Romania might benefit from increased attractiveness of its IT industry if it invested in an extensive marketing campaign abroad, said Liviu Dragan, general manager of Totalsoft, one of the leading local software developers and IT service providers, in response to ZF’s question “What should we do to turn a city in Romania into a Silicon Valley?’
Sorin Mindrutescu, country leader with Oracle Romania, believes Silicon Valley is a reference for every country, but to be able to create such a community, several essential requirements have to be met.
“First of all we need a favorable environment for startups, high-quality education and attractiveness centers. Second, a climate favorable to attracting investments and developing the existing businesses needs to be developed and supported. Since specialization is an essential requirement for performance, education is always the starting point from which graduates with real skills are launched on the market,” Mindrutescu said.
“After an over ten-year presence on the Romanian market, we at Oracle have identified a series of factors that could contribute to the improvement of the skills of the new graduates who in turn will eventually contribute to the development of an entrepreneurial IT sector.”
He added Romania needs to be aware that investments and entrepreneurs cannot be convinced to stay without offering something extra that is not available elsewhere.
“An active community to encourage creativity and reward originality is indispensable for the success of such an ambitious project,” Mindrutescu said.
Totalsoft’s Dragan added that Romania should attract investors that focus on embedded and wireless software, which still provide opportunities beyond one’s imagination. He believes the government should allocate resources to promote Romania in this regard and finance one or two specialized associations to promote the local IT industry.
Lucian Isar, the delegate minister for business environment, has recently said a Silicon Valley-type center might be built in Cluj.
“ANIS should do this promotion, but the fees collected from members are very small, EUR100 a year,” said Dragan, who used to be chairman of ANIS (the Association of Software and Services Industry Business Owners).
Andrei Pitis, the current chairman of ANIS, suggests a program to finance startups, called “Innovate 100′ worth EUR3 million. The program should start from 100 teams with a product idea, which will get EUR10,000 at first for three months to come up with a “proof of concept”. Successive selection steps will leave just a small number of teams that will receive EUR200,000 for 18 months to develop sales. This program will not only create one or two companies worth EUR10 million in two years but also a generation of entrepreneurs that has attempted to develop a business at least once.
He admitted that the start-ups, the research and development centers of foreign companies, the outsourcing companies, the Romanian product companies and the representative offices of the international product companies each had an important role in the development of the IT industry.
“As ANIS initiatives, we started talks with all types of companies, we’ll begin a survey of the current state of the software industry and form relevant partnerships,” Pitis said.
He added this transformation of the Romanian cities into powerful IT product development centers is based on the expertise gained in the IT industry, which created experienced technical specialists over the last twenty years.
“The R&D centers (of such companies as Adobe, Ixia, Intel, Freescale, Electronic Arts) can bring the highest level of product expertise and the experience on working with the academic sector. They want to encourage startups because they can make interesting acquisition targets,” Pitis said.
“Romanian product companies can contribute the experience of having achieved success and the desire to help startups. The large representative offices such as Microsoft and Oracle, encourage startups that use their technologies. All of them together can create that complex that could lead to a place like Silicon Valley, not just the startups alone,” he added.
Silviu Hotaran, the man who was Microsoft Romania’s general manager for twelve years and is now running training firm GKTI Semper Human, agrees to the idea of creating startups.
“Stimulating entrepreneurship in the IT sector by creating teams to develop software and then sell it to companies like Apple or Google is just one way of attracting ‘angel investors’. Not only Bucharest and Cluj could thus become sort of a Silicon Valley of Romania but also Iasi; let’s not forget that most Romanian employees of Microsoft in the US come from Iasi,” Hotaran said.
IT colleges turn out 6,000 to 7,000 graduates a year but their number is not enough to meet demand on the labor market. Although employers complain about having trouble finding programmers and that recruitment is getting increasingly more difficult, they make little investment in certifying the skills thereof.
“I’ve noticed the training in the IT field is lacking, people hardly have any certification of certain competencies because companies did not invest in them, as IT salary costs are quite high. A PwC survey showed employers said the problem in recruiting was the lack of technical competencies of the applicants, therefore these shortcomings exist,” said Radu Stanescu, chief executive officer of software solutions provider Sandline. “We have capable people that need to be polished up through these certifications.”
He added another step to boost attractiveness for IT investors would be to provide financial incentives to those who create jobs in this industry in general, not just for software developers (who are exempt from salary tax under certain circumstances).
(English version by Loredana Fratila-Cristescu)