The Albanian ICT Industry: Data & Insights
IT technology is the fastest-growing sector of the republic’s economy, Hardware is the largest segment, with 55% percent, the ICT market in Albania is the second-largest segment with 30% and software represents 15% of the ICT market.
Some of the advantages of Albania are the skilled and low-cost workers with high English skills and ICT-related education, a good infrastructure, and low taxes for corporations. The sector has constant growth and it supplies other countries with well-educated IT professionals.
Also, Albania’s outsourcing industry contributed 2.1% to the country’s GDP and employed 5713 people in the year 2018, the expectations for the year 2022 are to exceed 15.000 jobs related to this sector, and Information technology sourcing (ITO) will continue to offer the majority of the employment in the industry, the official sources say that this was 53% of the total employees in 2018.
Why somebody should work with Albania Companies.
There are many reasons to work with Albanian companies, from the highly qualified professionals, the low salaries with software engineers median salary being 500-600€ a month with 1 to 2 years of experience, the low taxes for companies, to the constant growth of the industry and being near the European Union.
These are some of the advantages of working with Albanian companies, the low cost while still being a country near the EU, also the transit is easy with Albania because of the advantage of having a Schengen Visa and no need to have a national entry visa that makes business easier.
There’s a good cost-safety relation with outsourcing IT projects to this country, that’s why there are companies in over 37 countries including Europe, North America, Asia, Australia, the Middle East, or the Scandinavian countries. There are also a good number of international companies such as Switzerland, Sweden, France, the UK, or Malta that are developing IT products in Albania for other markets and providing cheaper costs to multinational IT companies.
What somebody should be aware of when working with IT companies from Albania.
The first thing you have to be aware of is that Albania is not in the European Union, so there may be different rules and laws and of course, you are not under the protection of some EU Agreements or laws, this also applies to some international agreements. It is important to say that Albania is a place generally speaking safe, but there are a few things to take into account when working with IT companies if you plan to have a meeting, there’s a high risk of natural disasters, unfortunately, the country has some geographical features that make earthquakes, floods, torrents, droughts something normal. In addition to this, some terrorist attacks had happened since the year 2000 (8). Organized criminal groups are active, particularly in the northern areas at the border with Kosovo, but shooting incidents can also happen in Skopje which is the capital of the country. Also, gunfire can be heard as part of a celebration.
In other aspects, fake companies' scams can occur but they are not too common, the safety is compromised in some parts of the region, but while working with this industry as outsourcing services, there are no more risks than in other countries of the region. It is important to find companies with proven experience, there are a lot of big companies that work as usual from other countries of the region without any noticeable incidents, be sure that the company follows international best practices and everything is according to the law.
How reliable are IT companies from Albania?
With the fast growth of the IT industry in the country, scams grow too but generally speaking Albanian companies are certainly reliable. There are also some laws that can help with this, some of the industry-specific laws are the following:
-Agreement between Albania and EU for the “Horizon 2020” program.
-Law of Copyrights.
-Methodology for Assessing the Value of Information technology.
The ICT industry is really an important piece of the general economic situation of the country, even if it’s not its main driver. Also, Albania is ranked #17 on Mobile SpeedTest Global Index. And for desktop, mobile, and tablet median speed was 3.68Mbps download and 3.11Mbps upload speed.
How does the IT industry from Albania relate to the neighboring regions/countries?
In relation to this, we will analyze the IT industry in Albania, Kosovo, and other countries.
Albania, has a very young working population, with 69% of the employees being between 25 to 29 years old, their major market to export is Italy with 24% of IT services. Also, this country has the lowest corporate tax rate for those companies whose activity is software development, and the country has a very strong entrepreneurial potential while the government continues to boost laws and strategies to help with this.
The ICT sector in Kosovo has a positive trade balance, where 78% of the companies export services, being 27% to Switzerland and 23% to Germany. Also, the government works with laws and opportunities to offer strong learning in IT and English skills.
Bulgaria is a very attractive country for IT and business production outsources, information given by Clutch on research from 2018, says that Bulgaria ranked as 5th top outsourcing destinies and the first one when talking in Europe. We can also see its good development as in 2014 it was ranked 9th by A.T Kearny research.
After bad performances from 2014 to 2016, Greece has stabilized the IT sector and from 2017 started to show slow but steady growth. In the software sector, 64% of the market is application software and 36% infrastructure software. Their internet connection is up to standards having a solid 4G network and with most of the agencies operating with 100/1.000 Mbps.
We also need to have a look at Romania’s industry to finish this section, this country has particularly well-qualified management and technical workers, the current trends in outsourcing in Eastern Europe have allowed Romanian IT service providers to establish themselves in a high position when compared with other European competitors. This country is the 6th in the world, regarding IT certified specialists per capita, ahead of Germany, the UK, and Canada, because of their multilingual and technical skills.
Albanian ICT in 2022
It's 2022 already and Albania is still not an EU member state, which makes the country's ICT lose multiple opportunities for its tech industry. However, things don't look so bad after all - the EU is financing Albanina tech capabilities using EUR 7.5M in 2022, together with additional participation from Germany and Sweden. The funds will be used to power up the startup ecosystem and encourage tech entrepreneurship. So, with some funds and a lot of ambition, the Albanian tech industry has all the chances to shine on the European stage
Albania is a good country in terms of IT industry development, you can find qualified professionals and companies with cheap prices for outsourcing services, the law, and the taxes are also favorable, and there’s a lot of companies from other countries that develop their companies and services in this country. It’s needed to be aware of some aspects that we already discussed in the relevant section, as it’s generally a safe country, there are some things you have to be aware of such as the possibility of natural disasters, scams or terrorist attacks, if you are trying to outsource your products or services to this country, the majority of this aspects will not affect you as you don’t have to be there, but be aware of the scams and always choose companies and professionals with proven experience to work with, and then you’ll be able to get all the benefits of outsourcing your services to this country and also helping them to boost their ICT industry.