SIMILAR ARTICLES

Romania’s budget issue: toxic mix of “American” revenues and “European” spending

Relatively recently joined the functional market economies club, although it has multiple pending development (not just economic) issues, Romania looked around and chose a poisonous… Mai mult

Spectacular GDP growth in Q1: 5%, in the context of rhythm decline in manufacturing to just 1.2%. Dilemmas

Gross Domestic Product for the first quarter of 2019 increased by 5% in real terms compared to the same period of the previous year (5.1%… Mai mult

Equation of public employees in Romania’s expenses compared to EU

Simply put, data recorded over time in the monthly budget implementation published by the Ministry of Finance indicate a share of staff costs in total… Mai mult

Foreign groups of enterprises in Romania and areas where they operate. Hierarchy changes

Germany (16.9%), France (11.7%) and Italy (9.5%) are the countries with the largest share in Romania’s economy by the number of employees in 80,905 groups… Mai mult

Budget implementation in Q1, short and simple: wages and social spending up, general and local investments down, co-financing for projects implemented with European money down

The general consolidated budget recorded, after the first two months of 2019, a deficit of about RON 5.5 billion, equivalent to 0.54% of the GDP… 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

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

So-called "Belina Law" was adopted. Opposition will refer CCR: it turns Belina Island into a fiscal paradise

The Chamber of Deputies adopted on Tuesday the bill that provides for a derogating tax regime, such as tax exemptions or reductions, for land and… Mai mult

Deveselu shield is undergoing an upgrade process; the US provides alternative defence capabilities with THAAD systems

Aegis Ashore anti-missile system installed at Deveselu 99 Military Base will go in the next period through a previously planned upgrade process, the MApN announced… Mai mult

How 2019 began: Investments, allocations by 78.5% lower than the same period of 2018. 21% decrease in co-financing for attracting European funds

The consolidated general budget recorded a deficit of 0.5% of GDP in the first two months of 2019 namely RON 5.2 billion, a "performance" only… Mai mult

Romania's GDP exceeded Portugal’s in 2018: which has a population two times lower and a GDP/inhabitant twice as high

Romania's economy exceeded, at current prices in euros, Portugal's economy in 2018, a country with a population and a surface two times smaller as Romania.… Mai mult

Document / Draft to amend "Greed Ordinance"

The Ministry of Public Finance published Tuesday evening, a day and a half before the approval in the Government, the draft OUG that amends the… Mai mult

The two OUGs on judiciary for the three files are ready and submitted to Government

The Justice Ministry has prepared the two OUG drafts for which the coalition has put much pressure on the Justice Minister Tudorel Toader before granting… Mai mult

ECOFIN / Tax havens list has been updated. Politico: Eugen Teodorovici took EU Finance Ministers by surprise

Finance Ministers of the EU voted on Tuesday at the third meeting of the Council for Economic and Financial Affairs (ECOFIN) chaired by Romania, the… Mai mult

March 15, 15:00, for 15 minutes: Romania really wants highways!

Dozens of companies, mayoralties, sports teams, public figures, organizations and many ordinary people joined the protest "Romania wants motorways". Of course, the country did not… Mai mult

Facebook has removed 30 pages and PSD propaganda accounts in Romania

Facebook announced Thursday that it has closed hundreds of false accounts promoting false content in the UK and in Romania and this is the first… Mai mult

Laura Kovesi, indicted in a second case opened by Magistrates' Investigation Section

Laura Codruta Kovesi was indicted on Thursday in a second case. The section for investigating the crimes committed by magistrates accused her of having led… Mai mult