The Advantages of Outsourcing IT Services to Lithuania

Lithuania has been recognized as one of the top destinations in Europe for outsourcing IT services, with a highly skilled workforce and a competitive business environment. The government has also made major investments in the development of the IT sector, including initiatives to promote the use of technology in education, healthcare, and business.

If you are still unsure about which country to choose for your outsourcing needs, you might want to consider Lithuania. In this post, we will provide an overview of what this country has to offer in terms of outsourcing and what your business can expect from it.

Brief Overview of the IT Environment in Lithuania

Global Innovation Index of Lithuania

Lithuania has been ranked 34th in the Global Innovation Index 2023 among 132 economies. Notably, the country has seen improvements, securing the 32nd position in innovation inputs and the 37th position in innovation outputs, both higher than the previous year. This underscores Lithuania's commitment to advancing its innovation landscape.

The Real GDP of Lithuania

Even though the real GDP of Lithuania will decrease by 0.4% in 2023 due to high inflation, which will impact private consumption, along with weak global demand, in 2024, the real GDP is projected to rise to 2.5%. As input costs and consumer prices decrease, growth is driven by investment and private consumption.

Revenue of the IT Outsourcing Market in Lithuania

Moreover, the IT Outsourcing market in Lithuania is anticipated to achieve a revenue of US$157.80 million in 2024, with an expected annual growth rate of 11.35% (CAGR 2024-2028). 

This trajectory will raise the market volume to US$242.60 million by 2028. Projections also indicate that the average spend per employee in the IT outsourcing market will reach US$120.20 in 2024.

Why Choose IT Outsourcing to Lithuania for your Business?

When it comes to IT outsourcing, Lithuania offers several advantages. Businesses can easily reduce their operating costs while still accessing high-quality IT services.

Talented Work Pool

Despite its modest population of about 3 million, Lithuania has more than 30 universities that offer English-language degree programs to international students. Lithuania, with its own culture and sophisticated institutions, is a fascinating study-abroad location. Several Lithuanian universities, including Vilnius University, Vilnius Gediminas Technical University, and Kaunas University of Technology, have achieved high global rankings.

With the largest percentage of university graduates among those between the ages of 25 and 34, Lithuania ranks among the best educated nations, according to the OEDC Data. Higher education is held by 56% of the population. This proportion ensures that highly competent and educated developers are hired.

The Lithuanian Ministry of Economy and Innovation plans to expand the local IT professional pool by launching a post-graduate retraining program that will graduate 2,000 software developers and other IT professionals by mid-2023, enhancing their skills in cybersecurity, cloud computing, and AI.

Good Business Environment

The favorable conditions for business, stability in both economic and political aspects, and a 15% corporate tax rate position, Lithuania is a good choice for outsourcing IT services. The Lithuanian government has implemented measures to promote the expansion of the IT sector, incorporating tax benefits to support businesses. 

This attractive legal and tax framework helps tech companies to grow, attract investments, and make significant exits. Furthermore, the success of tech entrepreneurs in these exits creates a snowball effect in which they reinvest in new businesses, adding to a never-ending cycle of growth and innovation.

Successful company relocations and expansions indicate Lithuania's safe business environment. Lithuania has approximately 450 start-ups and offices for 13 of the 20 largest international corporations, employing over 2,500 technical people, such as Google, Western Union, IBM, Oracle, etc. Many IT companies in Lithuania create software and offer services to European countries.

Cost-Effective IT Outsourcing Prices

The decision to outsource software development often comes down to cost. To compare prices and products, TechBehemoths offers a database of hourly rates from different tech companies. Lithuania has relatively lower rates for IT outsourcing compared to some other countries in Eastern Europe. 

For example, the prices for software development services are typically ranged from $30 - $70 and $70 - $150 per hour. However, it's worth noting that in Vilnius, the rates can go up to $100 per hour.

To Sum Up

After considering essential aspects in selecting a country for a specialized development team, it is clear that Lithuania provides an ideal environment for collaboration. Hiring a professional team is a strategic business decision that is influenced by a variety of life circumstances such as cultural, social, economic, and political. Through thorough analysis, research data, statistics, and reports, our article set up that opting for dedicated developers from Lithuania can be a successful strategic choice.