Mark Kobayashi-Hillary

Readers of the US newspaper The New York Times cannot have failed to notice a recent feature on the number of hi-tech businesses working in Eastern Europe.

Accenture in Prague is working on behalf of companies such as Rhodia and SAP. The newspaper piece comments: “The United States may turn to India to fill many of its call-centre jobs and the like. But Western Europe is turning more frequently these days to its own backyard, transforming a few urban centres of the former Communist bloc into the Bangalores of Europe.”

One might question whether Bangalore is actually the kind of city any European would aspire to emulate. Ask any Indian who is not from Bangalore what they think of the southern hi-tech hub and they will tell you that the weather is nice, but you have to tolerate horrendous traffic, an airport that is miles from the city with no rail link, and sky high restaurant and bar prices.

IBM, Dell, and Morgan Stanley have all outsourced functions of their business to Eastern Europe too – ensuring that this is not just about Western Europe sending work to the East. The Americans are also working with Eastern Europe.

The New York Times spoke to Robert H. Brown, an outsourcing analyst at Gartner Dataquest, who expects growth in Eastern Europe to outstrip the rest of the market in the next four years, expanding close to 30 percent by 2010, compared with 25 percent for the global market. Those are exciting growth figures. This is a market not only growing steadily out of the recession; it’s growing faster than anywhere else in the world.

And what’s the key difference in this region compared to India? European business culture, political stability inside the European Union, and the ability work in English, German, French, Russian, and any other local language. You can’t find that in Bangalore. I should know. I once worked for a French company in Bangalore and we struggled to even find a receptionist who could answer the phone using French.

When the A8 nations joined the European Union in 2004 – expanding the union to the east – it was expected that many would migrate west in search of work. Many people did, but now many have gone home because high quality work in technology industry has come to them. The New York Times reports: “In the Czech Republic, unemployment fell by the start of this year to 7.1 percent from 7.8 percent in 2002; in Poland, joblessness dropped to 13.4 percent from 20.2 percent five years ago; and in Slovakia, to 11.6 percent from 19.7 percent, according to Eurostat.”

That’s positive news. The brightest and the best companies in Eastern Europe have been trying hard to alert those thinking of working with India that there is a more local alternative. If a heavyweight paper such as the New York Times is now shining a light on the region then hopefully more senior executives will come to see what is on offer.

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