SIMILAR ARTICLES

Salaries in companies with domestic capital increase faster but remain half the level in foreign companies. Why

Salaries in domestic companies continue to grow as staff shortage widens, but remain half the level registered in foreign firms, according to an analysis by… Mai mult

BNR meeting minutes: Six comments on local economic development

Although gross fixed capital formation had a surprising positive contribution to the economic growth in the first part of the year, members of the National… Mai mult

Public deficit, out of European practice: How others stand

Romania recorded the largest public deficit among the EU states in 2018, according to data published by Eurostat, except for Cyprus (-4.8% of GDP last… Mai mult

IMF report – Conclusions show that Romania has become a new and atypical growth model: through imbalances. Which will soon get to be paid

Romania’s macroeconomic imbalances have increased in the past year, and economic and fiscal policies have to change so that the population’s incomes and prospects of… Mai mult

Discharging imbalances on RON exchange rate could start even this year. Analysts’ scenarios and BNR’s uncertainty

Analysts’ scenarios on the evolution of the exchange rate are rather prudent for the coming months, but severe for the beginning of the next year… Mai mult

Cronicile

Domestic software and IT services market declines, growth will only be based on external market

de Mariana Bechir , 15.10.2018

Total turnover in the IT sector increased by 11 percentage points in 2017 compared to 2016 and exceeded the four billion euro threshold forecasted, according to Annual Report of the Employers’ Association of the Software and Services Industry (ANIS).

Domestic software and IT services market had a weaker development and only had a 2.1% growth in 2017 compared to the previous year, reaching EUR 975 million.

The association predicts that this trend will continue and it will be reached to the point where almost the entire growth will be supported by exports, which are expected to reach EUR 4 billion in 2019, by EUR 1 billion more than in 2017.

“We have an underdeveloped, frozen market, a situation that has a strong negative impact on the domestic ecosystem of hi-tech firms, which do not have a home market where they can test their products before approaching the foreign markets. It is hard to talk about investing in a country where virtually everything that is created is designed for exports,” said ANIS President Teodor Blidarus.

As an ANIS previous annual report (2016) mentioned, a unique phenomenon for this region happened in Romania: some IT companies have almost entirely captured the market for complex IT solutions provided to the public sector and state-owned companies (especially in energy and transport fields) and relations with political power play the most important role in awarding these contracts.

Last year’s report shows a decrease in the share of products acquired by the state.

The business sectors that contributed the most important shares to domestic revenue of the IT software and services market:

  • manufacturing – 22%
  • public sector – 20%
  • banking – 16%
  • telecom – 11%
  • utilities, retail, services – 8%, each.

By comparison, in 2014, revenues of Romanian companies obtained in the country were:

  • at the rate of 32% from projects carried out for the public administration
  • 16% for customers in the manufacturing industry
  • 14% for clients in the financial-banking sector
  • 9% for telecom companies and 8% for companies in the utility sector.

How domestic demand evolved over the last few years

Export – 75.6% of the total value

Of the total volume obtained last year:

  • the export of IT software and services contributes decisively, EUR 3,025 billion euro (75.6%, at the value of the entire IT sector, 14% up compared to the value registered in the previous year)
  • internally generated revenue increased by only EUR 20 million (2.1%), from EUR 955 million recorded in 2016 to EUR 975 million in 2017. It is a trend of the last few years, primarily generated by a decline in the state’s demand for such products. For comparison, in 2015, this revenue increased by 10%.
  • of the total exports of IT products and services, about 75% go to the European market, 22% to the US and the rest to other markets

Top 10 companies generate about a quarter of the market value

Out of top 300 largest IT software and services companies operating on the local market, 40% are Romanian companies.

Workforce in this sector

  • total number of employees with full-time contracts in the software and IT services sector reached 89,850 specialists in 2017, which means an increase of 7,5% compared to 2016
  • out of them, 88.6% hold technical positions and the others positions in non-technical departments
  • three-quarters of companies with the largest number of employees have foreign capital.

Without incentives, growth capping is expected

For 2018, it is estimated that total revenues generated by the software and IT services industry to reach EUR 4.5 billion, but also a growth capping.

“It is pleasing that the tech industry continues to grow but the forecasts show that under similar conditions it will soon reach a plateau stage.

To maintain and accelerate the growth rhythm, companies need a predictable and healthy environment that encourages significant technology investments across the economy and the public system. At the same time, tech industry focuses its development priorities on the innovation area and education projects with medium and long-term impact, which is also reflected in ANIS projects,” said ANIS President Teodor Blidarus, quoted in the report.

Mergeți în homepage ›

Publicat la data de 15.10.2018

Lăsați un comentariu


NEWS

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult

Romania loses competition for a seat at UN Security Council. MAE Excuse: Campaign started too late

Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult

"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning

Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult

Mugur Isarescu: We should make a film for Viasat History about treasure in Moscow

A book should be written or a movie should be made and sent to Viasat History about a treasure evacuated to Moscow, as it is… Mai mult

Rhythm of commercial vehicle registration increases 3 times faster in Romania than EU average

Today, the European Automobile Manufacturers Association (ACEA) announced the status of commercial vehicle registrations in EU member states + EFTA in April and cumulated after… Mai mult

4.2%, from 3%: BNR has increased inflation forecast for 2019

The National Bank increased the inflation forecast for 2019 by 1.2 percentage points, from 3% to 4.2%. Also, the forecast for 2020 goes up by… Mai mult

Emergency procedure at European Court of Justice for Romania’s question: Are MCV recommendations mandatory?

The Court of Justice of the European Union (CJEU) has decided that Bihor Court’s request to be discussed under the emergency procedure, which is a… Mai mult

Government decides to increase external borrowing ceiling by EUR 4bn. It has consumed program resources for two years

The Government's agenda for Wednesday also includes the draft decision to increase the foreign loans ceiling for 2019 and 2020 by EUR 4 billion, up… Mai mult

Preparations for Summit in Sibiu - European Commission’s recommendations for EU's strategic agenda

On Tuesday, the European Commission presented a series of policy recommendations on how Europe can shape its future within an increasingly uncertain and multipolar world.… Mai mult

Meeting between Prime Minister Viorica Dancila and Chinese Prime Minister Li Keqiang: talks on a possible involvement of Chinese companies in PPP projects in Romania

On Friday, Prime Minister Viorica Dancila had a meeting with Chinese Prime Minister Li Keqiang, during which she stated her interest in involving Chinese companies… Mai mult