Serbia: Europe’s Next Tech Talent Hotspot

People Make the Difference

Serbia’s rise as a key outsourcing nation has been on the cards for a long time. Cost-effective, talented and driven – there’s a clear trend in the quality of tech teams hailing from Serbia that undergo the tech due diligence process of the Digital Knights

Serbia: Europe’s Next Tech Talent Hotspot

How could it be that Serbia has earned its reputation as a breeding ground for talented engineers? The answer lies in its history of eschewing ideological education in favour of subjects that deal exclusively with logic and reason. Who knew a strong tradition of science and mathematics could prep a generation for careers in IT? In Serbia, engineering graduates account for nearly 33 per cent of all university leavers from technical schools, while IT is taught at 35 higher education institutions.

Software development companies are well aware of this wealth of Serbian tech talent and have accordingly established academies to attract the brightest post-grads. Promising students are invited to develop their skills and vie for placements at the companies running the academies.

It’s worth noting that it’s not just students who are invited to participate – budding developers learning outside formal education that want to try something new are also a mainstay at these academies.

Beyond the academy model, Serbian universities also collaborate with software development teams on long-term projects. Med-Tech insights from developers have aided university medical labs in implanting medical electronics and controlling software – including a deep brain-stimulating device that treats and works towards curing acute neuropsychological illness. Academia and the IT sector are intertwined, and working together to great effect.

When it comes to the working culture in Serbia, employees are given great incentives to remain with their respective companies, while 80 per cent of teams operate on a profit-sharing model, and most – if not all – are strictly flat hierarchies.

A lot of development studios have their own spin-offs and businesses within businesses. By developing internal projects, either to make their job easier – such as project tracking optimisation – or to solve problems in the local community – such as a lunch delivery service on a SaaS model – have gone on to become fully-fledged products and services.

The teams are also active in their community, using their considerable tech talent to solve problems in the areas where they live. The rest of Europe, and beyond, should be taking note.

What this means for Serbia’s IT industry is that they are able to build strong relationships with clients in Amsterdam, Tel Aviv, Dubai, and other tech hubs in both the DACH and the Middle East.

Serbia’s historical significance at the centre of the former Ottoman and Austro-Hungarian empires gives it the intercultural aptitude it enjoys and fully utilises today. Despite the distance, Serbian Technical Partners begin any long-term collaboration with a face-to-face meeting, laying the foundation for an enduring relationship.

Serbia also has a close relationship with the Netherlands. According to some teams, this relationship can be attributed to the establishment of a development centre in Serbia by Levi9 – a Dutch multinational IT provider – in order to gain access to Serbia’s engineers. It’s not just by virtue of Serbia’s geography that developers are forging connections all over Europe, but rather also because of reputation.

Serbia’s talent offerings are considerable, and the teams all say the same thing: give them the biggest, toughest problems that they have.

When it comes to the working culture in Serbia, employees are given great incentives to remain with their respective companies, while 80 per cent of teams operate on a profitsharing model, and most – if not all – are strictly flat hierarchies

A Financial Times report also shows that the bulk of fast-growing tech companies reside in Germany and the UK, as two of Europe’s main technology hubs. However, the rising number of CEE-based tech companies on the list suggests this region is viewed as one of the main waypoints on route to increased and accelerated revenue via outsourcing.

Naturally, pricing has a major role in Serbia. As important as it is to get the top-tier talent, businesses also want more for less money through a cost-competitive workforce. A programmer in the UK is likely to be just as good as his Eastern European counterpart, while their daily rates of pay differ considerably. The financial attractiveness (disparity of average salaries) of Central and Eastern Europe, along with the rising number of talented professionals, mitigate the shortage of affordable but decidedly skilled workers in the U.S. and Western Europe. One thing to note here is that, in terms of cost reduction, the CEE region cannot match the low labour costs found in certain Far Eastern countries.

In addition, the globally connected world of today practically forces global-minded companies to not limit themselves to using talent from just one region, especially in cases where demand for IT experts is higher than the number of available specialists.

GEOGRAPHICAL AND CULTURAL SIMILARITIES

The cost of outsourcing makes sense even with the risks associated with such projects. The development of CEE businesses has been largely driven by the concept of nearshoring, where companies outsource work to peers that have a closer cultural and geographic fit. In this way, all the economic benefits of an offshore location are retained, while benefiting from outstanding quality.

The convenience of geographical location is a massive boon. A couple of hours in time difference (at most) within Europe is almost inconsequential when it comes to daily communication within working hours, and the proximity certainly eases day-to-day operations. Travelling is very easy and convenient as well, in case there’s a need for an on-site presence or collaboration. With flexible working hours becoming more important in workplaces, even the east (and west, to some extent) coast of the U.S. can participate in inefficient communication and cooperation.

Another significant reason why the CEE tech landscape is booming is cultural overlap, starting with language skills. English proficiency ranges from moderate to high in most CEE countries. Great(er) familiarity with English is also traditionally higher among tech professionals than a country’s average, due to the nature of the work. Thanks to IT outsourcing’s constant success in recent years, there has also been a spike in government support for it in some countries.

Cultural similarities are also reflected in instances where it’s difficult to quantify into objective data. For instance, certain leaders believe cultural closeness and affinity can play an important role in reaching an understanding and desired results. In that regard, CEE is much closer to the West than Asia, due to strong historical ties that in turn stemmed from numerous similarities without major deal-breaking differences. A direct style of communication and a more collaborative and systematic approach can be seen as advantages of CEE nations over their Asian counterparts.

HIGH ROAD TO LOW COSTS

The CEE region was barely on the radar of foreign tech investors just a decade ago. Thanks to a few key investments and the emergence of the active start-up scene, the entire region has seen tremendous economic growth, promoting it as an important factor in the tech world. As with any booming economy, there are concerns that high levels of investment and rapid development might result in negative side effects, such as higher property and labour rates, making it a less attractive proposition. For now, deep and skilful talent pools that are cost-effective, coupled with geographical, cultural, and linguistic fits, have transformed businesses in Central and Eastern Europe into the forerunners of global digital movements, making CEE a business environment that many want to be a part of.