Central Eastern Europe - a stronghold for innovation
Some insights first
Poland is a Central European country known for its rich history, cultural heritage, and strategic geopolitical position. Its capital and largest city is Warsaw. Poland is bordered by seven countries, including Germany to the west. The official language is Polish, and the currency is the Polish złoty. Poland is a member of both NATO, since 1999, and the European Union, since 2004.
The country has a strong economy, driven by industries such as manufacturing, information technology, and agriculture. Poland is also famous for its historical cities like Kraków and Gdańsk, as well as its role in key events such as World War II and the Solidarity movement, which contributed to the fall of communism in Europe.
Romania is a country located in Southeastern Europe, known for its rich history and diverselandscapes. The capital and largest city is Bucharest, often referred to as "Little Paris" for itselegant architecture and vibrant cultural scene. Romania features the majestic CarpathianMountains, the picturesque Danube Delta, and the legendary region of Transylvania, famous for its association with Dracula folklore. The official language is Romanian, and the country's currency is the Romanian leu. Romania is neighboured by 5 countries and has direct access to the Black Sea at the East.
Additional demographics and stats
*At the time when this article was published
World-class education, strong technical expertise and countless languages spoken not enough?
Both countries have a well-educated, multilingual workforce with strong expertise in technical fields, such as IT, engineering, and R&D. They rank highly in STEM education and software development skills.
IT
According to HackerRank, Romania (#20) and Poland (#3) boast some of the best IT developers globally. Both countries make a compelling case, combining top-tier talent with labor costs that are 30-50% lower compared to the U.S. or Western Europe.
Business Services
Romania and Poland have established themselves as significant hubs for business services in Central and Eastern Europe as well demonstrating substantial growth and employment in this sector. With a 67% increase for Romania compared to 2014 and 83% for Poland, together thesetwo countries employ more than 650.000 professionals in business services.
Automotive & Battery Manufacturing
Romania and Poland have significantly advanced in Research and Development (R&D), automotive manufacturing, and battery production, establishing themselves as key players in these sectors within Europe.
Poland plays a leading role in the battery supply chain, being the second-largest producer worldwide. Lithium-ion batteries account for more than 2.4% of all Polish exports, with the value of these exports increasing 38-fold over six years, from around PLN 1 billion (EUR 0.21 billion) in 2017 to over PLN 38 billion (EUR 8.24 billion) in 2022. (PSPA.COM).
Romania is developing its battery production capabilities. For instance, Prime Batteries Technology, a local producer, has partnered with EIT InnoEnergy to invest €1 billion to boost its production capacity to 8 GWh by 2026, up from 0.2 GWh in 2022. (TheRecursive.com).
Workforce stats
Resources: n-ix.com, Statista, intellias.com
Strategic geographic locations
Located at the crossroads of Europe, both Romania and Poland provide strategic advantages for logistics and market access. Poland, as the largest economy in the CEE region, serves as a gateway to the European Union's massive market, while Romania connects Western Europe to the Balkans, Turkey, and the Middle East.
Advantages:
- Proximity to major European markets, reducing transportation costs and delivery times.
- Membership in the EU ensures seamless trade and access to over 500 million consumers.
Government Support and Incentives
Both countries actively encourage foreign investment through tax incentives, grants, and EU funding programs. For instance, Romania offers state aid schemes for greenfield investments, while Poland's Special Economic Zones (SEZs) provide tax relief and other benefits to investors.
Highlights:
- EU co-funded infrastructure projects have enhanced connectivity and business ecosystems.
- Business-friendly policies aimed at fostering innovation and industrial growth.
The elephant in the room
With both countries in the immediate proximity of Russia-Ukraine conflict, investors have to add one more variable to their risk matrix but Romania and Poland do not remain passive in mitigating investor confidence.
- Economic and natural resource independence
- Strategic infrastructure investments
- Military infrastructure enhancement
- Port infrastructure investment
And many more measures are being taken to ensure growth in this region is not disrupted.
Final thoughts
While Poland and Romania’s workforce was impacted as some of the large organisations present in these markets have downscaled globally over the past two years, these 2 countries continue to be unrivalled in their ability to provide value through their top tier talent, excellent infrastructure, cultural and ethical synergies with the western world, excellent English language proficiency (Romania#12 and Poland#15 globally according to EF) and practically nonexistent violent crimes.
How can Thrivity help you succeed?
Thrivity offers end-to-end support for companies expanding into Central and Eastern Europe, ensuring a seamless and efficient market entry. We assist with building a strong business case, conducting comprehensive location assessments, and managing entity stand-up and incorporation. Our expertise extends to developing policies and procedures, hiring and employment strategies, and ongoing operational improvements across HR, Finance, and IT functions. With a deep understanding of the regional landscape, we provide tailored solutions to help businesses scale successfully while optimizing costs and mitigating risks.
