BR ANALYSIS | IT industry breaking the barriers of social distancing

The Romanian IT industry is one of the most competitive sectors in the local economy.

The main engines behind the industry’s success are the employees and their advanced skills.

The IT industry is one of the lucky ones in the COVID-19 pandemic, since most of its employees can work from home just as well as they do at the office. With a computer, a good internet connection and a small desk, they can set up an office at home.

A good example is DB Global Technology, part of Deutsche Bank, whose employees have been working from home since the beginning of March and whose operations are still within normal parameters. All 900 employees are keeping in touch through online socialising activities and are using applications for video and audio meetings, e-mails and internal platforms.

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“Over the last two weeks we have launched into production over 25 applications integrated into the bank’s mobile banking and trading systems, on which everyone involved worked from home as part of global teams,” said Marian Popa, general manager of DB Global Technology.

Global teams working through online apps is one of the things that give a competitive edge to IT companies over those in other industries.

Cities like Bucharest or Cluj are reliant on IT&C activities, pretty much like other European cities, like Paris, Dublin or London. Romania is well integrated in the global IT production chains; companies like Amazon, Deutsche Bank, Oracle, Microsoft or SAP have software developing centers here and they don’t seem to downgrade. DB Global Technology, for example, announced that it has 100 open positions for the Bucharest office and it is looking to hire.

Attractive market

Romania is on the list of the most attractive places for UK and US tech companies in the Global Expansion Tech Index, which takes into consideration factors like skills, regulatory landscape, communication infrastructure, and GDP growth. Romania is ranked 29th out of the 50 best locations for international expansion. Its attractiveness is visible through the funding local startups received in 2019. Companies like FintechOS or Typing DNA got millions of dollars through several investment rounds. The most innovative ideas are coming from industries like FinTech, biometrics, blockchain, robotic process automation, and HR solutions.

The main problem encountered in 2019 in the expansion of the IT industry was the lack of qualified workforce. There are over 120,000 employees working in the software development industry and the need for new people was at 15,000 per year. The COVID-19 crisis may reduce the number of employees needed in the industry, so it may be able to cover its workforce needs in the coming period.

Opportunities in crisis

Looking beyond the COVID-19 crisis, which will take a big toll on all economies, we should be optimistic about the future of the IT industry. Closed borders are not affecting communications, so those who are able to work through the internet infrastructure will come out as winners. Romania is well-positioned inside the European Union and has close relations with the United States, which gives us an edge in front of big players like China or India.

In the business service industry, the outsourcing sector, Romania has 131,000 employees that have also managed to keep operations going as normal even with 98 percent of employees working from home.

“At the end of 2019, we estimated a 10 percent increase in revenues for this year. The goal will probably be difficult to achieve in the current context,” said Dragos Stefan, president of Business Service Leaders Association.

He points out that services like Shared Service Center, Business Process Outsourcing, and Information Technology Outsourcing will find fewer clients after the crisis. Still, the IT industry will be one of the pillars on which the Romanian economy will start to grow again. In the context of self-isolation, the IT&C businesses are becoming more and more important.