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Former Cold War Foe is Outsourcing Friend

ITBusinessEdge – by Ann All

The former Soviet Union, which was a foe of the U.S. and Western Europe during the Cold War, is proving to be an increasingly friendly outsourcing destination as the economy heats up.

As wages rise in India and the country tries to address a talent shortage, companies are broadening their outsourcing base by looking for partners in other areas of the world.

One area that could benefit is Eastern Europe. HP has already opened business centers in Bucharest, Sofia and Bratislava. Indian BPO providers and U.S. firms like Accenture are recruiting in the region, attracted by a workforce with fluency in multiple languages and skills in IT, economics and finance.

Arkadiy Dobkin, CEO of Eastern European outsourcing provider EPAM Systems, in a recent interview with IT Business Edge, said that the "Soviet heritage" of a strong engineering education produces 60,000 specialists a year in Russia alone.

Unfortunately, Eastern European governments were not as quick as their counterparts in regions like India to recognize the economic benefits of IT outsourcing. Belarus, Russia and Ukraine, though, have started to provide economic incentives to encourage outsourcing, according to Dobkin.

The result: Russia's IT export industry has doubled over the past two years to reach $1 billion, and Dobkin said the market is on target for 30 percent growth in 2006.