Eastern Europe: The next silicon valley?

Eastern EuropeOne key to driving healthier economies in the countries of Eastern Europe, particularly in the former Soviet republics, could be significant investments in Web 2.0 development. Could Eastern Europe foster its own Silicon Valley?

"Belarus was regarded as the 'Silicon Valley' of the former Soviet Union, manufacturing over 50 percent of the computers and components in the former USSR." said Sergei A. Rachkov, deputy permanent representative, Permanent Mission of the Republic of Belarus. "Nowadays, [the] software and IT services sector is one of the most successful and fastest growing industries in Belarus."

Rachkov spoke on Wednesday before an audience at an UN conference in New York entitled, "The UN Meets Web 2.0 and ICT Entrepreneurs."

Although India's success story garners a lot of attention, countries in Eastern Europe are also turning to IT as a way to upgrade their economies. During the UN's Web 2.0 conference, representatives of Hungary, Belarus, and Croatia talked up government and private sector initiatives that have helped to lure the likes of Microsoft, IBM, Cisco and SAP to either outsource services from or set up shop on Eastern European turf.

Like Rachkov, Dunja Jurica of Croatia and Dr. Janos Harskuti of Hungary also pointed to highly educated workforces, relatively low cost structures compared to other countries, and reliable government support as some of the advantages they're enjoying as they grow IT businesses in their counties, even though their levels of IT industry penetration vary from one country to the next.

Indian technologists Prahbat Sharma and Lalit Dhingra recounted how IT's contribution to the Indian economy has doubled from about $25 billion in 2002 to more than $50 billion in 2008.

"It is very intimidating to speak after India," conceded Croatia's Jurica, who took to the podium just after Sharma and Dhingra stepped down. "Croatia is very small."

Jurica is chairwoman of the board for Croatia's Information Systems and Information Technologies Support Agency, and is all too intimately familiar with both the geographical and geopolitical obstacles her country faces. Once part of Yugoslavia, Croatia is "a very long country with 285 islands" which has now become a "multi-party parliamentary democracy," she explained. Her country has "1,300 IT companies with 10,000 employees (and) 140 telecom companies with 13,000 employees," she said.

A member of the World Trade Organization (WTO), and also a non-permanent member of the UN Security Council, Croatia hopes to join both NATO and the European Union (EU) over the next couple of years.

Although most of the IT companies are small "niche" software development houses, larger employers in Croatia include two geographic information systems (GIS) companies -- Geofoto and GISdata -- as well as Recro, IN2, and M San Group.

North American and European countries with substantial investments in Croatia include IBM, Microsoft, Oracle, Hewlett-Packard, Ericsson, SAP, Cisco Systems, and Siemens, according to Jurica.

One recent deployment in Croatia won an award at a Cisco conference in Barcelona, Spain for "best distance learning" application. The application is designed to make "staying on the islands" a more appealing prospect for families with young children who are concerned over educational opportunities, she told the attendees.

Source: BetaNews

Tags: IBM, Microsoft, Samsung, Siemens

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