ZDNet published a recent focus on Eastern European technology outsourcing because the recently published AT Kearney 2016 Global Services Location Index suggests that 5 of the top 20 countries of the world for IT services are now inside Eastern Europe.
The top three countries globally are India, China, and Malaysia, but Eastern European countries doing well in the report include Poland, Bulgaria, Romania, Russia, and Latvia. Prague also stands out as one of the cities in Eastern Europe singled out for praise.
There are a couple of very interesting features in this report. First is that the countries and cities mentioned are clearly competing on what they can offer to clients. The focus is on cost-effectiveness and proximity to customers, so these regions are far more worried about how they can add value than offer a low price service.
Second is the awareness from many of these regions that nearshoring may not be enough to sustain a long-term IT industry. There is a clear focus in countries such as Poland, Romania, and Bulgaria that they need to build a complete start-up infrastructure if they are to create long-term success.
This approach acknowledges that new IT companies need to be nurtured and many delivery mechanisms today – such as the app store – bypass the traditional way that IT companies have operated. IT companies can often become product companies rather than just offering a pure IT service.
It’s exciting to see the European technology marketplace maturing and to see that Eastern Europe is doing so well even when compared to global competition.