The largest useful created by the ICT sector in emerging Europe is within Poland – at over 20 billion euros in 2022, far in front of Romania (12.3 billion euros) and Czechia (11.9 billion euros), second and third in the region, respectively.
A report published captured by Emerging Europe, The way forward for IT in Emerging Europe, suggests that while the gap will narrow in the future years, it is estimated that Poland continues to dominate.
Poland also leads the region when it comes to ICT services exported from emerging Europe in 2022, at 7.69 billion euros. Romania and Czechia again take second and third positions, with 5.59 billion euros and 4.1 billion euros.
The largest average annual rise in the quantity of ICT services exported during 2022-19 was in Lithuania, at 31 per cent, accompanied by Georgia (28 percent) and Poland (27 per cent).
Exports of ICT services from Estonia may only function as the 10th largest in the region, but due to its small population it holds first position in terms of export of ICT services per capita, at 678 euros per capita, followed by Latvia (443 euros per capita) and Czechia (383 euros per capita).
Poland exports 3.Four times fewer ICT services per capita than Estonia, Romania 2.Three times less, Ukraine 4.1 times less.
In relation to ICT services exports as a percentage of GDP, Belarus led the way in which in 2022, at 3.9 per cent. There are just two countries (besides Belarus) who export an amount of ICT services equal to or more than three percent of GDP – Estonia (3.2 per cent) and Serbia (3.1 percent). The least significant ICT services exports originated from Azerbaijan – only 0.12 per cent of GDP, Georgia – 0.65 per cent, Albania – 0.71 percent, and Kosovo – 0.95 per cent.
It’s not every not so good news for the countries at the end on the table, however. While Georgia exported just 55.9 million euros price of computer services in 2022, this represented a rise of just one,270 per cent on 2022.
The worth of computer services exports from Azerbaijan meanwhile was up 95 per cent in 2022 when compared with 2022, as well as in Kosovo 58 percent.
Covid-19 means more reliance on ICT
“During the pandemic, the earth has be dependent on both software and hardware ICT products,” Jaroslaw Granat, head of client engagement at Future Processing in Poland, tells Emerging Europe.
“Thanks to that particular, many more companies perceive IT investments as a means to accelerate implementation of their strategy as well as to gain a benefit over market competition. It has been common for often shelved e-commerce projects to become revived and given additional impetus. What’s more, the development of cloud-based solutions and digital transformation in both public and private sectors have become crucial factors driving the ICT market, too,” Granat adds.
“The Covid-19 pandemic, as strange as it might sound, also led to the introduction of the ICT industry,” adds Irina Kiptikova, corporate communications director in the IBA Group. “The work-from-home model required further infrastructure modifications and facilitated the spread of recent IT and communication technologies among businesses and people.”
“Another thing we have been observing is a diminishing availability of IT specialists. This leads to the rapidly increasing costs of recruitment, companies becoming open to the hybrid, remotely based, and residential office work models. The scarcity of skilled IT specialists can also be the reason for the still increasing salaries in the industry where, comparing along with other economy sectors, they're already high,” Granat says.
“A new governmental plan for socioeconomic reforms is being announced: the Polish New Order. We know the main postulates and that we can safely assume that our IT specialists will be impacted by increased tax rates, bearing in mind their high salaries. Now you ask ,: how will companies and employers react, once the employment market at this time is associated with employees?”, Granat adds.
“What we anticipate when it comes to salaries in Poland is that they will end up similar to those in the Western Europe.
“Taking the technical side into consideration, there will definitely be an augmented interest in automation (RPA), machine learning, AI, and knowledge analysis. Moreover, systems and knowledge security will become higher for the companies to keep,” he adds.
Belarus on hold
“Belarus has a track record of being of one of the very most dynamically developed ICT countries in Europe,” says Irina Kiptikova.
Revenue of the country’s IT industry in 2022 increased by more than 40 percent when compared with 2022 and amounted to 2.3 billion $ $ $ $.
“The concentrate on exports may be the hallmark from the Belarusian IT industry. Exports laptop or computer services per capita in Belarus is significantly greater than within the largest economies around the globe. In 2022, the export of computer services from Belarus amounted to 130,000 US dollars per 1,000 people. The primary destinations would be the US, Germany, along with other European countries,” Kiptikova says.
“A major component that drives the ICT development is labour resources. Belarusian ICT specialists have university education,” Kiptikova says.
“Another driver is really a well-developed infrastructure, including transport, telecommunications, office premises, and utilities. Based on the latest report published by the International Telecommunication Union in 2022, Belarus was ranked 32nd in the ICT Development Index.”
Recent events, however, have dealt the country’s ICT industry a blow.
“The 2022 [presidential] election campaign and the associated developments were built with a negative effect on the ICT sector of Belarus,” says Kiptikova. “The industry had experienced privileges over a any period of time, however these events eroded the boldness and sense of security of the industry's players. In addition, new customers became wary of outsourcing to Belarus-based companies within the fear of political instability.
“IT companies addressed the problem by setting up development centres within the neighbouring countries, primarily Poland and Lithuania. For instance, IBA Group expanded its office in Bulgaria and opened an improvement centre in Poland to be able to offer relocation options to its employees,” Kiptikova says.
“A sharp rise in the tax burden and threats related to government regulating business activities will also be major impediments to growth.
“Finally yet importantly, the overheated labour marketplace is a major concern for IT companies in Belarus. Using the growing global interest in IT resources and mobility of young developers, Belarus-based IT service providers face challenges in attracting new talent and retaining the very best people,” Kiptikova says.
“Robotic Process Automation, cloud, predictive analytics, and Internet of Things are among the technologies that will gain momentum,” Kiptikova says.
Georgia on minds too
“The ICT industry is driven by human capital as a key component for the manufacture of knowledge or ideas,” Georgian government spokesperson, Annie Vashakmadze, tells Emerging Europe.
“Georgia's Innovation and Technology Agency (GITA), with support from the World Bank, started a brand new programme that aims to increase the innovative activities of entities and individuals as well as their participation in the digital economy of Georgia,” Vashakmadze says.
A Georgian ICT labour market analysis conducted in 2022 demonstrated the ICT workforce is not sufficiently qualified to meet national and international market requirements.
“Therefore our GENIE project aims to enhance digital skills of Georgian professionals,” Vashakmadze says. The ICT training programme within the scope from the GENIE project started with an airplane pilot phase planning to train a minimum of 500 IT specialists, which now is going to be accompanied by larger-scale phase(s) to accommodate working out of at least 2,500 IT specialists. Overall, the entire the programme aims to coach 3,000 participants by March 2023.”
The main impediments of growth would be lack of skills and qualifications, Vashakmadze adds.