With an overall maturity behind the one of Poland, the Czech Republic, Hungary or Slovakia, Romania has been the only country in the region – or even in Europe – where a small number of IT suppliers have captured almost the full market for complex IT solutions in the public sector and state-controlled companies (especially in energy, but also in transportation).
Regarding the local private market, there are signs of a slightly increasing local IT market maturity; the types of solutions and IT tools required show a growing interest in business-oriented technologies, with lower TCO and faster ROI.
The Romanian software and IT services sector has finally found its way to a sustainable development based on its two strong pillars: the offshore/nearshore activities and the domestic demand.
The PAC research conducted for ANIS (Employers’ Association of the Software and Services Industry in Romania) in 2015 shows that in 2014 the total software and IT services sector in Romania accounted for EUR 2.4 billion, following a growth of 12.5%, 4.5 times faster than the country’s GDP for the same period.
With a realistic potential to exceed EUR 4 billion (2.5% of the GDP) before 2020, the Romanian software and IT services industry has confirmed its potential to become a real pillar to the local economy, generating four times higher added value per head than the country’s economy’s average.
PAC has remarked the very interesting compensation between the two quite different segments that compose the Romanian software and IT services sector: the local market and the export of IT services (and, to a lower extent, software products).
Since 2008, these two segments have been developed contradictorily and we expect that, especially because of the lack of resources on the tech labor market, it is less than likely that both of them will see high acceleration at the same time.
According to PAC, since 2012, the foreign markets have exceeded the local demand for software and IT services, and they have generated almost EUR 1.5 billion in 2014, while the local market slightly grew at just EUR 930 million. Compared to 5 years ago, the export of software and IT services in 2015 is estimated to be 1 billion euro larger, while during the same period the domestic market demand increased by just 100 million euros.
Attracting big IT groups, IT operations of large non-IT multinationals, thousands of local entrepreneurs, as well as local and foreign financial investors, the highly skilled Romanian IT specialists are today one of the most important assets of the country.
Being based on its human capital and able to pay its specialists significantly higher-than-the-average salaries, the software and IT services sector is clearly a growth vector for the country’s reputation, wealth and stability.
Still very much attractive thanks to its lower salary costs when compared to EU or Western countries, Romania’s positioning is expected to change and become a market target for higher added-value services, R&D centers and significant domestic market projects that would include high-end solutions and technologies.
PAC has estimated the number of people employed in the software and IT industry in Romania at less than 80,000 in 2014, but a realistic forecast shows a growth up to more than 100,000 full-time employees by 2018.
Information cited in this article has been extracted from „Software and IT Services in Romania – Current Situation and Outlook in a Local and Global Environment” (2015), report commissioned by ANIS and developed by PAC – Pierre Audoin Consultants.
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