software development companies

Romania, the Next Growth Engine for Digitalization in Central and Eastern Europe

 

Software Development Companies in Romania – Statistics

 

We often notice with fast-growing economies that certain areas develop first, boosting the overall growth numbers. It comes as no surprise that the IT industry in Romania has become such a significant presence in the Central and Eastern European market. Fueled by financial incentives from the government, there has been a growing number of foreign investors flocking to the EU nation, drawn by the accessibility of the country, the education level of the potential employees, as well as labor-cost advantages.

The remarkable growth has attracted a lot of attention and led to several studies being conducted. A recent survey powered by Ipsos titled “The Digitalization of the Romanian Market” looks to determine how the sector is perceived and what the potential future benefits are. The results are in and we would like to share these with you.

 

“We are living in a digital revolution – and the software development industry leads it.”

The participants were comprised of 61% men and 39% women, the majority (60%) being above 35 years old. From this set of respondents, 55% were decision-makers, holding a position of greater authority and influence. Most of them with backgrounds in various service sectors, leading among them, the computer/software industry with 21%, followed by Internet/E-commerce at 10%, and advertising/public sectors and financial services at 8%. The majority of companies (46%) had a turnover of under €500.000

Unsurprisingly, 80% of the participants believe that we are living in a digital revolution. While 84% have a curious outlook to see where it is going, only a low 3% showed indifference. 3% expressed pessimism, while 74% are quite optimistic about the development of said digital revolution.

A significant part of the study looked into the development of technology and digital services in the public sector. Here are the participants: Romania, France, the UK, Norway, and Germany”. Romania ranked first in three out of seven categories – they were: social security, civil status, and the criminal justice system (74%, 73%, 70% respectively). The other country that managed to clinch first place in four out of seven categories was Norway, claiming the top in taxes, employment & unemployment, health, and education & higher education (87%, 58%, 62%, 78% respectively)

 

“Digital organizations, disruption, innovation – but health and education remain the main concerns.”

The following portion of the study looked at the top priority sectors needing to be improved among the five participants. The health sector seemed to be the most concerning among four out of five participants, including Romania, ranking it the top priority for development, followed by taxes and education (76%, 59%, 58%, respectively). For most of the participants, education together with employment/unemployment and the criminal justice system were the other top public sectors that required development.

The second half of the survey evaluated the effects digitalization had on the business sector. “Will digital revolution be disruptive in the next 3 years?” This was yet another question of the study that attempts to determine how much of an impact people believe the digital revolution will have in their specific industry. More than 55% of the respondents believed the digital revolution will disrupt their industry. The sample was predominantly comprised of decision makers with 62%.

 

A strong 44% of the participants responded positively when they were asked how close is their organization to becoming an “ideal digital organization,” while only 17% begged to differ.

In Romania, the respondents believed that the digital revolution in workplaces is being led by the IT, followed by Marketing , CEO’s office, R&D, IT & Security, and Digital Management/Digital Specialists. Globally, the order is somewhat different, in that it is the CEO’s Office that is leading, followed by IT, Marketing, Operations, Product Development, and Customer Service.

In our ever-changing economies, it is without a doubt that IT has played an imperative role in the digitalization transformation in Romania. This is further reinforced by the results of a recent study, which looked into the opinions of various companies on the digital transformation. A whopping 89% of the participants responded positively to understanding the importance of the digital transformation, with 68% believing it is a priority for top management. Even more, 56% of all respondents claimed to use digital technologies that are not provided or supported by their respective organization, just to perform their job. 41% of the respondents claimed that their respective organization is locating offices in new geographic areas, and scouting for digital talent in the meantime. In other words, 41% of companies are interested in outsourcing and offshoring.

 

To buy the digital solutions or develop them internally? Over 36% declared to have obtained digital solutions both internally and externally from the company, while 27% were clearly in favour of just buying their solutions from the outside.

A significant increase was noted in the results of a survey posed in 2018 that evaluated the technology that would impact the business model most in the next 1 to 3 years.  Automated Workflows noted the greatest increase to a total of 62%, an 18% jump from 2017). Also increasing from 2017 were Big Data & Cloud, albeit by a small percentage, still gathered a total of 56% votes, followed by BI & Predictive Analytics with 55%, and AI with 51% (a noteworthy 12% increase). A decrease in the expected impact on the business model was noted on  

The next question posed to the Compared to 2017, in 2018 62% believed that Automated Workflows would impact the business model in the next 1-3 years, an increase of 18%. Also increasing from 2017 in the forecast impact on the business model, albeit by smaller percentage, were Big Data and Cloud, BI & Predictive Analytics, AI (a noteworthy 12% increase), and Social Media Platforms. The Internet of Things (IoT) saw a 10% decrease in the expected impact on the business model, followed by Robotics & Machine Automation, and AR & Virtual Reality.

 

Tech and Digital Solutions for the Future

When asked how soon their respective company will develop new tech or digital solutions, 48% answered with sometime within the next 3 years, while 23% stated that their company is already developing new tech and digital solutions.

To the question, “How would you describe your company when it comes to the maturity of the digitalization process?”, Romania showed an overall dedication and engagement in the IT world with 16% answering their company was a digital leader, namely that digital transformation is ingrained in the business’ DNA. 21% claimed to have a mature digital plan, investments and innovations in place, and the majority with 30% said to be gradually embracing the digital revolution and actively planning for the future. Only 9% of the respondents described their companies as being digital laggards, not having a digital plan and having only limited initiatives and investments.

 

How will AI Impact Us at Work?

The final portion of the study analyzed the outlook on artificial intelligence. When it comes to the role of AI in reducing the gap between highly educated and uneducated people, the opinions are divided for the most part. 52% believe there will be no change, while 28% say the gap will be reduced, while, 20% claim the gap will actually increase.

In terms of the effects of AI on the workplace, Romania hovered around at the global average, which is 27% for the effects of AI on employee specific tasks. Other nations showed similar figures with France at 27%, UK at 21%, USA at 22%, and Canada at 23%, while China led the race with 52%. The global average on the impact on types of development was 26% with Romania not far off at 24%, Canada at 23%, followed by USA at 19%, and UK at 19%. On the other end of the spectrum we see China with 51%, Germany with 33% and Spain with 34%. Another question looked at was the effects on how the work is organized. Romania scored a 31% surpassing the global average at 24%, and trailing behind Germany at 34%, and China at 43%. The last impacted area was the hiring process and the types of employees hired. China led with 45% while Romania trailed with 27%, however, still above the global average at 22%.

 

A much more interesting view is given by the answers to the perceived AI dangers. Romania’s fear levels when it comes to technology and AI are far below the global averages. With only 42% claiming more surveillance would be a concern, the global average far surpassed this number with 76%. Only 31% were afraid of job losses, 38% of work dehumanization, and only 28% of ethical problems, compared to global averages of 68, 65, and 64%, respectively.

The same can be said about the perceived AI consequences and the associated feelings, where Romania’s “positive” emotions far outweighed the “negative” ones, in stark contrast to the world average. As follows, Romania’s scores on curiosity, optimist, and confidence were 78%, 57%, and 33%, respectively, exceeding the global averages, of only 60%, 35%, and 17%, respectively. The positive outlook on AI in Romania is further reinforced by the scores in the negative “emotion” areas regarding concern, and anxiety where the numbers were only 21% and 11%, respectively, below the global average numbers at 40% and 15%, respectively. The global average for rejection against the whole AI concept was 12% while Romania scored a remarkable 1%, concluding its positive attitude towards AI.

 

Want to know more about the IT environment in Romania? Drop us a line and we’d be happy to make your acquaintance.

 

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