Romania’s Competitive Assessment
From human resources to technology adoption, Romania is well positioned to compete internationally in the information technology market. In the following, we are looking closer at Romania’s key competitive strengths, the country’s direct competitors, comparative overview of Romania vis-à-vis these countries.
Romania has the largest pool of human capital in Southeastern Europe, with a total labor force of more than 9 mil. in 2011. In 2012, the Romanian IT sector employed more than 60,000 professionals. The majority of them (more than 80%) are technical specialists, such as software engineers, analysts, developers, and project managers. Management and business professionals represent less than 20% of the total.
With more than 300,000 tertiary education graduates per year, of which nearly 4,000 are pure computing graduates, Romania seems to have secured its pool of candidates in the information and communications technology sector.
The latest IDC-ANIS survey among local software companies revealed that Romania’s most threatening competitors when it comes to attracting offshore/nearshore investments are Russia (26% of respondents), Ukraine (23% of respondents), Bulgaria (17% of respondents), and Poland (16% of respondents). In the following, we analyse how Romania compares to the four abovementioned countries.
To varying degrees, economic and political factors influence the cost of running a business in a given country. Indicators such as GDP and FDI reflect the current state of the economy and thus the effect of the aforementioned political and regulatory factors. Strong macroeconomic indicators suggest a favorable climate for foreign investment.
Despite the recent economic turbulence in the region, the countries have continued on growth trajectories, reflected in the GDP per capita in all five. The country is relatively politically stable, enjoys a rather low unemployment rate, and provides a decent level of intellectual property rights. However, significant improvements are needed in terms of investing more into the educational system, attracting more foreign investment, and improving the overall economic conditions to increase the GDP per capita.
In terms of broadband adoption, Romania stands out, with the highest fixed broadband penetration by population and with one of the fastest broadband services in Europe and, arguably, worldwide. Though mobile broadband is less developed than in Poland and Bulgaria, with double-digit growth per year (28% in 2012 in number of connections), Romania is expected to close the gap fast.
In Romania 95.4% of the student population was studying English in 2011, meaning that more than 1.74 million students were studying English in Romania, while, in Poland, the number was 2.62 million.
When it comes to German, 156,236 students in Romania were studying the language in 2011, which amounted to 8.6% of students. By contrast, in Poland, due to the vicinity and the German influences, the number is ten times larger. In Romania, French is studied by students at higher levels than in any other country in CEE, with over 1.55 million students (85.0%) studying the language in the country in 2011. No other country in CEE came close to this total, with Poland next, at 131,609 students learning French.
The Bottom-line: Romania is well-positioned vis-à-vis its direct competitors
The main attraction for investors when considering Romania is the size of the country’s labor force and student population and the strong language skills that are available in the country’s labor force.
Romania is one of the largest countries in CEE and has a diverse linguistic profile, which makes it especially attractive for BPO operations that require client-facing interaction with customers. In addition, Romania is home to very capable programming talent, and many offshore/nearshore investors are utilizing the country for their R&D operations.