CEBIT – No EU brain drain for Romanian IT

March 19th, 2007

resized_shutterstock_856936.jpgThere has been no ‘brain drain’ of skilled IT staff from Romania since the country joined the European Union and opened its borders on Jan. 1 — and Romanians are even returning to their home country to work, according to government officials.

There was an exodus of skilled IT workers in the 1990s, as Romanians left the country for better salaries working elsewhere, said Bálint Porcsalmi, State Secretary for Communications and Information Technology.

Now, however, Romanian IT workers are coming back home, he said, speaking at a news conference on the fringes of the Cebit trade show in Hanover, Germany. The rising salaries that are attracting them will change Romania’s role as a center for low-cost outsourcing for its European neighbors, he said, perhaps forcing the country to develop original products of its own.

With its neighbor Bulgaria, Romania joined the E.U. on Jan. 1, removing many of the restrictions on Romanians working in other member states. Some had feared that Romanian software engineers would leave the country in search of higher salaries elsewhere, leading to shortages of skilled workers, but Anca Crahmaliuc, chief marketing manager for software company Siveco Romania SA, said her company has seen no such problems.

“Last year we had 450 people and this year we have 600,” she said, adding that she expects staff numbers to continue to grow at the same pace this year.

That pace of recruitment comes at a price: Siveco now pays its project managers around €3,000 (US$3,972) a month, she said, as much as they would earn in many other EU countries.

In addition to the rising salaries, another bonus for programmers in Romania is that there is no income tax. Software engineers are exempt from the country’s flat income tax rate of 16 %, Porcsalmi said.

For Costin Lianu, director of the export promotion division of the Ministry of Economy and Commerce, “If Romanians can receive the same salary, they would prefer to work in Romania for cultural reasons.”

Returning Romanians are bringing with them important entrepreneurial skills, Lianu said.

“They have learned how to manage a company, to be market-oriented,” he said. “Many are coming back to reinvest in Romania.”

The Romanian software and IT sector generates revenue of €400 million a year, he said, and the country has more than 3,000 technology companies. About 30 of them are exhibiting at the Romanian stand at Cebit, while others, such as Softwin SRL, the developer of the BitDefender antivirus software, have their own stands.

Softwin is one of those companies helping the Romanian IT sector move away from a reliance on outsourcing through the development of original products. Although BitDefender is now sold worldwide with versions in 18 different languages, “all of our research and product development is still centralized with our team in Romania,” said Ginger Yerovsek, global sales director for BitDefender.
By Peter Sayer, IDG News Service

Source: NetworkWorld

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