The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

Eastern Think Tank USE THE SOURCES TO OUTSOURCE. A FUTURE

COMPETITIVE EASTERN EUROPE

-Ukraine-

Team Leader : Paula Vaida

Team Members:

Madalina Elena Barcar (Romania, The Bucharest Academy of Economic

Studies)

Joao Saracho de Almeida (Portugal, Universidade Lusofona do Porto)

Paula Vaida (Romania, The Bucharest Academy of Economic Studies)

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

Overall Index (Global level)

Basic requirements

Efficiency enhancers

Innovation and Sophistication Factors

Country/Economy* Rank Score Rank Score Rank Score Rank Score

Estonia 34 4.64 26 5.47 31 4.63 33 4.06

Czech Republic 39 4.51 44 4.89 34 4.59 32 4.13 Poland 41 4.46 61 4.66 28 4.69 61 3.66

Turkey 43 4.45 57 4.75 42 4.42 50 3.79 Lithuania 45 4.41 49 4.84 46 4.38 47 3.83

Latvia 55 4.35 54 4.79 48 4.37 68 3.57 Slovenia 56 4.34 39 5.05 55 4.25 36 4.02 Hungary 60 4.30 55 4.78 52 4.32 58 3.68 Bulgaria 62 4.27 65 4.63 59 4.18 97 3.30 Russian Federation 67 4.20 53 4.79 54 4.26 108 3.16 Slovak Republic 71 4.14 62 4.64 51 4.33 74 3.50 Montenegro 72 4.14 74 4.49 74 3.99 69 3.57 Ukraine 73 4.14 79 4.35 65 4.11 79 3.43 Romania 78 4.07 90 4.22 64 4.12 106 3.20 Macedonia 80 4.04 71 4.52 84 3.85 110 3.13 Croatia 81 4.04 60 4.68 72 4.01 83 3.39 Moldova 87 3.94 93 4.16 99 3.71 131 2.85 Bosnia and Herzegovina

88 3.93 81 4.33 97 3.75 99 3.28

Albania 89 3.91 87 4.24 92 3.80 113 3.11 Serbia 95 3.87 95 4.15 88 3.83 124 2.96

*Apart from Belarus and Kosovo

Eastern Europe²

Infrastructure: the need for reforms and

investments (railways, highways, airports)

Energy and resources: RENEWABLE-

biomass and hydropower;

NUCLEAR; SHALE GAS

Financial services: Russia has the greatest

number of banks in Europe

Business Process Outsourcing: EE is the first destination

for outsourcing services

Retail: this sector is depending on the

general macro economic situation

Security and Defence: some of the EE

countries are members of NATO; high levels of defense expenditure

annually

The Eastern Europe represents the former socialist world which led to a local misalignment between the economic

and political institutions. The Eastern European countries that are currently developing are facing the economic

crisis at different paces therefore, suffering from strong restructuring regarding the industry, the education, the

politics and institutions. Though, cheap and qualified labor force, abundance of natural resources and easy-to-

adapt-to cultures are favorable to achieving economic competitiveness and elasticity.

Table 1: Eastern Europe countries: the Global Competitiveness Index 2012-

2013¹ General economic conditions in Eastern Europe

1 Allurentis Ltd., Emerging Europe – Central and Eastern Europe 2012|2013,

http://www.ukti.gov.uk/download/423761_175400/Emerging%20Europe:%20Central%20&%20Eastern%20Europe%202012-2013.pdf.html , Date of access:

19.02.2013, 10:27 AM 2 World Economic Forum,The Global Competitiveness Report 2012-2013, http://reports.weforum.org/global-competitiveness-report-2012-2013/, Date of

access:18.02.2013, 9:43 PM

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

Investing in Ukraine?

Strengths:

great ferrous and non-

ferrous metal industry,

producing cast iron, steel

and pipes

natural resources:

mineral deposits, shale gas

(3rd place in Europe),

hydro electricity

competitive sectors:

textiles, food-processing,

agribusiness, engineering,

communication,

pharmaceuticals

low-cost professional

labor force

strategic location

oil exploration

Weaknesses:

institutions: lack of

organization, bureaucracy,

corruption

new high-tech industries

are slowly emerging

regulatory burden

professionals leaving

for the Western conditions

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

Weaknesses Opportunities Future competitive sectors:

MANDATORY REQUIREMENT to

becoming competitive => investing in

infrastructure and R&D

• Tourism. All kinds of touristic

activities can be developed in Eastern

Europe

•Agriculture. Large investments in

automatizing, the existing irrigation

infrastructure, proper climates and

extensive lands.

• IT and high-tech industries.

Prof. Viorel Mionel, The Bucharest Academy of Economic Studies

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

IT? Telecomunications? Technology?

Finance?

Analysing the Eurostat Report on the graduaters by

field, it can be observed that people, regardless to the

country of origin, are focused on areas such as

business, social sciences and law. As we know, the

western countries (i.e. Developed countries) are

competitive in launching real professionals in areas

such as those named, while the future needs IT

specialists and programmers to develop a high

productive and sustainable world...And this represents

the core of Eastern Europe’s becoming competitive

challenge...

QUALIFIED HUMAN

RESOURCES

IT/COMPUTING/ENGINEERING/ FINANCE

COMPETITIVENESS

ACHIEVED

Table 2: Percentage of graduates by field Source: Eurostat, http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Percentage_of_graduates_by_field.PNG&filetimestamp=20111017134423,

Date of access: 25.02.2013

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

Sustainable emerging companies

Future emerging companies=>

• BPO/Outsourcing: bilateral benefits

oursourcing company-client company

• Telecomunications: a world wide band to ease

the communication at all levels

• IT services: IT companies will be the solution

for any company to develop in the future

• Industry based-on companies: eco-friendly

energy, shale gas exploitation, uranium

industry

Size

• Multinational companiesGlobal companies (mainly listed companies with a large number of shareholders)

People

• Cultural diversity among employees

• Unique organizational cultures

Organization

•“Tacit” Activities¹ (collaborative, complex problems solving) will take the place of hierarchy

•Fluid communication, the innovation will be encouraged, balance between new-old management school

The Future Company in Eastern Europe. 2022

¹ The McKinsey Quarterly, http://gotimpact.com/press/competitive_interactions.pdf, Date of access 26.02.2013

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

There are different ways of

interaction between companies and the rest of the

world. From a more classified angle, we can say

that there is also a major difference between :

- between them and the (possible) customers.

Here we have:

a)Media and publicity/marketing (forums, social

networks, commercials, banners etc.)

b)CSR activities (concern for the environment)

c)Customer service ( websites, phone service, in-person

visits)

d)Partnerships with other companies

e)Opening new subsidiaries

- of these companies with other partner companies.

Here we have:

a)Specialists (negotiators, attorneys)

b)Suppliers (industry and strategic partners)

c)Marketing

d)Acquisitions and mergers

e)Opening new subsidiaries

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

Unique values of the future

company

Lea

der

ship

Supplier

development

The Future of Work: Competitiveness of Eastern Europe| The Eastern Think Tank

IT R&D

Future

EE

Company The future Eastern European

company will have as important

sectors:

- Human Resources

- IT Department

- Research and Development

- Marketing