E-Sourcing Forum » Eastern Europe grows in prominence

Eastern Europe grows in prominence

March 25th, 2008 at 08:09am David Bush - Iasta

These are not the days of Spies Like Us, any more. ELP recently had a breakdown of some of the strongest LCCS countries of the old Soviet Bloc. Even though these countries would be excellent from a European perspective (because of proximity), we notice a large number of suppliers being utilized from the region, in our US based clients, as well. ELP summarized the strengths of each here:

Hungary-
High growth rates especially in electronics, automotive and steel. High education levels are spurring research and development in, for example, ambient intelligence. German and English widely spoken.

Czech Republic-
The most popular location in Eastern Europe for offshoring. Production of cars and automotive components account for a fifth of industry and are gaining ground, but focus of new investments is shifting from production activities to services.

Poland-
Major investors are Japanese companies, mainly from the electronics or automotive industries. So-called business process outsourcing centers are gaining importance. Growing industries are renewable energies, environmental projects, logistics and services.

Slovakia-
Manufacturing is growing fast, particularly machining, building, automotive, electronic. Plastic and construction materials. Slovakia offers low taxes, relatively low low wages and high productivity.

Slovenia-
Wages in Slovenia are relatively high but so is productivity. Infrastructure and language skills are very good. Slovenia has low corruption. Industry is growing rapidly especially in machine building, chemicals and electronics.

Bulgaria-
Very low relative wage levels coupled with high growth rates. Many companies have announced modernization and expansion investments. In 2007, investors were especially interested in the energy and water supply and distribution.

Croatia-
Leading industries including metals are attempting to improve competitiveness. Corruption remains a problem.

Baltic States-
Language skills are good, especially English and Russian. Important industries include metal and machine building, industry, telecommunication and It software and services. All Baltic states have high growth rates.

Romania-
High growth rates. Main industries include automotive, chemicals, machining and electronics. The IT sector is growing fast.

I will have to say, from my perspective; I have seen very high quality and professionalism in Poland. I am sure the other countries are also highly educated and perform well. This should not just go for the supply base, however. Iasta has an Eastern European outpost and the sourcing community (although not as advanced as other Western countries), is progressing quickly and has a grasp on eSourcing. I do foresee this collective group catching on and closing the gap on best practices, quickly.

Entry Filed under: General, Global Supply Issues/Risk