Why Is It Worth Outsourcing to Eastern Europe?
Aug 04, 2022
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Experts claim that digital transformation spending will reach $1.8 trillion by 2025. This means that the IT market will continue to grow together with the demand for qualified specialists needed for its transformation.
Statistics also show that Europe, and especially the countries of its eastern part, are the optimal solution to outsource web development because they can offer the services of highly qualified developers at a relatively low cost. However, choosing the right country for such purposes is still not easy.
In this article, we will discuss which Eastern European countries are the best for IT outsourcing, their advantages and prospects.
4 Reasons to Outsource to the Eastern European Market
The IT market of Eastern Europe is a whole field of opportunities for profitable outsourcing. Here are some main reasons why you should consider this option.
Impressive Talent Pool
The number of technical specialists in Eastern Europe is more than 1.3 million, and it’s constantly growing. Only Ukraine offers almost 300,000 specialists in this field with constant annual growth of 25-30%. Ukraine’s closest competitors in terms of talent are Hungary and Poland. Together, there are more than 700,000 technical specialists in these countries.
In addition to qualified engineers, these regions have a large managerial, designer, and analytical pool. More than half of all IT specialists work in outsourcing software development companies.
Proper Tech Education
A great advantage of the Eastern European IT industry is that it is supported by an effective system of technical education. Mathematics and natural sciences are the main subjects of general education, which provides an excellent basis for obtaining professional technical degrees.
Education in these countries is affordable and often provided free of charge. In Ukraine, for example, 1,700 educational institutions have IT bachelor’s degree programs. In addition, the region is developing IT academies and non-governmental training programs for technical talents.
Convenient Time Zones
The convenience of working with Eastern European companies also lies in the fact that the difference in time zones is insignificant. Depending on the country, it can be just a few hours, and for comparison, this difference in the case of Asia or the USA can reach 7-8 hours.
Another strength of the region is a solid IT community, which is open and dynamically growing. IT companies and universities actively cooperate in creating a comfortable space for the growth of technical talents. Many successful global corporations have opened their offices in Eastern Europe and started training centers.
The Main Reasons to Outsource to Ukraine
Ukraine’s IT industry is worth 5 billion dollars, more than 8% of its exports. This is an indispensable part of the country’s economic development, especially in difficult wartime.
There are several main reasons for outsourcing to Ukraine:
- The Ukrainian government offers favorable tax conditions for foreign investors and minimizes interference in the work of companies. For this, the Diia City project was developed, a kind of digital country within the country, to allow foreigners to control their investments better, get work permits more quickly, and reduce bureaucracy to a minimum.
- Ukrainian developers are very close to Western Europe people mentally, so investors don’t have to face cultural differences. Universities and non-formal organizations provide specialists with high-quality IT education.
- At the same time, the rate of a qualified Ukrainian developer is much lower than in the USA or Western Europe.
It’s also worth noting the diversity of the Ukrainian talent pool. There are specialists from various fields, including AI and machine learning, blockchain, gaming, fintech, regtech, etc. Thanks to this, such giants as Apple, Amazon, Oracle, Microsoft, IBM, Samsung Electronics, etc., have opened more than 100 R&D centers in the country.
The Best Destinations to Outsource Development in Ukraine
Before the full-scale invasion of Russia, the leading IT centers were Kyiv, Lviv, Kharkiv, Dnipro, and Odesa. Today the picture has changed, but specialists are gradually returning to Kyiv and Dnipro.
Today, the best locations for outsourcing are Lviv, Ivano-Frankivsk and Kyiv. These cities have a high development dynamic, a vibrant IT sector, large communities of developers (IT Cluster, etc.) and are more attractive from the investment point of view.
Other popular IT Outsourcing Countries in Eastern Europe
A few more countries in Eastern Europe are worth considering for outsourcing.
Poland has one of the highest economic growth rates in all of Europe, and the technical and scientific potential of the country is developing just as rapidly. According to a Statista study, income from professional, scientific and technical activities in Poland could grow to $8.90 billion by 2025.
There are enough qualified specialists in the country that are perfect for outsourcing app development. In addition, there are an excellent technical environment and R&D centers of giants like Google and Amazon.
Such international companies as Hewlett Packard, Oracle, Luxoft have offices and training centers in Romania. This is due to the rapid growth of the industry (20% annually) and a large number of qualified specialists. According to experts’ forecasts, the revenue from information technology and computer services in Romania will grow to more than $500 million by 2025.
Another reason for Romania’s popularity is the relatively low tax burden for foreign investors. It, of course, doesn’t offer such outsourcing privileges as Ukraine, but it also has a favorable tax system.
Bulgaria is an excellent destination for outsourcing, as it currently accounts for 5.5% of the country’s GDP and will continue to grow. More than 200 educational institutions train specialists in the technical field, and the cost of IT services is still affordable.
In addition, Bulgaria entered the list of the ten most desirable countries worldwide for outsourcing.
Eastern European countries are great for IT services outsourcing for several reasons. First, they provide an impressive talent pool and relatively affordable service prices. Secondly, such countries offer their citizens access to affordable and sometimes accessible high-level technical education.
In addition, Eastern European companies have created a comfortable ecosystem for the development of the IT industry. They are also in a convenient time zone.
Poland, Bulgaria, Romania, and Ukraine are the best options for outsourcing. The last one offers favorable tax conditions and a large talent pool. We will be pleased to consult you if you are interested in this option. Feel free to contact us in any convenient way.