The Top 10 IT outsourcing destinations in Eastern Europe
It is always a crucial decision to choose the right IT outsourcing destination in the highly competitive software development industry. Many companies select Eastern Europe over other destinations around the world because of the availability of a wide range of expertise and talent pools, as well as the availability of reliable tech partners.
Furthermore, Eastern European countries like Ukraine, Poland, Hungary, Belarus, and Romania are experiencing constant growth in IT and technological innovation. Additionally, these countries offer tax incentives, lower labour costs, and an educated and English-speaking workforce. In this article, you will explore the top 10 IT outsourcing destinations in Eastern Europe. Here is a list of the countries you can look into.
- Czech Republic
Poland is one of the top-rated East European destinations. The country’s reputation for having reached a certain level of maturity in the labour market, its longstanding membership in the EU, its Western culture and mindset, and its fluency in English are why Poland is considered one. The country has an impressive tech talent pool of almost 500,000 ICT professionals specialising in rare and familiar technologies and programming languages such as Java, C#, C/C++, JS, .NET, and Python.
- Poland has five significant tech hubs: Lodz, Warsaw, Wroclaw, Krakow, and Poznan.
- Almost 40% of the country’s tech experts work for IT outsourcing firms.
- Most IT specialists in Poland work for companies that offer non-IT services, global shared services, and business process outsourcing.
- In Tholons’ ranking of the Top 100 outsourcing destinations, Poland came in at number nine.
Being Europe’s leading destination for software outsourcing, Ukraine is steadily progressing year by year in the software development sector. It is the preferred choice of many companies due to its vast talent pool, extensive expertise the country’s professionals can offer, cost-effectiveness when outsourcing, and many others.
On a rough note, approximately 300,000 ICT professionals in Ukraine and about 60% work for IT outsourcing and IT outstaffing companies. Moreover, the country has gained much recognition in the IT industry, including:
- 42nd position in the Kearney Global Services Location list
- 4th in its category in the 2022 Global Innovation Index by the WIPO.
- 12 Ukrainian IT companies, including N-iX, were featured in the 2022 Global Outsourcing 100 list by the International Association of Outsourcing Professionals (IAOP) as the best outsourcing providers.
Romania is a country that tops the outsourcing industry because of its location, high-quality services, and high English proficiency among developers. Since they joined the EU in 2007, the country’s IT industry has levelled up, attracting many global companies like Hewlett-Packard, Huawei, Ericsson, and Gameloft. The country is home to more than 250 outsourcing companies.
In Romania, the IT industry employs approximately 192,000 ICT specialists. The significant achievements of the company as an outsourcing destination are the following:
- Listed as number 12 in the TopCoder lists and number 23 in SkillValue
- 17th in the EF EPI English proficiency rankings
- 32nd position according to the Kearney Global Services Location Index
The Czech Republic is another popular destination, with around 199,000 ICT professionals in the information and communication sector. Every year, the country witnesses a 10% increase in IT outsourcing. This growth is because the industry is undertaking several high-value-added projects, both local and international.
Global leaders like Google, Microsoft, Oracle, CA, RedHat, Skype, NetSuite, Tieto, and IBM, for instance, have chosen the nation for both direct investment and outsourcing. Moreover, the Czech Republic is the birthplace of well-known worldwide IT brands like Avast, AVG, and Socialbakers.
Hungary has the largest share of outsourcing in the East European IT market. When finding potential tech partners, you can choose from over 125 companies in the country. Many multinational companies have established their Research and Development centres in the country, such as Siemens, Microsoft, Deloitte, Ericsson, Nokia, TATA, etc. Several R&D tax incentives offered by the Hungarian government have aided in attracting them.
- It has around 175,500 specialists employed in the ICT sector.
- In terms of SkillValue, Hungarian developers come in fourth.
- Ranked 31st in Tholons Services Globalisation City Index in 2021
The country cannot be left out among the top 10 IT outsourcing destinations in Eastern Europe. Bulgarian service providers are renowned for delivering quality services. The country has benefited mainly from the presence of global IT giant Hewlett-Packard, which employs more than 6,000 IT specialists, not including the 101,400 ICT specialists already employed.
- Every year, about 2,000 ICT graduates join the workforce, and over 220 educational institutions provide a wide range of technical student opportunities.
- The country is home to a little more than 200 businesses that serve clients in the financial and business sectors, information technology, healthcare, and e-commerce.
- Multinational IT corporations like HP, SAP, Johnson Controls, Oracle, VMware, CISCO, ProSyst, and Atos have R&D offices in Bulgaria.
- Furthermore, the nation is ranked 11th in Emerging Europe’s IT Competitiveness Ranking because of its sophisticated IT infrastructure and welcoming business environment.
Among the popular ones, Belarus is so far one of the largely under-explored IT outsourcing locations in Eastern Europe, even though its IT sector occupies 3rd place in its economy. More than 80,000 programmers comprise the nation’s robust talent pool, and more than 20,000 new experts join the industry annually after graduation. Belarus has four main IT hubs where software development can be outsourced: Vitebsk, Grodno, Gomel, and Minsk. In terms of living expenses and IT outsourcing, Belarus is a very cost-effective destination.
It is another fast-growing IT outsourcing location but not as popular as other destinations. You can hire and get quality services from highly skilled, multilingual professional developers who can handle complex projects and help you achieve your business goals.
Slovakia is a country where over 114,000 tech professionals are employed in the ICT sector, around 5% of the country’s workforce. Each year, Slovak universities award degrees in technology specialisation to about 1,600 specialists. It is said that there are about 70 companies for the number of outsourcing service providers in various fields in the country. The biggest hubs are Bratislava and Kosice. Since joining the EU in 2004, the country has gained traction in the IT industry and shown growth in the number of software development companies by 3.8% per year from 2018 – 2023.
In Lithuania, the ICT sector employs about 53,000 specialists, and each year, about 700 new experts graduate. The country has piqued the interest of Google, AIG, and Nasdaq, who have decided to establish regional development centres there. Moreover, several multinational corporations have already established R&D and IT development centres in Lithuania, including Uber, IBM, Wix, HP, Virtustream, and Unity.
- About a hundred vendors are listed on Clutch for software development and IT outsourcing services in Lithuania.
- These businesses have experience providing solutions for e-commerce, healthcare, business, and fintech.
- Overall, significant investments have been made in Lithuanian IT companies in recent years, which has fueled the expansion and advancement of the sector there.
So, if you are thinking of outsourcing your software development projects, these are the top 10 IT outsourcing destinations in Eastern Europe you can choose from. When you choose one, you should find a balance between the availability of the resources, costs, skills, customer experience, etc. Check out the article and explore all the countries so that you can choose according to your preferences.
The author: Sascha Thattil works at Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT department.