Modern IT and Economic Trends: What to Expect From the Crisis and Global Fascination with Artificial Intelligence?

Volodymyr Khodonovych, founder of IT company Perfsol, and Roman Pavliuk, vice president and chief digital strategy officer at Intellias, hosted a charity stream. The experts shared their opinions on the main trends in the modern IT world and raised funds for prosthetics for the Ukrainian military and war victims.

Сurrent Situation in the Economy and the IT Sector in Ukraine and the World

Volodymyr: Roman, you are a true expert in digital transformation and teach the course Microeconomics in IT Companies, a joint project of Lviv IT Cluster and Lviv Polytechnic. Therefore, it is interesting to hear your opinion on the current situation in the economy and the IT sector in Ukraine and the world.

Roman: We need to remember when and where the general decline began. Many people in the world think that the crisis started because of the war in Ukraine. In fact, this is not true at all. It all started in the 2010s when there was a severe surge in populism. It was then that social media began to develop rapidly, preventing the state from tightly controlling the media, as everyone could say what they thought from their own "rostrum."

When we approached the Covid-19 crisis, there was a certain fear that we would not survive it because society would collapse. This led to a fatal mistake – printing a lot of money – both in the US and Europe. For example, the money supply in America increased fivefold. This led to quite interesting processes. People were able to buy shares in various companies. The question arose quite logically: in which area to invest? Manufacturing was in decline, and tourism was even more so because no one was traveling anywhere. The solution was found – investing in the IT sector. A massive inflow of funds into the IT sector began. And all this against the backdrop of inflation, which reached 15% in the EU, and then the war in Ukraine.

It was decided to reduce the amount of money available in the market to resolve the situation. To do this, the discount rate and interest rates on loans were raised. Suddenly, money became too expensive, and spending it became unprofitable. The process began when everyone started cutting costs. This affected the IT sector as well, with avalanche-like cuts, including in Ukraine. A huge reduction occurred in the fourth quarter of 2022.

Volodymyr: What are the forecasts? Have we already reached the bottom, or should we expect things to get worse?

Roman: In mathematical terms, if we look at the stages of the current crisis as the first and second derivatives, we can say that the first one was negative, while the second one is already starting to become zero, meaning that there is growth.

As for the forecasts, it may happen that there will be some improvement in the second quarter. This applies to outsourcing and the grocery market because companies have money; they are just waiting for the right time to invest it.

About Modern IT Trends: Artificial Intelligence and Chat GPT

Volodymyr: What can you say about modern IT trends? In particular, artificial intelligence and Chat GPT.

Roman: The first trend I want to mention is, unfortunately, a negative one. It is donation fraud. And artificial intelligence is not the least in the fight against it.

First of all, we should understand how AI differs from the human brain. Of course, there are many differences, but the fundamental one is this: in the human brain, memory and processor are combined into a single unit, while in artificial intelligence, they exist separately. This explains that humans think abstractly; we cannot quickly reproduce accurate information and think systematically. AI was created to compensate for our shortcomings. It will be everywhere, and above all, in the security sector.

If we talk about donation fraud, it will look something like this. We will have an AI-based personal assistant to analyze our actions and transactions and draw conclusions: is it safe to transfer funds to a particular account?

As for Chat GPT, I often hear the question: won't it take away the human right to work? No, it won't. First, the work done through Chat GPT is not subject to plagiarism checks and does not reveal the topic. Secondly, people constantly evolve and do not want to rest on their laurels; they need to continually improve themselves and create better products. This is probably why there is still no total dominance of sites or systems auto-generated through Chat GPT.

About Military-tech and Life After the War

Volodymyr: Let's talk about Military-tech. Do you think we will be able to sell our latest technologies to other companies?

Roman: It depends on several factors. First, it depends on ourselves; whether we can take risks and take this step. Secondly, it is the legal framework. It is complicated to be creative in Ukraine because our labor code is still socialist (it is based on the code of the Ukrainian SSR). To change this situation, we need to reboot our legislation and outlook to understand exactly what we want: welfare, prosperity, and a strong economy. This is the transformation that most developed countries have gone through.

If we have specific goals and desires, and our legislation is conducive to them, it is quite possible to bring our developments to the market. First of all, these are technologies that speed up the transfer of information. For example, Starlink, messaging systems, etc. The second trend is the reduction in the cost of weapons development through small-scale, distributed production. We are talking about smart mines and bombs that are guided by a computer and hit the target according to precise GPS coordinates.

Volodymyr: How will the military return after the war and adapt to a normal, peaceful life?

Roman: There are several interesting ideas in this regard. For example, many soldiers have been injured and have mobility problems. For them, small-scale production will be a way out – people can be quickly trained to assemble equipment according to the project. This is one of the industries where such people can find a job and earn quite good money. We can also consider the IT sector, but I wouldn't bet on it because it requires fundamental training.

It is also worth mentioning that there will be two categories of people who will need to look for work after returning to a peaceful life. The first are those who went through the war and suffered physical and psychological trauma. The second are those who will be returning from abroad. Again, I would bet on electronics. Speaking of IT, there is one more interesting point here: all specialists in this field will perform alternative service. It is about mentoring, supervision, and participation in educational programs on a volunteer basis. You may have to work with a group of students or with former or current military personnel.

Today's Most Popular AI and Blockchain Technologies

Roman: Volodymyr, I would like to hear your opinion on today's most popular AI and blockchain technologies. Are they really the future?

Volodymyr: The cryptocurrency revolution currently taking place is similar to the situation with .coms in the 2000s. The fall of FTX is a normal development of the market; when the weaker ones fall away, the domain becomes more regulated and stronger. Now there is a trend that every startup should be based on AI or blockchain. It is not yet possible to say whether these technologies are the future, but it is a real trend. The clients we cooperate with use artificial intelligence and blockchain in their projects in one way or another. One of the areas of their application is finance: crypto payments have become a full-fledged alternative to SWIFT and SEPA.

Roman: I think that cryptocurrency is a bubble. Those who made money on it were lucky. As for the blockchain, it is a reliable technology for transmitting information, and it will continue to develop. In terms of its significance, its creation is similar to the invention of asymmetric cryptographic sets. They formed the basis of SSL and TLS encryption.

As for the development of banking in general, there will be a strong emphasis on personalization, as AI-based applications require user data. Blockchain technology ensures privacy. The key is to find a balance in this. A breakthrough would be a solution that could create a customer profile with a minimum amount of data.

The situation with blockchain is now similar to that with 20 years ago. The only difference is that blockchain is a real value that has practical applications.

Current Changes in the IT Services Sector

Volodymyr: And lastly, what changes are taking place in the IT services sector?

Roman: Nowadays, all customers rely on the quality of the final product. Another trend is that clients come not with a ready-made idea but with a problem, so IT specialists have to expand their knowledge and skills.

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