The future is banging at the Romanian IT&C industry’s door

Newsroom 03/12/2015 | 10:40

The Romanian IT industry needs to prepare for the next steps in its development as, 15 years from now, the IT job market will look completely different. Pundits at BR’s Foreign Investors Summit previewed what projects are in store, such as drone traffic regulations, additive manufacturing or bioinformatics. The efficiency of several state-implemented measures, such as state-aid schemes or the tax exemption for programmers were also up for debate.

 

Otilia Haraga

 

At the moment, the bulk of things that are produced by the Romanian IT&C industry in Romania are produced for export. There are some things that are produced for the internal market, especially for the state, because the Romanian internal IT market is dominated by the state. This is not a healthy development formula, according to Varujan Pambuccian, member of the Commission for Information Technology and Communications of the Chamber of Deputies, who opened the debate.

“There are two fields that are opening up right now in the third industrial revolution that will need financial and networking support. The first is that of additive manufacturing. I have submitted a rather ambitious national plan for this, which I hope will be approved; it is a plan for half a billion EUR for the next 5 years which should go to the education area because we need to train people over the next 10-15 years. A second program, that is very suitable for Romania that I have not yet submitted for approval, is a project for bioinformatics. Since June 2014, synthetic DNA can be patented in the US. These are the top priority things for me over the next period of time: moving the software industry in the intellectual property production, increasing additive manufacturing and the bioinformatics area,” said Pambuccian.

He also added that these developments require some help from the state, but not too much, because the main need is that of networking in major markets and this cannot be solved except through the effort of a community. “In Romania, to build a community is work for Sisyphus,” he said.

One field that is growing in importance and will soon be in need of regulation is that of drones.

“Fitting legal measures must be put into place concerning the drones. This area should be regulated, just like all the others, because after all, this will pose traffic issues. It is clear as day that an air traffic code must appear,” according to Pambuccian.

On the other hand, George Stan, chief investment officer at Teamnet Group, a Romanian company that manufactures drones locally, said that at European level, efforts are being made to establish new rules and regulations in this field. He also said some security measures are in order until the technology becomes mature. He said that in the drone business, there are currently three main areas of interest: the toy drones, the military fields and the middle field, which is where Teamnet stands, and where there is a great deal of promise. “We are the first Romanian company that exports services based on UAVs (unmanned aerial vehicles) made in Romania,” said Stan.

At the moment, the development of the Romanian IT industry is substantially supported through state-aid schemes.

“Financing percentages have remained very high, even in the second round of state-aid schemes. Except for Bucharest, with 15 percent, and the cities in the western part of Romania, with 35 percent, the rest of the country can benefit from 50 percent financing percentages. This is a great accomplishment for Romania, compared to other countries that could not keep this financing level in the second round,” Iulian Sorescu, associated partner, head of financial department at Noerr Finance and Tax said during the Foreign Investors Summit event organized by Business Review.

He recommended Romanian companies to hurry, if they wish to attract state financing, because the next 2-3 years are critical for attracting these funds.

However, entrepreneurs, such as Peter Barta, CEO of the Post Privatization Foundation, said the IT community feels the need also for other types of financing. Barta said that the Romanian market is still immature and companies are very dependent on this form of state aid.

“I don’t believe state aid is the best way to finance a whole sector. I would take the EUR 140 million and put them into an investment fund.” He added, “Romania is one of the few countries in the region that does not yet have a sovereign fund where state resources should be put. It needs a fund of the venture capital type. Most of the investments made in Romania are private equity. We are specialized in mergers and acquisitions, but we do not have instruments in the fund domain,” said Barta.

One way to make progress is to invest a great deal in education. “Going from saving cash under your mattress to multiplying your wealth by making investments on the stock exchange requires a great deal of education,” said Barta.

He also said that the Business Angel law that was adopted last year by the parliament is not functional and will not be functional because of over-regulation. “What is dragging us down in this field is the over-regulation and the lack of vision,” said Barta.

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