It Can Take Decades To Create A Technology Hub As Strong As Eastern Europe’s

Horia Tomescu 24/10/2023 | 19:04

Silicon Valley isn’t only a geographic location – it’s a state of mind, an idea about economic regional development.

Technology is now more critical than ever in Europe, enabling industries to expand their leadership into emerging markets for the goods and services of the future.

Compared to the US, European tech companies have historically faced challenges in scaling due to fewer lead investors, multiple languages and payment methods, and greater regulatory burden.

Nevertheless, we’re experiencing a turnaround. The industry is heading into the second half of the year more apt to respond to gruelling macroeconomic conditions than ever before. 

Technology companies shape our lives, both online and offline, benefiting the local economy, primarily people and societies. Every few minutes, hours, and days, there are new discoveries.

Europe is increasing its investments in AI companies and paying close attention to climate and other purpose-driven companies.

In Amsterdam, the Netherlands, we can find one of the continent’s tech players, ahead of Paris and Berlin.

In recent years, businesses have noticed the potential that Eastern Europe offers as a place to grow their offering, find good employees, and get access to capital.

Many companies are interested in outsourcing at least part of their software development activities. Still, eastern Europe isn’t just for outsourcing. 

Eastern Europe Is The Best Place For Entrepreneurs To Launch Their Ventures 

Eastern Europe, comprising mainly the Baltics, is an economically mature region that offers a unique mix of great minds and talent.

It’s a fertile ground for tech start-ups, and it’s not hard to understand why, as the region brings about remarkable technical knowledge and value. Take Skype as an example.

The software that enables the world’s conversations was developed by Niklas Zennström, a Swedish entrepreneur and technology investor, Janus Friis, a Daish entrepreneur, and four Estonian developers.

Let’s not forget about UiPath, founded in Bucharest, which makes robotic automation software. Eastern Europe isn’t an overnight success – it was built on a generation of entrepreneurs who know how to do business. 

A hotspot for expansion, Eastern Europe is an exciting and attractive region for numerous companies, such as Accenture, IBM, and TCS. People used to migrate for a better life, pursuing greater jobs and challenging, lucrative careers.

Expansion is no longer for corporations, meaning start-ups, scale-ups, remote-first businesses, and so on, can tap into the Eastern European market if they know how to do it correctly.

If you don’t follow the rapidly unfolding events on social media, you don’t know that tech companies are fleeing to Eastern Europe. If you’re curious to know why, please continue reading. 

Tech Talent Pool Has A Real Game

Eastern Europe’s technology sector has such momentum that it continues to advance in spite of the Russo-Ukrainian war.

There’s an impressive talent pool, with many skilled and educated workers concentrated in Poland, Hungary, Romania, and Czechia. Hundreds of thousands of software developers in the region have become essential to the global economy.

Romania is now gearing up to become a promising tech hub in Eastern Europe, backed by a progressive government that promises to nurture innovation.

The largest country in southeastern Europe, Romania, has a deep talent pool, not to mention a strong reputation for the quality of its software development services. 

Expansion translates into potential for growth, but entering a new market is a challenging undertaking, and it takes the right team to succeed.

Not every talent pool is the same, meaning there’s no one-size-fits-all solution to improve your talent acquisition approach for the country you’re expanding to.

At any rate, if you don’t look far and wide, you’re, at best, paying over the odds for talent. Warsaw has its own deeptech hub, Tallinn accommodates more start-ups per capita than anywhere in Europe, and Prague is renowned for developing cybersecurity technology. 

By Tapping Into The Local Talent Market, Companies Can Expand Their Business Quicker 

A tech talent pool is like a hidden oasis abounding in some of the best resources an organization can find.

Founders who aren’t looking beyond their local regions are basically limiting their growth potential by not being able to scale.

Given the strength of Eastern Europe’s technology ecosystem, ignoring the region is a costly mistake that can end up spelling disaster for a once very promising business.

Since a pool of adequate talent is already in place, you can immediately access pre-screened and potentially qualified candidates. Nonetheless, it’s important to be prepared for the obstacles that might emerge on the path to long-term success. 

It’s paramount to understand and analyze the competitive landscape as you’re heading into a country that you’re completely unfamiliar with.

Europe is economically interconnected, yet it’s also extremely diverse, and the differences are shaped by geographical location, demography, institutional framework, and consumption patterns.

Comprehensive market research is of the essence. Once you have information about your competitors and customers, you can optimize your message and products (and services), strengthening credibility as you build relationships.

Building a presence in the market is vital, whether you team up with someone well-acquainted with the locale or setting up an office.  

Employers across different industries across Europe are trying to find the talent they need to survive and thrive, so the competition for skilled workers has long begun. It’s a good idea to leave the door open all the time.

Even if you don’t have an opening, you can make people’s presence worthwhile until a bona fide position becomes available.

Equally important is to be on the lookout, that is, to seek opportunities to make your company’s case to prospective employees by explaining the why behind your vision.

You can develop relationships with higher education institutions, such as Vilnius University, the University of Belgrade, and Babes-Bolyai University. 

Concluding Thoughts 

With an abundant pool of IT talent and technology graduates, a well-developed digital landscape, and salaries that are equal to or exceed the industry standard, Eastern Europe can be rightfully considered the next Silicon Valley.

Pedal-to-the-metal innovation happens every day, with many tech hubs continuing to flourish. You can set up your own business or a subsidiary branch of an existing business, but remember the requirements vary per country, even if all nations are encouraged to meet certain targets. 

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Horia Tomescu | 28/06/2024 | 12:25
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