Top Software Development Destinations in Eastern Europe

10 minutes

The rapid spread of pandemics has made organizations of all sizes rethink their business strategies to ensure financial security in a newly-coined reality. From the shortage of qualified professionals, the world has shifted to the millions of job losses just within a few months. The only industry that remained suffering from scarcity of talent was IT. Countries all over the world have become unable to fill tech vacancies: only 18% of countries didn’t report tech shortages in 2020. And that’s definitely not the end. According to the Bureau of Labor Statistics, the shortage of tech engineers is going to exceed 1,2 million by 2026 in the US solely. Therefore, companies were forced not just to streamline their operations but to prepare for the next disaster.

Global tech giants and evolving startups have changed the way they were managing their businesses. They’ve started looking from a different, more cost-effective, and less time-consuming perspective, they started outsourcing more. According to the GSA report, 70% of companies are planning to outsource more in the near future.

Eastern Europe has become one of the most popular outsourcing destinations because of the availability of a vast talent pool, a big number of CS university graduates, geographical location, and high level of technology adoption. A range of countries represent this IT region, being home to top software development companies in Europe that develop tech solutions for such behemoths as Microsoft, Google, Skype, Audi, Siemens, and many more.

Software Development Eastern Europe

Ukraine

The education level can tell a lot about the quality of services offered by the country. With a literacy rate of 99,8%, as to UNESCO 2020 statistics, 1,6 million Ukrainian students are currently gaining higher education in more than 660 universities. Due to the stable growth of the Ukrainian IT market (PwC analysis has shown that it has recently increased by 2,5 times), Ukrainian universities are actively investing in engineering faculties and STEM programs. Such initiatives raise the awareness and willingness of the youth to become a part of the $1,256 billion industry value.

According to StackOverflow estimations, there are more than 184k software developers in Ukraine which comprises 35% of the total Eastern Europe software development market. This big talent pool attracts professionals from all over the world to share their experience on annual IT events held in Ukraine like IT Arena, iForum, Agile Eastern Europe Conference, etc. According to HackerRank, software development in Ukraine is also in the top place in respect of security.

Having developed IT solutions for more than 100 companies from Fortune 500 list, without exaggeration, Ukraine can be called the “Silicon Valley” of Eastern Europe software outsourcing.

Poland

Though the IT industry in Poland is still relatively a new sector, it’s been actively developed and invested in. The industry constitutes approximately 8% of the country’s GDP. Every year the number of Polish software engineers increases by almost 6% which is dictated by high industry’s popularity and availability of level-up education. There are 18 technical universities in Poland with over 75k students. Such a big amount of graduates guarantees a flawless staff placement in the industry. What is more, Poland is considered to have professionals with a high EF EPI index, taking the 14th position in Europe. Polish tech talent pool has around 280k developers which equals the population of some small European countries. Though only 20% of those work for tech vendors that supply international companies with software outsourcing services. The topmost widespread technologies among Polish engineers are JavaScript, Java, and Python. The average rate of Polish developers is approximately 30% lower than the US devs though still higher than Ukrainians’. For instance, the junior developer in Ukraine charges around $26 per hour while a Polish one near $40 per hour.

Last but not the least, Poland locates around 50k software development companies in Europe, more than 800 of which offer custom software development.

Hungary

When you search for top software development outsourcing destinations, Hungary often appears on the list of recommended countries. The quality of tech experts is one of the key factors you have to consider when outsourcing to a different country. According to Eurostat, there are circa 3k IT students graduating from Hungarian high schools annually and those numbers are expected to grow. There are around 70 institutions that offer Computing and IT programs in Hungary, six of which could be found in the QS World University Rankings. Taking the above into account it can be assumed that there is a reliable education system that produces a significant number of future developers each year. According to the Hungarian Tourism Agency industry overview, the Information and Communication sector was responsible for 5% of GDP and 8.2% of total export in 2017, employing approximately 120k specialists, 80k of which are professional developers. Bearing in mind that the total population of this country equals only 9.5 million, this proves that the IT sector plays a valuable role in the Hungarian economy. The Hungarian market of IT services demonstrates strong and steady growth, averaging 6.4% annually starting from 2010.

Czech Republic

The Czech Republic is also an important player in the Eastern Europe IT arena. Within the last decade the IT sector in the country has significantly developed and every year the Chezh Republic is experiencing an increase by 10% in software outsourcing. The overall IT services export value constitutes approximately $1.8 billion making the industry a university graduates’ heart’s desire. Talking about the latter, around 4k tech students enter the IT market annually. A big advantage of higher education in the Czech Republic is very effective communication between universities and business structures. They continuously update the curriculum and provide their students with the practice that is relevant to the IT market. According to Deloitte, the Czech Republic is a country with a very low economic risk and positive business climate which makes it a popular choice for foreign investments. such giants as Google, Microsoft, and IBM made the country their R&D destination. The three most popular technologies among developers include Java, JavaScript, and PHP. Hiring Czech developers is also much less expensive compared to the US or Western Europe, though still more costly than in Ukraine or Belarus, for example. Currently, there are more than 95k professionals operating in the ICT sector in the Chezh Republic.

Belarus

Belarusian IT sector can also be considered as one of the fastest-growing in Eastern Europe. Each year it increases by 10% with an export value of $3 billion. Such dramatic growth has been dictated by the country’s system of STEM education. Though tech education is provided only by state universities in Belarus, IT companies managed to cooperate with higher education institutions to arrange special courses and disciplines to meet the needs of the contemporary IT market. Thanks to this approach, 4k university graduates enter the IT industry every year. Another big driver for the industry’s growth is the existence of High-Tech Park (HTP). This is a special regime that was introduced in 2006. The resident companies of HTP are exempted from paying most taxes whereas their employees have a 30% reduction in personal income tax. Currently, approximately 56k IT professionals work for Belarusian 250 IT companies.

A Final Note

IT outsourcing remains one of the most dynamically evolving sectors of Eastern European economics, regardless of the impact of the pandemic. One of the most powerful players in the region is undoubtedly Ukraine. The country represents a strong technical background, a vast talent pool, and favorable prices for offshore partners.

inVerita is a Ukraine-based company that provides software solutions for companies of any scale: from startups to Fortune 500 clients. The company specializes in building web and mobile solutions, IoT software development, quality assessment, and testing, cloud, and DevOps services and has its own separate product design division - QU’ARTE. In 5 years of successful work, the company has built a strong reputation in the global arena and has been included in the most recent rating of the best b2b companies presented by Clutch, in which only 1% of the companies presented in the catalog were included.

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