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5 Insights on Outsourcing to the Balkans

A quick search on Google on the potential tech scene in South East Europe, also known as the Balkans, reveals some interesting articles and facts on the potential of the countries of the region.

Outsourcing services in the Balkans is possible. No there’s no war going on and yes there are skilled developers, designers and much more.

A quick search on Google on the potential tech scene in South East Europe, also known as the Balkans, reveals some interesting articles and facts on the potential of the countries of the region.

Everywhere you might face the line that South East Europe is driven by highly skilled (skills that reflect a tradition of strong math and engineering education that goes back to communist times) and certified workforce, with technical expertise, low prices, no language barrier and quite the proximity to Europe, which makes things quite convenient for communication and flight connectivity to European Cities. And on top of everything the Balkans is not shy of entrepreneurs.

When it comes to cutting-edge research and technological development one, of course, thinks first of Silicon Valley. But chances are that you might be missing the action. Let’s name a few that might change your opinion.

Nordeus – A company from Serbia that has become one of the most successful and biggest gaming companies of Europe, thanks to their hit game Top Eleven. It has offices across the world and more than 150 employees, out of which according to the head of the company Branko Milutinovic, only one has left the team.

Rimac – The Tesla of the Balkans and based in Croatia, Rimac develops and produces high-performance electric vehicles, drivetrain and battery systems. Rimac Automobili’s first model, the Concept One, is known as the world’s fastest production electric vehicle. The company has more than 50 employees and is continuing to it’s research and development in the Electric Car Industry.

Launchub & Eleven – Two of the coolest acceleration programs of the region are these two, the first one with a 9M Seed and Acceleration Fund and investments of up to 200,000 Euros per company for 8-10% equity, and the second one with a 12M Venture Capital Fund. It’s not much compared to the 10 time larger funds from Western Europe, however to the Balkans this capital is more than welcome. The number of VC funds is increasing.

Telerik –  Telerik, is a company based in Bulgaria, which enables its 1.4 million strong developer community to create compelling user experiences across cloud, web, mobile and desktop applications, and last year it was acquired by Progress Software Corporation for 262.5 million. It employs over 700 people in different offices across the Globe.

While we are here in the acquiring list we can also mention when Facebook announced in July that it was buying LiveRail, a video ad company co-founded by two Romanians, for a reported $400 million to $500 million.

 

Outsourcing to the Balkans – Bulgaria, a top destination

In 2014, the 2014 AT Kearney Global Services Location Index ranked Bulgaria, a country that has a 10% flat tax rate, as one of the best outsourcing destinations of the Balkans and enlisted it among the Top 10 most attractive worldwide outsourcing destinations. Bulgaria is home to advanced local and international companies, including the names of companies like Ubisoft, HP, IBM or SAP. Romania is also on the spot with a solid ground of talent that come out of the network of universities, who have a strong-background in German-speaking, but other language skills are also easy to find.

While we look at the tech scene of the smaller regional countries like Macedonia, Albania and Kosovo, it’s hard to mention tech companies of the likes of those mentioned above. We’re not talking here about companies that deal with government procurement and the resale of tech equipment, but those who deliver and develop their own products or outsourced ones.

 

A moment of growth

In Albania, there’s iKub which has a couple of services in line and in use throughout the market, or EasyPay which serves as the local Paypal of Albania, offering amazing mobile and online services throughout Albania since December 2009.

Kosova, is moving forward in an interesting way as well, sometimes faster and sometimes slower. Outsourcing seems to become interesting more and more every year, especially because the country doesn’t apply VAT to companies that outsource, but cases like when 3CIS was put under fire by the tax authority didn’t help in 2014. The good side of the story is that the company is slowly recovering and gaining new contracts ahead in the Telecom Industry, where Kosovo is quite strong on Certified CCNA and CCNP Professionals, and this company among the Telecom Providers is one of the strongest employers, with cases where they had up to 170 people engaged in different projects.

Other companies that are delivering on outsourcing services include companies like Appsix – specialized in mobile application development with the whole set of services from UX/UI up to Backend/API Design; Sprigs, which is a Kosovar-Dutch company offering software development services to local and foreign customers, with a great combination of Dutch Flavor and Local Development skills.

Frakton and ProjectGraphics, two creative companies deliver outsourcing services for clients in the US and Europe. The strong Albanian diaspora in Switzerland, Austria and Germany makes a good point of sales for the establishment of back offices in Kosovo. This way of working has grown rapidly in the last years, and we have cases like Baruti which has manged to offer top quality call center services to the Swiss market and others.

As one of the fastest growing industries in Macedonia, with a growth rate of 47% in the last 5 years, the tech and software industry is of growing importance for the overall economic development of the country. There’s a number of countries which outsource to Macedonia and the number of local startups that are making a mark on the map is growing. g6 is one of them, with their focus on outsourcing and own product development as well.

 

Not under the radar anymore

But the demand is growing and if the salary growth keeps this pace in Bulgaria and Romania, this could be a great chance for Western Balkans to attract big companies which need outsourcing partners. What it takes is the right government approach in policy making, the adjustment of the educational programs based on market needs which is still a present challenge for everyone and the attention to practical matters of foreign donor investment, which in some cases result in the expenditure of millions and the results of a couples. Things are changing in Eastern Europe and it’s becoming competitive and lucrative for everyone in the tech sector.

It’s not unknown anymore. It’s not under the radar anymore. It has started to become boring and fade away from the international media as a region known for troublesome times, war and troubles between neighbors. This is not the case anymore. The real question which comes to mind, in the end, is: Is it keeping up?

1 reply on “5 Insights on Outsourcing to the Balkans”

yes…also the swiss companies prefer to get a good service even if its in balkan…similar to baruti there is also http://www.quality-calls.ch which has mangeded to offer even higher quality call center services to the Swiss market and others.

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