sphere in
Ukraine include, among other things, the presence of a significant gap between the income of its
specialists and income in the other areas of economic activity. Therefore, this area is considered an
attractive place of employment and attracts young people. According to the representative studies,
50% of IT employees in Ukraine in 2020 were not older than 29 years [20].
The range of products of the IT-sphere of Ukraine has also evolved. If at first the provision of
basic services prevailed, later the IT-sphere gradually shifted to the creation of complex research
decisions, IT consulting, strategic design, engineering, and support of digital decisions. The domestic
IT companies are developing the sectoral field of their activity, moving from the cooperation with
customers from abroad, who specialize in software development, to the direct cooperation with
international representatives of various fields: medicine, automotive, finance, transport, logistics, etc.
The progress of the IT-sphere in Ukraine is due to a strong educational base, which provides the
industry with first-class specialists. Graduates of schools and colleges increasingly choose educational
institutions with institutes, faculties, or departments that teach disciplines related to the field of IT.
In the 21st century governments of developed countries, the public, and the business community
have recognized higher education as a key driver of social development. The qualitative parameters of
the state’s higher education system set the vectors and rates of the progress of its human capital.
According to the research results of OECD’s annual Education at a Glance – 2020 [21], in OECD
countries, the average income of masters and bachelors is 89% and 43% higher than the income of
people with secondary education, respectively. Higher education provides a wide range of learning
outcomes, among which entrepreneurial competence plays an important part. This gives grounds to
identify higher education as an activator of business development.
In Ukraine, over the last decade, there has been a tendency to reduce the number of higher
education institutions in the form of universities, academies, institutes (HEI), and the number of
students (Figure 2:). These indicators reached the maximum value at the beginning of the 2006/07
academic year (351 units and 2,372.5 thousand people, respectively), after which they decreased
annually on average by 7.6 units and 106.2 thousand people, respectively.
Figure 2: Dynamics of the HEIs and the number of students in Ukraine
Source: compiled by the authors according to the data [22]
Besides, there is a localization of HEIs in the regional dimension. To systematize the information
array of initial data, the authors used clustering technology, which was tested in MS Excel. The four
clusters were distinguished (Figure 3:). The capital appeared in the first one (A), where the largest
number of HEIs is located. The second one (B) is represented by Kharkiv region, in which the number
of HEIs is 49% of the HEIs of Kyiv. The third one (C) includes Dnipropetrovsk, Lviv, and Odesa
regions, where 24% of HEIs is concentrated.
Figure 3: Segmentation map of the regions of Ukraine according to the distribution of HEIs in 2019-
2020
Source: calculated by the authors according to the data [22]
For in-depth analysis of the clustering results, averaging methods were used (Table 1), localization
(L) and concentration (K) indicators:
; (1)
(2)
where dj, Dj is the share by the number of the set elements;
Dj is the share in the volume of values of the feature in the set.
The estimated values of К, calculated for the indicators of the number of HEIs (0.381) and the
number of students (0.394), indicate a moderate level of concentration in clusters А, B, C (Lj > 1),
signaling the presence of regional asymmetries in the higher education in Ukraine.
Table 1
Indicators by the clusters of HEIs in Ukraine in 2019-2020
Number of Average Coefficient of Average number of Coefficient of
Clusters regions, number of the localization students, thousand the localization
units HEIs, units, of HEIs people of students
A 1 65.0 5,76 324.30 6,40
B 1 32.0 2,84 150.40 2,97
C 3 22.3 1,98 93.33 1,84
D 20 5.9 0,52 25.57 0,50
Source: calculated by the authors according to the data [22]
The scientific and expert environment, in particular the International Organization for
Standardization (ISO) [23], characterizing the market of IT services, focuses on the IT knowledge of
its producers. This allows the authors to hypothetically assume that the volume of government
procurement for the training of higher education-seeking students for the IT-sector may contribute to
the activation of IT entrepreneurship. To verify this assumption, the analysis of government
procurement volumes in 2019 and 2020 is performed (Table 2 and Table 3). The following specialties
of the field of knowledge “Information Technology” were chosen for the analysis [24]: Software
Engineering; Computer Science; Computer Engineering; System Analysis; Cyber Security;
Information Systems and Technologies.
Table 2
Initial data for the clustering of Ukraine’s regions by the volumes of procurement for specialist
training in the field of knowledge “Information Technology” in 2019
Licensed procurement volume Maximum procurement volume
Regions of Ukraine full-time extra-mural full-time extra-mural
education education education education
Vinnytsia region 690 65 215 5
Volyn region 315 100 92 29
Dnipropetrovsk 836 254 307 40
region
Donetsk region 0 0 0 0
Zhytomyr region 330 130 133 27
Transcarpathian 345 135 110 19
region
Zaporizhzhia region 769 421 186 45
Ivano-Frankivsk 383 77 135 10
region
Kyiv region 0 0 0 0
Kirovohrad region 180 75 38 10
Kyiv 6312 1888 2792 91
Luhansk region 0 0 0 0
Lviv region 2263 292 1128 37
Mykolaiv region 695 150 211 29
Odesa region 1657 470 562 64
Poltava region 335 30 90 5
Rivne region 63 12 13 0
Sumy region 10 0 6 0
Ternopil region 990 435 220 25
Kharkiv region 5469 946 1568 80
Kherson region 580 250 93 5
Khmelnytskyi region 330 15 137 0
Cherkasy region 832 123 130 20
Chernivtsi region 600 45 173 7
Chernihiv region 300 35 124 0
Source: compiled by the authors according to the data [25]
Table 3
Initial data for the clustering of Ukraine’s regions by the volumes of procurement for specialist
training in the field of knowledge “Information Technology” in 2020
Licensed procurement volume Maximum procurement volume
Regions of Ukraine full-time extra-mural full-time extra-mural
education education education education
Vinnytsia region 553 42 204 5
Volyn region 305 100 88 20
Dnipropetrovsk 1827 605 516 84
region
Donetsk region 235 0 46 0
Zhytomyr region 365 85 132 20
Transcarpathian 345 135 105 14
region
Zaporizhzhia region 815 400 171 35
Ivano-Frankivsk 460 0 132 0
region
Kyiv region 0 0 0 0
Kirovohrad region 170 35 33 10
Kyiv 6515 1935 2825 129
Luhansk region 0 0 0 0
Lviv region 2503 267 1196 38
Mykolaiv region 605 380 137 30
Odesa region 2162 734 531 66
Poltava region 345 20 62 6
Rivne region 300 110 66 30
Sumy region 220 30 140 10
Ternopil region 1040 430 173 10
Kharkiv region 6708 823 1565 70
Kherson region 361 104 66 0
Khmelnytskyi region 360 15 120 0
Cherkasy region 611 44 105 19
Chernivtsi region 590 25 153 5
Chernihiv region 230 25 113 0
Source: compiled by the authors according to the data [25]
In addition to the data on the maximum volume of the government procurement for full-time
and extra-mural education, the authors operated with the relevant indicators of licensed volumes [24].
The volumes of the latter significantly affect the places of government procurement (Figure 4:) and
vary in the regions of the country.
3500 3500
y = 0,3242x - 35,951 y = 0,355x - 36,084
3000 3000
R² = 0,9524 R² = 0,9752
2500 2500
2000 2000
1500 1500
1000 1000
500 500
0 0
-500 0 2000 4000 6000 8000 10000 -500 0 2000 4000 6000 8000 10000
2019 2020
Figure 4: Dependence of the volume of government procurement on the number of licensed places
for the field of knowledge “Information Technology” in Ukraine in 2019 and 2020
Source: calculated by the authors according to the data [25]
As a result of cluster analysis, according to the entry in 2019, four groups were distinguished
(Figure 5:). The capital appeared in the first one (A), which has the largest volume of government
procurement in Ukraine (8,200 places). The second cluster (B) is represented by Kharkiv region, in
which the volume of government procurement was 6,415 places. Cluster C contained 9 regions of
Ukraine, in which the government procurement varied from 121 to 1,165 places. In the last cluster
(D), which included 56% of the regions of Ukraine, the volume of government procurement did not
exceed 220 places.
Figure 5: Cartogram of the division of Ukraine’s regions into clusters according to the volume of
procurement for specialist training in the field of knowledge “Information Technology” in 2019
Source: made up by the authors
After clustering the regions in 2020, the authors also obtained four groups of regions (Figure 6:).
However, compared to 2019, there are several changes: Kharkiv region and the city of Kyiv remained
in separate clusters, changing positions in favor of Kharkiv region, where there is an increase in
government procurement by 16% relative to the capital; the number of regions in the third group
(cluster C), which includes Dnipropetrovsk, Lviv, and Odesa regions, decreases threefold; the number
of cluster D increases to 20 regions against the background of increasing the average number of
licensed government procurement in this cluster from 272 places to 395.
Figure 6: Cartogram of the division of Ukraine’s regions into clusters according to the volume of
procurement for specialist training in the field of knowledge “Information Technology” in 2020
Source: made up by the authors
The average values of the studied indicators for the formed clusters of Ukraine’s regions are given
in Table 4. The estimated values of К(2019) = 0.83; К(2020) = 0.78, calculated for the indicator of
maximum procurement, show a high level of its concentration. In 2019, the government procurement
was concentrated in two clusters (L(cluster A) = 14.5; L(cluster B) = 8.3); in 2020 – in three (L(cluster A) = 7.4;
L(cluster B) = 13.4; L(cluster C) = 1.2). That is, we can talk about the presence of regional asymmetries in the
training of IT professionals at the expense of the state.
Table 4
Clustered procurement volumes for specialist training in the field of knowledge “Information
Technology” in Ukraine in 2019 and 2020
Number Licensed procurement volume Maximum procurement volume
of
Clusters full-time extra-mural full-time extra-mural
Ukraine’s
regions education education education education
2019
А 1 6312 1888 2792 91
B 1 5469 946 1568 80
C 9 965 264 330 35
D 14 273 53 81 4
2020
А 1 6708 823 1565 70
B 1 6515 1935 2825 129
C 3 2164 535 748 63
D 20 395.5 99 102.3 10.7
Source: calculated by the authors according to the data [26]
The authors emphasize positive changes.
Firstly, the volumes of government procurement for specialist training of the IT-sphere in Ukraine
in 2019-2020 increased by 3.0%. This trend has been observed for a long time. Its parameters at the
level of a separate institution of higher education, which is represented by the authors of this study –
Lviv Polytechnic National University, are shown in Figure 7:.
Figure 7: Government procurement for the specialties of Lviv Polytechnic National University
Source: made up by the authors according to the data [26]
Secondly, the regional differences are diminishing. Thus, if in 2019 the localization of government
procurement was typical of the city of Kyiv and Kharkiv region, in 2020 it also became typical of
Lviv, Dnipropetrovsk, and Odesa regions. The data obtained above harmonize with the data on IT
clusters [27]: the ranks of the TOP-5 regions of Ukraine by the number of IT companies, the number
of their staff, and the volume of government procurement for the field of knowledge “Information
Technology” coincide (Table 5). This serves as a basis for establishing the validity of this
hypothetical assumption.
Table 5
TOP-5 regions of Ukraine by the number of IT companies, their employees, and the volume of
government procurement for IT specialist training
Volume of the government
Number of IT Number of IT
procurement for IT
companies companies’ employees
Regions specialist training
thousand
units rank rank places rank
people
Kyiv 1194 1 76 1 2954 1
Kharkiv region 500 2 31 2 1635 2
Lviv region 461 3 25 3 1234 3
Dnipropetrovsk region 378 4 16 4 600 4
Odesa region 150 5 10 5 597 5
Source: made up by the authors according to the data [25][26][27]
It is obvious that the connection between the indicators of business development in the IT-sphere
and the volume of government procurement for specialist training in the field of knowledge
“Information Technology” cannot be functional. In particular, there is a time lag between the year of
entering the HEI and the year of employment. Often, labor activity is already practiced during
studying at the HEI. However, there is no doubt that the higher education environment forms the
entrepreneurial potential for activating the IT-sphere. In turn, this contributes to the development of
entrepreneurship, which is focused on innovation [28].
It is worth noting that in the early 2000s, graduates of Ukrainian universities who studied
information technology, started business structures that specialized in creating software. The
enthusiasm of student youth gave impetus to the development of the IT-sphere in Ukraine. Coaching
has contributed to the development of new types of managers [29]. Starting with small projects, the IT
companies started to enter the world market. Accordingly, there was a significant influx of personnel
in this area.
Thus, the authors have concluded that the state, by financing the education of students in
specialties related to the IT-sphere, stimulates the development of IT entrepreneurship.
5. Conclusions
The progressive development of entrepreneurship in the IT-sphere of Ukraine is confirmed by the
accelerated increase in the number of business entities and their employees; a rapid increase in the
volume of activity and export potential; improving the image among employers. If these trends
continue, its role in the country’s economy will increase.
In Ukraine, there are regional asymmetries in the localization of higher education institutions and
the volume of government procurement for the field of knowledge “Information Technology”. It is
substantiated that the volumes of the government procurement for the training of IT specialists by
higher education institutions stimulate the development of IT entrepreneurship and influence the
localization of IT clusters.
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