63% Swedish companies in the tech sector might consider moving their IT operations to Lithuania
A new survey from Enterprise Lithuania shows, Six out of ten Swedish companies (63%) state that they might consider moving their IT operations to Lithuania. Sweden is an idyllic place to live and work. Still Swedish IT & Telecom Industries predicts they will face a deficit of 70,000 skilled workers by 2024.
The solution to this huge problem could be nearshoring. Nearshoring is a buzzword, primarily in IT, which means that a company outsources all or parts of the business such as service and development in nearby countries. The advantages that are often highlighted are a similar corporate culture and that you work within the same time zones.
One of the fastest-growing countries in nearshoring in Europe is Lithuania, which in recent years has become a popular alternative, especially among fintech companies. Lithuania is one of the few countries where the country’s Minister of Finance has developed a special strategy for fintech.
– We notice a strongly growing interest from Swedish and Nordic companies when it comes to nearshoring from Lithuania. Over the past decade, many companies in our national IT industry have developed into an established partner for global technology companies, which are looking for software technology, AI-driven solutions, product development or compliance (AML), says Daina Kleponė, Managing Director of Enterprise Lithuania.
In a smaller new survey in the autumn of 2021, Enterprise Lithuania asked 455 people active at various levels and functions in the tech sector in Sweden about their views on nearshoring, and then especially from Lithuania. Six out of ten (63%) respondents state that they might consider moving their IT operations to Lithuania to meet the needs – nearly eight out of ten (75%) state the search for staff and employees with cutting-edge skills as the biggest challenge in the short-term perspective.
When asked what the respondents associate with the Lithuanian IT industry, above all, economic efficiency as well as similarities with the Swedish corporate culture and opportunities for collaboration were highlighted.
A Scandinavian pioneer in nearshoring in Lithuania is the e-commerce company Boozt. This summer, they acquired the Lithuanian tech company Estina, with which they have collaborated for ten years, and which is described as an important part of the company’s success.
– Scandinavians and Lithuanians share a common view – we focus on achieving goals and taking ownership and responsibility for what we do. We were a perfect match when it comes to culture and ambitions, and that is probably the secret behind a good sourcing partnership, says Jesper Bröndum, co-founder and technical manager at Boozt.
FACTS ABOUT THE SURVEY
The survey was conducted in the autumn of 2021 in Sweden via SurveyMonkey on behalf of Enterprise Lithuania via direct mail to relevant respondents and links on TechSverige (IT & Telecom companies) as well as the Swedish FinTech Association’s website/newsletter. The questionnaire was sent to 455 employees at Swedish companies, authorities, organizations, purchasers with strategic responsibility regarding IT issues, and/or are involved in their company’s IT orders.
Enterprise Lithuania is a non-profit agency under the Ministry of Economy and Innovation of Lithuania, established to promote entrepreneurship, support business development, and foster exports. The team at Enterprise Lithuania provides reliable advice and assistance on starting, growing, and exporting Lithuanian businesses, with a focus on SMEs. www.enterpriselithuania.com
Unicorns Lithuania–the association uniting start-ups–estimates that there are 766 start-ups operating in the country. Their total number increased by 4% in a single quarter.
‘Start-ups operating in Lithuania have been growing steadily and make the whole system grow. The fact that we are witnessing growth even during these tense times–the ongoing pandemic and the war that has broken out–shows that the whole community is sustainable. The number of employees is growing steadily every quarter and so does the amount from taxes going to the Lithuanian budget. The average salary in start-ups has increased by 15% in a year and has reached EUR 3026’, says Inga Langaitė, head of the association Unicorns Lithuania.
Space is one of the areas where Lithuania has made a strong entry. Today more than 30 Lithuanian companies participate in space supply chains, a number that is expected to more than double within the next five years. The space sector is one of the fastest growing with an annual growth of 6.7% per year. ‘By participating in international Space programmes, Lithuania proves it has a strong tech sciences ecosystem and high-tech industry needed for participation in the global space market’, says Aušrinė Armonaitė, Minister of Economy and Innovation of Lithuania.