site.btaRomania and Bulgaria Continue to Dominate Sourcing Industry in SEEurope

Romania and Bulgaria continue to dominate the sourcing industry in Southeast Europe (SEE), with Bucharest and Sofia housing 43% of the region’s vendors. Non-capital cities like Cluj-Napoca in Romania and Novi Sad in Serbia are also emerging as strong alternative hubs, signalling growth beyond traditional capitals, according to the SEE Sourcing Industry Report 2023 released on Thursday by the Association for Innovation, Business Excellence, Services, and Technology (AIBEST).

The report covers 2,293 companies from 11 countries in Southeast Europe across all sourcing segments and sub-segments.

The sourcing industry employs 103,882 in Bulgaria. The three largest companies (out of 813 registered in the country) are Amusement Interactive, VMWare Bulgaria and DXC Bulgaria. The top foreign investor in the sector in this country is the UK. The most widely used languages are English, German and French.

A total of 48% of sourcing vendors in SEE are owned by investors from 63 countries, which goes to show that foreign ownership plays a significant role in the sector. Germany, the US, the UK, and the Netherlands are leading investors, collectively holding about 42% of foreign-owned companies, primarily in information technology outsourcing (ITO).

Within the region, Slovenia stands out with the most active cross-border investment presence.

Unlike recent years with growing employment in SEE sourcing, 2023 saw a decline of over 2,100 employees. Labor costs, which have risen by an average of 15% annually over the last five years, grew only modestly in 2023, indicating potential economic recalibration.

The sourcing sector generated EUR 17.1 billion in revenue in 2023, keeping up growth since 2019. Romania led with EUR 7.9 billion, followed by Bulgaria with EUR 5.4 billion, while Croatia achieved the highest growth rate at 28%. ITO remains the top revenue generator, surpassing BPO in earnings despite having a smaller workforce.

SEE sourcing companies earned EUR 1.4 billion in net profit in 2023, with Bulgaria outpacing Romania in profit generation. The sector’s tax contributions rose to EUR 214 million, with several countries showing notable growth, highlighting the industry’s rising fiscal impact across borders.