Community, Global Trends

Why Outsource to Serbia?

Highly skilled workforce, shorter journeys, smaller time-zone differences, European language skills and western culture

Serbia has more than 70 of world’s total estimated Blockchain developers (70+ of 5000 devs). Currently, Serbia is actively working on legislation, regulation, education, and policies to make it easier to build a Blockchain related company within the country. The main idea is that the ratio stays close to the present one, even when there are a million Blockchain developers in the world. Thus formed Serbia as a fully competitive outsourcing destination not just in the region, but wider.

Serbia As A Outsourcing Destination

The Republic of Serbia is highly desirable for IT outsourcing, especially in the field of Software Development. This is not surprising because Software Development is the most successful branch of Serbian industry. Experienced, certified and dedicated IT professionals acquired both regional and international experts working in the companies located in Serbia. This large pool of talents possesses the best quality and expertise, technical skill-sets and ability to improve quickly – plus:  lower man-hour costs with no hidden surprises.

As one of the most attractive outsourcing destinations in Eastern Europe, Serbia’s outsourcing industry reached over $450 000 000 USD, last year. A total number of graduates in the technical areas is 7,473, which is 16% of all graduate students in 2012 (47,797). In 2012, 4,251 ICT experts have graduated, thereof 2,338 at the first level degree (B.Sc), 1,834 at the second level (M.Sc), and 79 at the third level degree (Ph.D.). There are more than 1,500 graduated IT specialists each year on many Universities across the country with another 1000 entering the workforce each year before they finish college. The Serbian IT market value will most probably stay captured in between € 400 – € 450 million  (2009-2013).

Increased need for offshore outsourcing has led to rising of the countries of Eastern Europe as an alternative to traditional offshore destinations. Highly skilled workforce, shorter journeys, smaller time-zone differences, European language skills and western culture all contribute to this attraction. Many executives from the US and Western Europe have expanded to Eastern Europe, so now they are using resources from this countries for their system development.

Serbian Marketplace

On the global market, IT companies from Serbia (SME and big ones alike) are involved in different outsourcing roles: programming, testing software and designing websites, embedded industry, application design, and programming, etc. Most of the big IT companies established their development centers in Serbia or outsourced services to local IT companies. The divide between companies in Serbia which do outsourcing as a core (primarily software development) or specialized outsourcers and those that work on outsourcing contracts occasionally.  Key global players such as Adobe, Oracle, Google, HP, SAP, IBM, Siemens, Intel, Cisco, NCR Corporation, Telenor, Erickson, Endava, Vast, Execom, and others have already outsourced services to local IT companies.

Why Outsource to Serbia?

  • Salaries: After the entrance of their neighbors (Romania and Bulgaria) into the European Union, Serbia became one of few countries in the region that is not a member of EU. With some disadvantages, average monthly salary in Serbia is lower than in EU countries which is not insignificant. More powerful countries are using that. They are moving their operations to Serbia;
  • No-visasdirect link to the major markets (Russia, China, Israel, EU);
  • Reduce expenditure without compromising on the quality of service. Serbia offers a straightforward solution for cost-effective company expenses optimization;
  • Freelancers! The specific significance of the free-lance market has to be further explored as, on the one hand, this group involves an unknown number of readily available skills and expertise;
  • PLUS: Cultural affinities, first-class language skills, strong IT, transport infrastructure and Serbia’s vicinity to other European capitals are key drivers to outsource to Serbia.

According to U.S.-British consultancy PMR Consulting, Serbia’s “relatively low employment costs, strong links with Western economies and increasing number of university graduates” make it a worthwhile market to invest in

Key Advantages

Education – Total number of graduates in the technical areas is more than 7000, and 4,851 more graduates come from natural sciences and mathematics.All these graduates are significant for IT sector. Serbian students undertake a broad range of studies and display enviable depth of knowledge and good logic – factors which are crucial in providing successful outsourcing services.

R&D – Serbia is a moderate innovator. Serbian R&D relative performance to the EU average has significantly increased from 45% in 2008 to 62% in 2015. In Serbia, there are 14,643 scientists involved in research and development that is carried out at 60 registered scientific and research institutes and 101 faculties. Beside institutes, R&D Centres are commonly used infrastructure for R&D and innovation. 

Price of labor – According to European Freelance market research 68% of companies and individuals in the Balkans charge less, than $20/hour for IT services, the highest percentage in Europe. However, there is a formidable gap in pricing structures between Greece, Croatia, Slovenia, Albania, Bosnia, and Macedonia. The former is closer to Eastern Europe and the Baltics in terms of pricing rates, while the latter are the cheapest countries in Europe for software development, along with Armenia and Moldova.

Proximity and Transport – Regular direct flights from most major European centers allow clients to visit our Belgrade headquarters with ease. Belgrade is within two and a half hours from most major European cities (London 2h 30 mins, Berlin 1h 45 mins, Amsterdam 2h 45 mins, Copenhagen 2h 15 mins). Smaller, but fully functional airport is located at Niš, southern Serbian city with a strong IT community and devs.

Cultural affinity – The people of Serbia have a strong understanding of western culture, both on a personal and business level, thus making written and verbal communication a much more enjoyable experience.

Mathematical proficiency – Serbia prides itself on a strong mathematical and logical background which permeates the culture and is reflected in the education system. International Mathematical Olympiad – Serbia – Performance at the IMO First participation: 2006: 10. Gold medals: 9. Silver medals: 18. Bronze medals: 20. Honorable mentions: 10. 

Communication – English language is mandatory through the Serbian schooling system for at least eight years, and English language media is widespread in Serbian society. TV shows are not dubbed but shown in their original language (with titles); youth start learning English even in the kindergarten.

Interestingly enough, Serbia with a population of only about 7 million people, takes the 5th place in Europe for the number of freelancers engaged in IT, with 3,282 companies and individuals registered on Elance. This is the largest proportion of IT specialists per capita on the continent.

Other Attributes

Serbia is growing to be among the premier investment locations in Central and Eastern Europe. The main political parties, in power as well as the opposition, agree on foreign policies promising political stability. Lucky for us (after so many years of negotiations and analytical work), Serbian Government understood, clearly,  that Serbia cannot grow its GDP by selling more man-hours at a relatively cheap price and needs to move to its own IP and providing more high tech services.

Belgrade, the capital, has been awarded the City of the Future for Southern Europe in 2007 by FDI Magazine. The criteria: economic potential, cost effectiveness, human resources, IT and telecommunications, transport, quality of life and FDI promotion. In 2011 foreign direct investments totaled USD 2.71bn, making Serbia the best performer in Southeast Europe.

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