Tagliabue, The Eastern Bloc of Outsourcing, NYT, Nov. 2009.
“Eastern Europe Becomes a Center for Outsourcing.”
By John Tagliabue
PRAGUE — Fillip Pejfar works in a sparkling new office tower here on the western edge of the
Czech capital, using high-resolution scanners to enter accounting material into the computing
, the global business consulting group.
Mr. Pejfar’s bookkeeping is not helping Czech clients. His expertise is meant for companies like
the French chemical giant Rhodia and the big German software group
Prague is turning into a center for outsourcing white-collar jobs like bookkeeping, data crunching
and even research and development. The Czech Republic and other Central European countries
like Poland, Hungary and Slovakia are clamoring to serve the needs of multinational
corporations — and themselves.
The United States may turn to India to fill many of its call-center jobs and the like. But Western
Europe is turning more frequently these days to its own backyard, transforming a few urban
centers of the former Communist bloc into the Bangalores of Europe.
American companies are cashing in as well. In recent years,
, Dell and
among others, have outsourced services to Eastern Europe, or helped other American companies
To be sure, Eastern Europe, with an outsourcing business estimated at about $2 billion this year,
represents just a fraction of the global outsourcing market, estimated this year at nearly $386
billion. But Robert H. Brown, an outsourcing analyst at Gartner Dataquest, expects growth in
Eastern Europe to outstrip the rest of the market in the next four years, expanding close to 30
percent by 2010, compared with 25 percent for the global market.
What is unusual about Eastern and Central Europe is that their most advanced cities offer a
potent mix of attributes that even Bangalore cannot rival: a highly educated, multilingual pool of
talent in an increasingly affluent consumer market — all barely a stone’s throw from its prime
Outsourcing is booming as this region moves more quickly to integrate itself economically with
its more affluent neighbors to the west, reflecting progress that is reducing the high
unemployment that plagued these countries for years after the fall of the Berlin Wall and the
collapse of the Soviet empire.
It is also feeding a real estate boom in high-rise office space. Despite high unemployment in