Eastern Europe goes further East to outsource
Companies in Eastern European countries are going further East in search
of the Holy Grail that is outsourcing.
During the previous decade, US and Western European companies looking for
a low-cost manufacturing base elsewhere have made investments in
countries like Poland and Hungary.
But as these countries have become more industrialized, they have
reinvented the outsourcing wheel and shifted work to Central European
countries like Romania, Russia and Ukraine.
According to a recent Time article, some Eastern companies are looking to
go further East in the direction of China and other parts of Asia.
Hungarian companies are said to be leading the charge and have outsourced
production in countries like China, Taiwan and Vietnam.
No surprise. It was actually Hungary who led the outsourcing wave towards
Central Europe, having invested nearly $3 billion in countries like
Romania and Ukraine.
There are about 4,000 Hungarian-owned companies in Romania and a third of
them catering to outsourcing.
Polish companies are following suit although it is larger players that are
scouting for service providers in China and Southeast Asia. Meanwhile,
smaller Polish companies have been making modest investments as well in
Romania and Russia.
It's only a matter of time before these companies go further East as well.
