ASSESSMENT OF THE COMPETITIVE ENVIRONMENT OF IT COMPANIES

Abstract

B a c k g r o u n d . Ukraine's IT services market has remained a dynamic and export-oriented segment of the economy during the full-scale war, while undergoing consolidation, exits, mergers and acquisitions (M&A), and restructuring processes. Small and medium-sized enterprises (SMEs) are gaining visibility, yet competitive conditions remain ambiguous due to business groups comprising multiple legal entities. This study focuses on Ukraine's IT services market, examining the competitive environment and structural market asymmetries from 2022 to 2024. It aims to evaluate the level and dynamics of competition by analyzing market concentration and structural asymmetries during this period.

M e t h o d s . A system-structural approach is applied, using concentration metrics for firms classified under Classificator of Types of Economic Activities (KVED) sections 62 and 63. Indicators include the Herfindahl–Hirschman Index (HHI), concentration ratios (CR₃, CR₅), the Gini Index, the Entropy Index, the Linda Index, and variance-based measures. Market shares are calculated from revenue; the SME share in total market revenue is also tracked. Descriptive statistics are complemented by comparative analysis across 2022–2024 on a research sample of 411 companies (13 large), with particular attention to the gap between the number of legal entities and verified active companies.

R e s u l t s . The market exhibits complex corporate structures: 8.6 thousand legal entities provided IT services in 2024, but only 2,118 companies were verified as active. HHI fell from 433.68 (2022) to 170.86 (2024), signalling stronger competition. CR₃ declined from 26.18% to 17.77%, and CR₅ from 34.13% to 23.31%; the SME revenue share rose from 52.7% to 62.4%. Distributionsensitive measures reveal a hybrid structure: high entropy (E = 5.09) and low variance indicate broad participation, whereas the Gini Index (0.601), the Linda Index (169.2%), and the Lorenz curve point to a dominant core in the upper segment. By business model, outsourcing firms prevail (47% in 2024), followed by product (31%), mixed (19%), and outstaffing (3%).

C o n c l u s i o n s . Ukraine's IT services market is moving toward a more competitive, decentralized configuration while an oligopolistic core persists. The simultaneous rise of SMEs and the weakening of top players' shares reduces monopolization risks, enhances resilience, and suggests growing value-added potential. Policy should balance SME entry and scaling with support for high-value, export-oriented capabilities through cooperation with market leaders. The proposed methodology can be applied to other high-tech markets, while future research should examine the links between concentration dynamics, financial stability, and the role of business models in shaping the competitive environment.