IT professionals on the market
value of Romanian IT sector in 2019
potential software development partners
IT students graduates annually from +50 universities
Size: 238,391 sq km, ranked 81st in the world by area (comparable to Oregon)
Population: 21.23 million, ranked 60th in the world by population
Time zone: (GMT+3)
Government: unitary semi-presidential republic
Official languages: Romanian
GDP per capita, PPP: $28,800 (2020 est.)
Human Development Index: 0.828 (ranked 48/189)
Currency: Romanian leu (RON)
Economy: mixed economy, fast-growing
Main industries: automobile, petrochemicals, cement and construction, aircraft, textiles, food, mining, metallurgy, arms
Major urban areas (over 500K people): Bucharest
Ease of doing business: ranked 55th, DB score - 73.3
Digital competitiveness index: #50 out of 63 | #52 Knowledge #47 Technology #49 Future readiness
Corruption perception index: 69/198
The WE Forum Global Competitiveness Report: #59, with a year to ear improvement in score
A.T. Kearney Global Services Location Index: 28th
Universities: nearly 100 HE institutions (both state-owned and private), with eleven universities listed on QS World University Rankings® 2022 (>1000)
The largest IT companies: Bitdefender, UiPath, SoftVision
IT industry market share: 6% of GDP, 1.2% share in employment, 300 IT companies, ca. 100,000 IT specialists
EF English Proficiency Index: 15/112 countries, 13th out of 35 European countries
International Olympiad in Informatics: 119 medals, 32 gold, 53 silver, 34 bronze
The least familiar of the featured countries, Romania is emerging as a hidden gem for technology outsourcing and offshoring. Several key factors contribute to this: high quality of education, strong communication skills, and blossoming innovation ecosystems.
These aspects stem from a long-term, concerted Romanian authorities' effort to increase the country's competitiveness, improve school instruction quality, and adopt higher study programs that support tech-oriented education.
The Romanian IT industry has flourished over the last 20 years, reaching $7 billion in 2019. Foreign capital is the major contributor to that growth, accounting for 73% of the market revenue. Romanian companies generate the remaining 27%. The expansion of tech companies on the moderately-sized Romanian market creates an urgent demand for IT professionals, which remains largely unmet in a country of 21 million people.
With the current workforce of 100,000-120,000 people, Romania needs at least 180,000 more qualified staff to fill all the open jobs on the ICT market. The skills shortage resulting from mass migrations and the aging society is so significant that it is estimated to generate total losses of over $8.3 billion to the Romanian economy across all sectors.
In the context of outsourcing IT skills, the country bears much resemblance to Poland. Both countries get high scores on the human development index, ease of doing business, and global competitiveness, and rank exceptionally high in the English proficiency index.
When we consider the costs of retaining IT specialists in Romania, they are slightly over the Ukrainian rates and below the Polish average.
Typical hour rates range between $25-49/hours, with premium vendors charging over $50.
Average salaries for software developers, according to IT Outsourcing Review:
However, extreme pay discrepancies occur between cities and regions, following the IT market's heavy concentration in the country's capital, Bucharest (it brings in 63% of IT market revenues).
While the Romanian IT outsourcing market cannot compete with Ukraine or Poland in size, it stays on a par with the two regional leaders regarding the quality of software skills. The country can also claim a strong advantage in the variety of foreign languages spoken by its citizens. 17% of Romanians speak English, about 10% French or Hungarian, nearly 5% know Italian, and over 3% - German. Romanians' multilingual talents underpin the country's attractiveness, especially in IT support and operations outsourcing.
Before the pandemic, Romania experienced steady growth in FDIs, with over half of all investments made in the digital and business services sectors. COVID-19 has hit the country hard, but analysts give Romania high chances of recovery in the post-pandemic world, conditional upon its determination to improve safety and security, accelerate digital transformation, and modernize infrastructure.
Due to its cost-competitiveness combined with relative political stability, Romania emerges as a very attractive place for global IT giants to set up their regional offices. In fact, over the last decade, the volume of foreign investment and team sizes of tech giants in Romania have quadrupled.
The technology sector's contribution to the Romanian economy has grown impressively over the last ten years to become an essential pillar of its development. The country readily takes advantage of foreign capital flows. Still, the benefits are mutual: KeysFin's research suggests that the Romanian IT sector is the most profitable investment for US companies such as Amazon, Adobe, or Microsoft.
Entrepreneurship tops the lists of priorities for the Romanian authorities, which shows in various investment incentives available for eligible enterprises.
Nearly 100 industrial parks are spread across the country (about two-thirds of them fully operational), offering local and foreign residents exemptions on land, building, and urban planning tax, as well as an exemption for taxes charged for changing land destination.
Additionally, the following fiscal incentives are available for investors:
→ All the above information is based on the data provided on a state-owned website, investromania.gov.ro. Moreover, Deloitte's 2019 report Investing in Romania comprises a detailed analysis of fiscal incentives, corporate and business law, and Romania's labor market.
There are nearly 50 public universities in Romania, with almost the same number of private HE institutions. Currently, more than 500,000 students study there, as compared to over 700,000 a decade earlier.
This sharp decrease in students' numbers is largely attributed to the population decline resulting from mass migration throughout the last ten years. Transitioning to the Bologna system and restructuring schools and universities has also played its part.
Despite certain inefficiencies of the Romanian tertiary education system, it's crucial to highlight the country authorities' efforts to improve the teaching quality. At present, the Romanian tertiary education system is undergoing a strategic transformation.
As part of the national reform, the country hopes to increase its competitiveness by ensuring equal access and participation of underrepresented groups and minorities in higher education. Projects are also being implemented to promote student entrepreneurship and furnish young Romanians with skills and knowledge well-aligned with the evolving labor market needs.
Ranked 41st in the Global Startup Rankings (up by four spots since 2020), Romania has already managed to build a name for its ecosystem, even though it's the youngest European nation for enterprises.
Investors flock to the country lured by its vibrant startup scene, a booming economy, decent price-to-quality ratio, and technical diversity. Remarkably, Romania's startups' funding is quite diverse, with a vast local and foreign investment pipeline.
The Romanian startup scene experienced a landmark moment in 2018 when UiPath became the first local startup to obtain unicorn status. The company's enormous success provided an incentive for many active, young entrepreneurs to seek funding to support their innovation-driven businesses.
Overall, the startup ecosystem in the country can be seen as highly dynamic, with strong fluctuations occurring year on year. For example, 2019 brought about a surge in investment rounds, with half of them between $100,000 and $2 million (with UiPath accounting for a massive 92.5% of the total funding volume that Romanian startups received that year). This trend subsided in 2020, which saw a sharp decrease in the financing volume by 60%. And the first half of 2021, brought 60 investment rounds to the local startups, worth over $92.6 million in total, providing a considerable boost to the Romanian IT sector.
Bucharest, Cluj-Napoca, Timișoara
HR/recruitment, fintech, marketing and analytics, enterprise software, security
FintechOS – this open-source, out-of-the-box intelligent business automation platform is used by some of the top finance, tech, and consulting brands in the world. That’s impressive, considering that the company was founded merely four years ago. Since then, it has accumulated $16 million in three funding rounds to continue expansion in the US, European, and SouthEast Asia markets.
The State of Central & East Europe IT Outsourcing and Offshoring 2022
Belarus • Poland • Romania • Ukraine
Central & East European countries are world-renowned for their software developers who are said to be one of the best on the globe.
There are over 1 million software developers in Central & East Europe, skilled in various technologies and experienced in every industry.
Software developers' hiring rates in Central & East Europe can be 2-3x lower when compared to the US and Western Europe.
Great English skills and vast experience in working on international projects. Central & East European devs have been supporting startups worldwide for years now.
Ideamotive has a huge pool of talent. Don’t just settle for someone: find a person who understands your project and has the competencies you need.
President, Luminate Enterprises
We’ve been extremely satisfied. We work with multiple partners, but they’re our main supplier because of the quality of their work.
Co-founder & CTO of Memcare
They understand and navigate the industry to deliver an outcome that will truly stand out. Despite a heavily saturated market, they’ve delivered creative solutions that I haven’t seen before.
President, Rierra INC
They are very flexible, providing a team of developers on short notice and scaling the size as needed. Their team meets tight deadlines, including some that only give them a few hours to do the work.
Event Manager, Swiss Federal Institute of Technology Lausanne
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