A Region In Transition
What we're talking about: The United Nations Statistical Division defines Eastern Europe as including the nations of Poland, Belarus, and Russia, south to the Czech Republic, Slovakia, and Hungary, to the Black Sea-bordering countries Ukraine, Romania, Moldova (okay, Moldova's landlocked), and Bulgaria. The inclusion of bicontinental Russia in Eastern Europe leads to the oddity of remote Siberia being cited as a significant Eastern European software development site.
Other definitions of Eastern Europe would include some or all of the Southern European nations of Albania, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, and Serbia; Eurasian countries Armenia, Azerbaijan, Georgia, and Kazakhstan (I insert Borat joke here—not); and the Northern European Baltic States Estonia, Latvia, and Lithuania. But sometimes Poland, the Czech Republic, Slovakia, Hungary, and Slovenia are referred to as "Central Europe." CEE, short for "Central and Eastern Europe," is a newly emerging term of convenience for referring to many or all of these European or Eurasian countries.
What they all have in common is that virtually every one of them is currently under intense scrutiny for its potential as a base for software development. And everywhere you look, you find differences.
If you want to work with programmers in Belarus, which was considered the Soviet Union's Silicon Valley and today has some of the lowest software development costs in Europe, an outsourcing company like Minsk-based EffectiveSoft can help you. Going it alone, though, could be tough: Inc. magazine calls the tax situation in Belarus "a nightmare."
The Baltics have the highest growth in GDP right now. Estonia has the highest per capita usage of computers in the world. The Czech Republic is turning out some 5000 engineering grads a year, the Ukraine about seven times as many.
In Romania, as in most Eastern European countries, salaries are going up due to various factors, including improving economies and a shrinking talent pool. Romanian software developers are now getting something like 50 percent of what a Western developer gets, and in a year or two, will probably be close enough to Western rates as to make the country an unappealing offshoring target. Since economic and other forces are operating unequally on the many Eastern European countries, first one and then another country becomes the current hot EE outsourcing target, but in the games industry, one source describes the formerly crucial pool of cheap Eastern European programming talent as simply "gone."
Why is the talent pool shrinking? Well, if you were a bright, talented graduate of an Eastern European engineering program and you knew that you could stay in Eastern Europe and earn X or move to the U.S. or Western Europe and earn 2X working for a world-famous software company, what would you do? Eastern Europe is experiencing a programming talent brain drain. Eastern European universities have responded by pumping out more graduates, but new grads are diving into the labor pool with, as Panayotova puts it, "mediocre theoretical knowledge and basic, if any, practical skills." Not that there isn't still a lot of talent in Eastern Europe, but you have to know where to look for it.
