The 4 most popular locations to set up a remote IT team
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It is difficult for European companies to find good IT people, engineers, data specialists and other technical staff. For years, companies have been looking across borders for solutions in the form of a remote team or outsourcing. But what is the best destination for setting up such a remote team? Where can you find a large pool of highly educated people who speak good English? We take a closer look at four popular destinations: India, China, Argentina and Poland.
The Indian talent pool
According to a study by Price Waterhouse Coopers, India is not only the largest IT hub in the world, but cities like Bangalore and Pune attract more tech talent than Silicon Valley. India has one of the largest and most highly educated talent pools in the world. Every year, around one and a half million students graduate from the country’s technical universities, and they are not the least. Six of the seven Indian universities with a QS World University Ranking are technical universities. According to research by Gild, Indian developers scored no less than 11% better than their American colleagues on arithmetic and mathematical assessments. Indians also speak excellent English, the country’s second official language.
The Indian IT market
India is the country with the most ISO-9000 certified software companies in the world. ISO stands for International Standard Organization and the certificate guarantees the quality of the design, development, production and installation of software. In addition, more than 75 percent of the global CMMI Level 5 certified IT companies are located in India. The CMMI is a scale that indicates the level of software development of an organization. The model distinguishes five levels, of which 1 is poorly developed and at 5 the development process runs like a well-oiled machine. With approximately 67% of the global market, India is the world’s largest outsourcing destination for the IT industry. India’s outsourcing market currently employs around 5 million developers, who specialize in app development, both native and hybrid, the programming languages Python, Java, JavaScript, C/C++ and PHP and the country is developing rapidly in the field of machine learning, AI, GIS and blockchain technologies.
The advantage of outsourcing to India
By outsourcing your IT or R&D to India, you can not only save a lot on costs, around 50 to 80%, but you can also use the time difference of 4.5 hours (3.5 in the summer) to your advantage. For example, by solving problems before your European employees or users are affected. The Hague-based ARS Traffic & Transport Technology, a leading market player in technological traffic solutions, has had an R&D office in India for this reason for twenty years. In addition to software development, the trajectory control systems and matrix signs along the Dutch highways are monitored from the Indian ARS T&TT office. “If a system fails, we can repair the system before rush hour starts, due to the time difference,” CEO Jan Linssen told us.
The Chinese talent pool
The Chinese government has been investing in improving the country’s tech sector for several years now, and it seems to be paying off. China is not only the birthplace of major tech companies such as Huawei, Alibaba and ByteDance, the parent company of the TikTok app, but is now also ranked 14th on the Global Innovation Index. This is an annual ranking that ranks 126 countries based on their innovation capacity. Science and mathematics are also important focal points at Chinese schools and universities, which is why around 5 million IT students graduate each year. Because technology is a relatively new spearhead of the Chinese government, the IT sector is still very young. Around 57 percent of Chinese developers have only one to three years of work experience. This makes them a lot less experienced than their international colleagues, where half have four to ten years of experience.
The Chinese IT market
According to experts, the Chinese IT sector is highly fragmented. There are few large IT companies to be found and the small companies all focus on the domestic market. This is partly because Chinese developers often speak little to no English. China is now mainly concerned with product development and low-end, relatively uncomplicated IT applications. Despite the fact that IT products developed in China are simpler, the price is no longer extremely low. On average, a cost saving of 40% can be expected. One of the biggest obstacles for foreign companies that would like to outsource to China is the lack of protection of intellectual property. Although the government is already working hard to tackle piracy and other forms of intellectual property infringement more severely. Chinese developers generally excel in functional programming and the programming languages Python and Shell script.
The Argentinian talent pool
Over the past 20 years, Argentina has invested heavily in higher technical education, resulting in around 90,000 students graduating from university with technical degrees each year. In recent years, several Argentine universities have appeared on prestigious international rankings, including QS, the Center for World University Rankings (CWUR), and the Times World University Ranking. As a result, the Argentine talent pool has grown to around 135,000 developers in a short period of time. According to Coursera’s 2019 Global Skills Index, Argentine developers are the best software engineers in the world. They also speak the best English in Latin America. The cost savings that outsourcing to Argentina could bring you depends on the volatile economy. At the moment, the country is relatively cheap and would amount to around 40 percent, but in good times it is more like 20.
The Argentinian IT market
Despite the faltering Argentine economy, the country’s IT sector has been showing strong growth of around 3 to 5 percent per year for a decade. This is partly because the Argentine government made the growth of this sector a priority in 2004 by introducing the Ley de promoción de la industria del software. This law completely frees the sector from restrictions on foreign investment, making software development the most important source of foreign investment, 58 percent, in Argentina. The Argentine IT sector includes around 3,800 companies, including big names such as IBM, Intel, Motorola, Microsoft, Oracle, Siemens, and Gameloft. It is the number 1 outsourcing destination for companies from the United States due to the negligible time difference. The difference with Europe is quite significant, with the Netherlands being four hours ahead. Outsourcing companies in Argentina specialize in app development, open source projects, Cloud Computing, Magento, PhP and DevOps. 60 percent of IT companies are ISO9001 certified.
The Polish talent pool
The best universities in Poland are four technical universities, and around 140,000 technical students graduate there every year. IT courses in the country are very popular not only among Polish students, but also among international students, due to their high level and low costs. The IT industry in Poland has around 300,000 developers, but 80 percent of them work in the R&D offices of tech giants such as Motorola, IBM and Shell. Poland is known as the R&D hub of Europe. Only 20 percent of Polish developers are therefore available for outsourcing projects. Poland has no time difference and no major cultural differences with most Western European countries, and prices are therefore at European level. The cost savings by outsourcing IT or R&D will be around 20-30 percent.
The Polish IT market
The Polish IT market is growing at a steady pace. In 2019, the sector grew by around 2.9 percent and revenues increased by 4.6 percent. This makes the IT industry worth around 8 percent of Poland’s GDP. In addition to the many large multinationals that have established their R&D in Poland, the country is also known as a good location for FinTech projects. Developing these types of projects requires experience to make them bug-free and, more importantly, safe for users. Polish developers are experts in this field. Poland is the largest FinTech market in the European Union with an estimated value of €856 million. As a member of the EU, Poland follows European privacy and intellectual property laws. This can give European companies a huge advantage when starting a web development project. Front-end and back-end development is therefore a much-requested service by European companies. Polish developers are also known for their specialization in PHP, Java and .NET.
This is the time to outsource
All four locations have their advantages and disadvantages, but one thing is clear. Since the outbreak of the pandemic, we have been facing a major challenge worldwide. Businesses have suffered a severe financial blow, but at the same time, the need for digital solutions for customers and employees has increased. Cutting your IT budget is impossible in today’s digital world, which is why outsourcing your internal IT department is a solution that can save a lot of money. Curious about the benefits of outsourcing to India for your company?