Where Bulgaria and Romania stand in the 2016 A.T. Kearney Service Location Index?
February 4, 2016
By Boriana Dimitrova
Who are the top performers?
In the 2016 edition of the Index not much change has taken place in the top 10. First, second and third places continue to be occupied by the 2014 top performers: India, China and Malaysia and fifth, sixth and seventh places remain occupied by Indonesia, Thailand and the Philippines. According to the Index the Asia Pacific region shows strong performance on the financial attractiveness and the people’s skills and abilities factors resulting in its leading positions. Latin America and Eastern Europe regions have only five countries in the top 20. The reason behind according to A.T. Kearney being a decrease in the score for people’s skills and ability for Latin America and decrease in the score with regards to business environment for Eastern Europe.
Bulgaria is 2nd in Europe and 12th globally
Still 2nd in Europe, Bulgaria dropped three place down globally: from being the only European country in the top ten and number nine globally in 2014 to 12th position globally in 2016. But, let’s not be fast with the judgment. Bulgaria has already proven itself to be a strong and attractive outsourcing destination. In 2015 Bulgaria won “Offshoring Destination of the Year” at both the European Outsourcing Association Awards (EOA) and the UK’s National Outsourcing Association Awards (NOA). In the competition for the EOA award Bulgaria won against the shortlisted Latvia and South Africa, while for the NOA it outcompeted Slovakia, South Africa, and Sri Lanka. So, regardless of the drop from the top 10 Bulgaria holds strong positions as a preferred top outsourcing destination thanks to its highly skilled and multilingual talent pool and global outsourcing standards. The country will also be hosting the 2016 European Outsourcing Association Awards in the capital city of Sofia this October and celebrate the successes of organizations that have demonstrated the very best practice in pan-European outsourcing.
Romania is 3rd in Europe and 13th globally
On the other hand, Romania has risen with five positions up to number 13 globally. Even though with regards to business environment the country is still trying to catch up when it comes to ITO Romania is a flourishing technology hub. Romania is 1st in Europe and 6th in the world, in terms of number of certified IT specialists with a pool of about 100,000 people in various IT-oriented profiles. As per data from the Association of the Software and Services Industry in Romania, the country currently has around 50 offshore centers owned by large international IT vendors. More than half of these are BPO centers, 30% are IT services-related centers, and less than 20% are R&D facilities. As per data from the Romanian Ministry of IT and Communications over 60,000 people currently work in the outsourcing sector in Romania. Also, according to the Index the labor costs in Romania are lower than in Poland, which ranks number one in Europe in the 2016 Index.
With an annual growth rate of the outsourcing sector between 15 and 20% for Bulgaria and Romania being the fastest growing market in the European Union in terms of IT outsourcing services it is expected that in the years to come the two countries will be holding leading positions in Europe and climb up in the global rankings.
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