Part two: Bulgaria as an outsourcing destination
Is it time for Romania to get into the CEE outsourcing fast lane? Many observers say yes, it seems.
Is Romania set for a big leap forward - driven by a number of positive economic drivers, of which technology could be a major component?
Analysts say there's real evidence for such a view, though there remain some clear obstacles to the Romanian tech market taking off and challenging some of the other CEE powerhouses such as Bulgaria and Slovakia. For example, the EU currently rates the country as officially 28th out of all 28 of its member states when it comes to its internal digital economy.
But that same source, perhaps surprisingly, also acknowledges that Romanians are the second best served in the EU when it comes to getting superfast broadband, at 60 per cent of fixed subscriptions last year, up from 55 per cent in 2013 and 69 per cent of its homes and businesses can get 30 Mbps.
Romania is the 17th largest of all the European Union economies. And the fact of its close geographical proximity to Western Europe and excellent air and transport connections to the whole region, a growing and well-trained information and communications technology workforce, high language skills and very competitive price and labour costs, are also highly suggestive facts that many commentators see as suggesting real potential.
The country was recently (2012) listed by The Times as in the top ten of all global outsourcing destinations, after Poland in fifth place and ahead of South Africa, Russia, Vietnam and The Philippines. The outsourcing sector is being powered by a large, well-trained ICT workforce of just under 120,000, forming an economic contribution of just under five billion euros per annum by the early part of this decade, after the 2008 economic crisis.
It may also come as a surprise to some that in 2011, the widely-followed A.T.Kearney Global Services Location Index put the country at 25th in terms of its outsourcing attractiveness for organisations – just after Bulgaria and Poland but ahead of Hungary, the Czech Republic and Slovakia.
The vast bulk of this ICT activity centres on the country's capital, Bucharest, which is the base for 67 per cent of all Romania's ICT turnover, as well as the majority (56 per cent) of all its tech professionals and 60 per cent of GDP for software and services, hardware and telecom. Indeed, 27 of the 30 biggest Romanian software and services firms and no less than 190 of the 290 companies with sales north of a million euros are based there.
Perhaps it is time, then, to see that after a genuine dip in its fortunes, Romania is back on track? This is the view of at least one expert authority, the CEEMEA Group, which in its April 2015 market commentary stated that the nation should be seen as starting to detach itself from the rather poor Balkan market of South-East Europe and actually should be classed as a core Central and Eastern European market along with Poland, Hungary and the Czech Republic.
“Most factors seem to ensure consolidated and steady/good growth [in the country], with only possible Eurozone stagnation and Ukrainian escalation as dark clouds on the horizon,” confirms its researcher, Dr David Thorniley.
Though it may still face one or two more bumps in the road, the good news is that Romania does tick many boxes -– that the country’s Romania's potential as an outsourcing powerhouse can't be denied for very much longer.
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Part four: Czech Republic as an outsourcing destination