Romania’s culture of self-sufficiency and homegrown technical talent, have helped them ENTER the tech start-up world.
Romania has developed a legacy of excellence in science, medicine, mathematics, and technical education. During the past two decades, the intellectual talent of people in the IT field has caught the interest of large international corporations such as Microsoft, Amazon, IBM, Intel, Adobe and Oracle. Romania has for these corporations become an epicentre of outsourcing, research and software development.
According to Forbes, Romania has more IT engineers per capita than USA, Russia, India or China. Brainspotting reports that Romania ranks top 10 globally with 95 000 IT specialists. Romania’s Association of Software and IT Services predicts the number of IT specialists will triple by 2020. With numbers growing every year, Romania remains an attractive market for international companies to find young talent in the IT sector at relatively low costs compared to Western Europe. Thus, Romania has turned into a digital centre for South-Eastern Europe with a highly competitive and fast-growing IT market.
Romania is currently experiencing a growing wave of its own entrepreneurial culture. There is a myriad of reasons why people choose to take the leap and adventure into the entrepreneurial world. The wealth of intellectual talent capital with top tech-developers being the life-blood of any tech start-up, and low operating costs cheaper than in Western Europe.
The relatively small size of the country with approximately 20M inhabitants makes it a good place to test any product or service. The main tech start-up hubs are in Bucharest – Romania´s capital, Cluj and Brasov in Transylvania where most of the tech-life is centred.
The flourishing start-up community is experiencing their own struggles. High levels of bureaucracy, a lack of legislative support for start-ups, and a lack of business analysts with appropriate knowledge to guide start-ups into the market represent just a few downsides.
Barriers to business growth including a lack of start-up funding, bank lending or equity investment, and a relatively small consumer domestic market, further hurdles of the entrepreneurial world in Romania. And the business angel community is less developed and lacks transparency.
In places like Silicon Valley, Berlin, London or Stockholm, it is easier to have access to already established start-up ecosystems and people have a better chance to find investors and partners. This is often not the case in Romania.
Romanian start-ups still rely on either state subsidies, grants or international investment. This may all change soon as the European Investment Fund and Romania´s ministry for European Funds have signed a contract of $40M that will target entrepreneurship accelerators and funds for innovative companies.
Financial or legislative obstacles have not stopped young entrepreneurs from developing their ideas. The Online Database Romanian Start-ups reports that in 2016, 300 homegrown tech start-ups and seven accelerators and incubators have been registered with numbers expecting to grow the following years. These are modest numbers in comparison to other European entrepreneurial centres, and the Romanian tech start-up scene is nascent, but constantly growing.
Are the schools evolving?
Different projects in the country have started implementing an entrepreneurial spirit among young people with a focus on improving the risk-taking culture. Entrepreneurship classes are now common in high schools. The city of Cluj – Romania´s second prominent city in the tech field, often referred to as “the Silicon Valley of Transylvania” or the “City of Innovation” is aimed to become the second centre for tech entrepreneurship after Bucharest. Local authorities, universities and the community business have been cooperating in order to encourage the development of the tech field.
Romania is currently facing a shift in the tech start-up scene. IT specialists can choose between outsourcing for foreign corporations or invest their high intellectual potential into the growth of the national economic wealth.
Until a few years ago, a comfortable salary in a field that guarantees financial security was seen as the right choice. The trend has now started to switch, people are becoming more and more aware of their own potential. And decide to take the leap into the rewarding and challenging world of entrepreneurship.
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