STRATEGIC DEVELOPMENT OF IT OUTSOURCING IN UKRAINE: ADAPTATION OF BUSINESS MODELS AND INSTITUTIONAL INCENTIVES OF THE DIIA.CITY ECOSYSTEM
TL;DR
It is proved that profit reinvestment via the tax on distributed capital and specialized gig-contracts serve as key institutional factors for business formalization, financial stability, and human capital legalization and the special Diia.City regime has proved highly effective in ensuring sector resilience.
Abstract
This article provides a comprehensive study of the functioning and transformation of the information technology outsourcing sector in Ukraine under conditions of martial law and global digital competition. It analyzes the factors behind the declining efficiency of the traditional transactional model of software export services and substantiates the necessity of a transition of tech companies toward high-margin product and hybrid business models. The complex impact of exogenous challenges, including skilled human capital relocation, heightened security risks, and contracting foreign demand, is highlighted as forcing domestic companies to revise their operational strategies. The purpose of the article is to provide theoretical and empirical substantiation of strategic development directions for Ukrainian IT outsourcing through business model adaptation and evaluating the impact of the special tax and legal regime Diia.City on stabilizing and scaling the industry’s export potential. The author’s contribution lies in a systematic analysis of the dynamics of the Diia.City legal and tax framework. It is proved that profit reinvestment via the tax on distributed capital and specialized gig-contracts serve as key institutional factors for business formalization, financial stability, and human capital legalization. The scientific novelty of the obtained results consists in deepening the theoretical and methodological foundations of technology sector resilience under crisis shocks through the conceptualization of the hybrid business model as an optimal adaptive mechanism. The evaluation of institutional regulation effectiveness has been further developed by identifying a three-tiered employment structure that balances subcontracting flexibility with socio-legal protections. The practical significance of the findings lies in their applicability by state authorities when formulating economic recovery strategies, as well as by company executives making decisions on service portfolio restructuring, risk diversification, and developing proprietary solutions. The main conclusions confirm that preserving the industry’s export potential requires moving away from basic subcontracting toward creating high added value, while the special Diia.City regime has proved highly effective in ensuring sector resilience.