Why Eastern Europe

Due to the constant growth and advancement of its IT industry and a high degree of digital technology adoption, Eastern Europe represents one of the most dynamic software development destinations.

One of the most strategically crucial decisions an organization can take is to select an efficient method of accessing talent. Any company can unlock a whole universe of innovative technologies and digital opportunities if they find the right way. When thinking in this direction, companies, as the most commonly used collaboration methods, consider both the pros and cons of outsourcing, insourcing, offshore, business process outsourcing (BPO), inshore, nearshore and similar strategies.

Outsourcing has the power to upgrade a company’s business objectives, improve its value proposition, extend its resource base, and reduce risks. From designing an app to systems management, choosing an external team as a tech partner means choosing professionals to focus on what they do best. For companies looking to outsource the IT part of their company, Eastern Europe has become one of the most attractive destinations.

The rapid growth of business digitalization created a lot of opportunities in all industries around the world. As a leader, the USA was creating standards on how and what companies need to do to build an outstanding digital solution/product/service. However, the need for software engineers has been growing ever since, pushing all companies to seek devs in other countries too.

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Why Eastern Europe

Once considered as a part of the world that only few developers come from, EE has become a mandatory destination where companies go to seek a solution to their digital problems. Many organizations from these countries have decided to become fully-oriented to working for clients, or, in other words, outsourcing.

The strong educational system, as a legacy from the communistic period, is now giving great results. In the majority of the countries in this region, schools teach children logical thinking, mathematics, different languages, and in the past few decades, computer science has been mandatory for all ages.

Eastern Europe has been producing a lot of famous engineers, scientists, and mathematicians in the past and now. You can always see students from EE countries in the top 10 on a world scale in competitions such as IT, math, or science. And we have great examples in the team. Two of our co-founders, Stefan Trajkovski and Ilija Lalkovski were part of these events, they represented Macedonia as part of the five best Macedonian programmers on the Balkan and International Olympiad of Informatics.

The IT leaders are Poland and Ukraine, as countries closest to the EU, providing a large talent pool. Poland became an important engine for Europe and a role model of how an economy that was completely collapsed can rise again. With over 500 IT companies offering software outsourcing services, Poland has Warsaw, Krakow, and many more as IT hubs. Ukraine, on the other hand, has 1,600 companies providing IT services, with Kyiv and Lviv being the biggest IT destinations.

All other countries followed this example. At the moment, all Eastern Europe countries are competing to provide more benefits to IT and attract more investors, talents, and companies.

Competition is dynamic because everyone is investing a lot in infrastructure, education, taxes, improvements in any aspect of people's life and work style. All these companies have specific skill sets, organizational, and working culture. Thanks to their expert-level talent pool, fast technological progress, and good price-quality balance, they have made EE an attractive region for IT outsourcing. 

Things that are common for all EE countries include:

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Timezone

In a perfect place between the east and the west. It can cover 3-6 working hours in the US (depending on US time zones and 3-5 working hours in Asian time zones. Same zone as the EU.

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Well-trained and educated youth

Children are introduced to IT at an early age, when they are 6-7 years old. Programming is mandatory after they turn 10.

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English is mandatory 

They also have to choose one more foreign language, with German, French, and Italian being the most common ones.

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IT growth

The IT industry yearly growth is about 10%, depending on the country.

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Large IT ecosystems

There are large IT ecosystems, and a strong connection between the academics and businesses.

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Tech partnership

Most companies cover all IT-related services, so you only need to find one tech partner

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Wide talent pool

Big names like IBM, nVidia, SAP, Microsoft, Facebook, Google have large offices in this part of Europe, and everyone is aware of what they are looking for - great talents

Instead of looking at outsourcing as a way of cutting costs, outsourcing to Eastern Europe represents an opportunity for accelerated digital transformation and business empowerment.

Due to the constant growth and advancement of its IT industry and a high degree of digital technology adoption, Eastern Europe represents one of the most dynamic software development destinations.

IT has already been established as a strong branch in countries such as Ukraine, Poland, Hungary, Belarus, and Romania. However, the rest of the EE countries also hide great, undiscovered potential. 

Why Macedonia

Macedonia is a part of South-Eastern Europe and has been the most recent rising star in the IT sector. With ICT as a fastest-growing segment, software services take above 45% from all ICT services in the country.

The country is positioned in the center of the Balkan Peninsula between Serbia, Bulgaria, Greece, Albania and Kosovo. Macedonia has a population of less than 2 million and almost a quarter of the whole population lives in the capital city Skopje, which is the largest business center in the country. 

There are 15 active fixed operators, 4 mobile operators, and 90 internet providers, with the country having one of the fastest internet connections in the world. During January 2021, Macedonia was ranked 33rd for mobile speeds and 101st for fixed broadband speeds worldwide (Source: Speedtest Global Index). It also has the best telecommunication networks in the region and the system is 100% digital. These factors enabled Macedonia's IT market to increase significantly, as the fastest growing in the South Eastern Europe region. 

Macedonia is a member of the most important international and regional organisations: International Monetary Fund, Central European Initiative, Council of Europe, Organization for Security and Co-operation in Europe (OSCE), Southeast European Cooperative Initiative (SECI), World Trade Organization (WTO), Central European Free Trade Agreement (CEFTA). In 2020, the country has also become the 30th member state of NATO. 

Ranked on the 82nd place on the Human Development Index, the country provides a social security, universal health care system, and free primary and secondary education to its citizens. Macedonia became a member state of the United Nations in 1993. The major interest and long-term focus of the country is the full integration in the European Union and the Trans-Atlantic integration processes. One of the top five policy priorities is also strengthening economic and public diplomacy. 

Many big players already invest in ICT due to the positive government measures taken in the last decade. Microsoft, Cisco, Oracle, Dell, Compaq, Hewlett Packard, IBM, Apple, and Lotus, are only some of the large ICT players present in Macedonia via branch offices, distributors, dealers, resellers, solution providers, and business partners. 

Macedonia is in the top 3% countries where you want to do business, based on DoingBusiness statistics. Moreover, it’s in the top 5 countries with the lowest taxes in Europe, which gives companies the opportunity to invest more in innovation, people skills, and technologies. The World Bank ranked Macedonia on the 10th place in the Ease of doing business report in 2019. 

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Education

The country has a well-developed and modern educational system. There are more than 80 high schools around the country with an intensive focus on languages, mathematics, and science as well as 22 universities.

The growth of IT investments is also due to the big improvements in the educational programs:

IT education is mandatory for elementary school

Every child has a computer at school

Paperless education, all information is available online

Joint faculties for better competitiveness

Many new in hubs, startups, and IT infrastructure

85%+ of the population has access to the internet

The higher levels of education can be obtained at one of the five state universities or at one of the private universities. The biggest university is the University of Saint Cyril and Methodius located in the capital city of Skopje. As a part of this university is the Faculty of Computer Science and Engineering which is the biggest in the country, producing 2500+ ICT graduates per year, which accounts for 30%+ of all country graduates. 

There are also an additional 2000+ ICT graduates per year from other universities around the country, including the University for Information Science and Technology St. Paul the Apostle in Ohrid, which is 100% ICT-oriented. Above 60% of the people working in ICT are graduates with BcS and over 25% are still working on their studies to become BsC.

Moreover, private informal IT education has become a big trend in the country. In the last few years, many of the tech hubs, incubators and accelerators are also offering informal education. Macedonia has over 30 educational centers offering education programs for all IT branches, including QA, mobile app development, front-end development, backend development, UX/UI design, project management and many others. A large number of them organize IT academies, mentored by highly skilled and experienced individuals, that last for 6-12 months, preparing IT professionals to get hired by companies through dynamic work on real-world projects. 

Business and IT Landscape

The timezone is GMT+1 (CEST). The official alphabet is Cyrillic but 100% of the population knows the Latin alphabet as well. English is spoken all around, especially among the younger population, because of the educational system and everyday needs. The share of the population aged 25-34 who speaks at least one foreign language in Macedonia is 40.0%, slightly higher than the EU average of 38.7%.

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There is a large number of great talents, and 70%+ of the employees in the IT industry are between 25-29 years old.

The majority of developers or about 50% are full stack engineers, about 20% are backend engineers, and the rest are in the other various IT positions. Intermediate and Seniors are making more than 60% of the people involved in IT.

In Macedonia there are more than 75 000 registered and active companies. The main business center and most developed city is the capital, Skopje.Bitola, Prilep, Ohrid, Kumanovo and Tetovo are also important cities for the Macedonian business community where you can find many big companies, privately owned or direct foreign investments.

What makes the country attractive for investment is the flat tax system. Ranked as the fourth ‘best reformatory state’ by the World Bank, Macedonia has undergone considerable economic reform since independence. The country has developed an open economy with trade accounting for more than 90% of GDP in recent years. Macedonia experiences one of Europe's biggest growth rates at an average of 4% making it comparable to nations such as Romania and Poland.Macedonia experiences one of Europe's biggest growth rates at an average of 4% making it comparable to nations such as Romania and Poland.

The IT industry in Macedonia is the fastest growing branch. According to a World Bank report, Macedonia is presented and recognized as an IT leader in the region, in several aspects, such as the business factors and climate, the conditions and positive setup for doing business especially in the IT field, and regarding the production of highly skilled and educated tech talents, Macedonia is used as an example by other countries.

Currently, there are 1,957 economically active companies in the ICT Industry which is employing more than 4% of the total employed population. It is expected that in the next several years this number will grow up to 6%. The companies within the ICT Industry are divided in 5 subsegments or Software and IT Services, Telecommunication, ICT Manufacturing, ICT Trade and Other IT Services. The main IT subsegment is ‘Software and IT Services’ which is outperforming almost every industry. According to the historical data and its current performance, there is high probability that the ICT Industry will be one of the leading industries in the Macedonian economy in near future.

The ICT contribution to the GDP is above 2.5% as of 2018, expected to be 5%+ by 2022, with  the majority going to software services. Because of this trend, the government is investing a lot into making the infrastructure and environment more friendly for investors, accelerators, innovation hubs, private non-formal education centers, and co-working spaces, allowing them to access information, grants, and free (with limitation) facilities.