Romania — a top favored software outsourcing destination-Part 1

LiftUp Solutions
Feb 26 · 4 min read

By Amalia Badescu, 26th Febryary, 2021

Making a career switch in 2020 towards the IT field has been a rewarding experience, offering me the possibility to build my adaptability skills and gather a deeper understanding of the Romanian IT market. If employees were once measured by their IQ (Intelligence quotient), then their EQ (Emotional Quotient), now it’s all about the AQ (Adaptability quotient).

Source: Canva

There is a constant interest in creating new services in today’s age and improving existing ones to reduce associated costs and obtain a competitive advantage. According to the Financial Times, Romania — one of Europe’s fastest-growing economies, has become a popular tech destination,

making Romania one of the top 20 software development countries in the world. It’s estimated that by 2022 the market volume of IT will reach EUR 7.3 billion, meaning a 25% yearly growth rate.

Quartz adds that it could very well be EU’s next tech-startup hub, while TechCrunch called it the Silicon Valley of Transylvania. Surprised? You shouldn’t be. There is every reason to believe Romania will continue on its path of growth.

IT companies contribute 6% to the country’s GDP today, but this figure is projected to grow to 10% in the coming years and reach 12% by 2025.

We have discovered a remarkable advantage through our research. By working closely with the Human Resources department, it has become more apparent that Romania has highly skilled professional talent at competitive rates compared to other EU countries.

Source: Canva

In a global context, IT and research-development innovation are critical factors for sustainable development. Moreover, accelerated digitalization has led to not just governments but also companies making significant changes. Governments’ main targets are economic growth, foreign investment attraction, and applicable fiscal policies for the research and development industry. Accordingly, Romania has introduced attractive fiscal measures and tax incentives relating to the IT industry.

Tax legislation has provided salary income tax exemption for employees who render IT activities linked to computer software creation. Even local administrations have started their programs. For instance, beginning November 2020, Oradea (a city in the N-W of Romania) formed a start-up incubator program led by local IT companies, local government, and national partners, aiming to boost, develop and promote local IT&C talent and creative companies.

The Romanian IT industry represents one of the most prosperous economic sectors in the country, registering at the end of 2019 nearly 6 billion euros in revenues. This is approximately 6% of the country’s GDP.
The top 50 largest technology companies in Romania, which realize software and digital solutions for group companies or for third parties, have increased in the last ten years by approximately four times the turnover and teams in Romania, reaching a cumulative turnover of 3 billion euros and over 50,000 employees in 2019, according to Cushman & Wakefield Echinox analysis.

The 5% annual increase in local investments makes Romania not only a regional tech hub for nearshore outsourcing but also for successful IT startups.

Source: Canva

On a global scale, the Romanian IT market remains exceptionally competitive regarding salary costs. Bucharest remains the market leader, contributing 63% of the total IT market revenues, followed by the North-West region with 18%.

Regarding the evolution of the IT market in the last decade, according to the INS (National Statistics Institution), in 2019, we had 178,000 employees registered in the IT &C field in Romania.

Also, the percentage evolution of the total IT market revenues, the NET profit, and the number of employees of Romania’s top technology companies, for the 2010–2020 timeframe, has registered a 9.1% growth (according to the National Institute of Statistics). In the context of the Covid-19 pandemic that pushed companies to accelerate digitalization and automation, Romania is in a position to become an important provider of technology solutions that will contribute to information systems efficiency.

Specialists believe that the Romanian IT market will be going through a booming period starting from 2021. According to a study published by the Romanian Employers Association in the Software Industry (ANIS), the Romanian IT market is expected to reach a volume of EUR 7.3 billion by 2022.

In today’s digitally transformed world, where software and mobile development are imperative to the growth and success of a business, developers have become an asset to businesses and the new development talent hunting is getting fierce. One of the main strong points for Romania remains its qualified and innovative employees besides the low cost of labor that place Romania as a top favored software outsourcing destination.


Stay tuned for another post that will tackle these topics.

Digital Nourishment

Digital news -IT especially, facts, stories and food for thought

Digital Nourishment

Digital news -IT especially, facts, stories and food for thought from the passionate people at LiftUp Solutions, delivering custom-made online solutions for companies that want to grow and have success in the digital era since 2016.

LiftUp Solutions

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LiftUp is an IT consulting company that delivers custom-made online solutions for companies that want to grow and have success in the digital era.

Digital Nourishment

Digital news -IT especially, facts, stories and food for thought from the passionate people at LiftUp Solutions, delivering custom-made online solutions for companies that want to grow and have success in the digital era since 2016.