The Silicon Valley of Transylvania

What severely lacks in Romania, in my view:

a). the business environment; the internal demand isn't enough to support starting and growing business on the local market; building products for external markets from get-go is difficult. This leads to:

b). the business talent; the number of big companies (in the sense of growing into an international market) founded in Romania and managed by Romanian business people can be counted on the fingers of one hand. Leading to:

c). the product talent; since there is no big demand for products in the local market, there is no way to grow local product designers - the people that can and want to design and build a product just find it easier to emigrate, depleting the already small pool of available talent.

All of this leads to companies coming into the country just for technical talent, which is easily employed as outsourcing contractors, and keep the self-perpetuating circle of the tech scene being driven by outsourcing. And this effect is also visible at startup level, where the Romanian-funded startups often have the headquarters, and product designers in US or Canada, and the technical talent in Bucharest or Cluj.

I have no idea how to fix this problem, of even if it is a problem in the first place - I feel that as the local economy matures, niches for specific targeted products will appear, facilitating the development of locally-designed products built by local companies. But starting startups based in Romania targeting foreign markets is still an uphill battle versus companies local to those foreign markets.

- All eastern European countries have a great talent but that talent is created during socialist area (free education, focus on math, etc.). However, quality of new talent is not so great. If somebody is good, they go to work in Germany / Austria / Switzerland.

- Work and business habits are terrible. It seems like they always try to scam you.

- Society really looks down on entrepreneurship. To be honest, societies in Montenegro, Hercegovina, Romania and Albania are a little more open to entrepreneurship than others but..

- Laws are very unfriendly for small business / entrepreneurship. Basically, one needs to break the law in order to run the business.

In short, I'm not so optimistic :(

But this article is specific to IT, and I do not see the Romanian IT anywhere near its potential. This is because the local IT is almost entirely focused on outsourcing, not on original development. Big companies have significant presence here (Electronic Arts, Adobe, Intel, Microsoft each have ~200,300 dev offices here, although not everything is core R&D ). Original Romania IT has a very strong presence in anti-virus (for some reason it seems a lot of local IT youth are experts on exploits...). Many young IT Romanians choose to go abroad (in Microsoft Romanians are the 4th largest foreign community, after Indians/Chinese/Russians).

Since I've returned I've been approached several times by US/Western Europe based entrepreneurs who desired to move development to Romania and open office here, solely for cost reasons. Purely for outsourcing, this is my 2c:

- Romania has significant talent pool

- EU membership (with all tax/export/legislation alignment that entails)

- Good spoken English is pretty much universal, German/French are common

- Political stability (governing parties rotated power several times in past 20 years, peacefully)

- Cost is higher than one would expect. Bucharest/Cluj/Timisoara all have high cost (office) and salaries are higher than some neighbors. If the outsourcing decision is purely cost driven then Ukraine has a better deal for you, with a similar talent pool.

But I would like to see a lot more IT original development coming out from Romania. The article gives some examples, like LiveRail, but overall I see a lot more outsourcing done here than original development. I'm glad projects like cloudhero.io originate here.

While in Germany, I watched clear demonstrations of discrimination towards Romanians in a tech startup. They really had to prove themselves. Although extremelly talented, "jokes" would always fly around the "gypsy stereotype".

That being said, as a startup founder, I'd assume it'd be much harder to raise money from an UK VC firm.

This is so true, sadly! I can imagine the reason Tech Crunch is trying to light the stage in rose colors but it's good to keep your expectations realistic. Don't get me wrong, the Romanian higher education was very self-exigent and managed to spit out high quality specialists for quite a while even after the fall of the Iron Curtain. The good teachers however, were being hunted like crazy. Only in those several years of my Computer Engineering study I've had to witness the departure of half of the professor assistants that were teaching me at one point or another. The good half. On graduation only a small minority of my fellow student colleagues enjoyed meaningful support from their mentors. For most of us the mentorship was only a protocolar procedure, and the quality of our licence projects were being dictated only by our auto-didactic abilities - very far from what I heard University to be once upon a time!

The programmers are decent and hard working, but nothing spectacular going on. They might not be your first pick when you want innovation. We are mostly self-taught ( thanks DoD for the Internet), and contrast the poor courses that are held at the Romanian universities. There are programmers that range from mediocre to good. Comparing to colleagues from London, or the US, we are not as good. They know more things and are more specialized. They work at a faster pace and work on hard problems. We make decent work though, but nothing mind blowing. If you want guys that can innovate, better look elsewhere like: the US, UK, Finland, Holland and other Nordic countries.

Here is the factual truth about Romania. It is a country of huge contrast. It has really good results in math and compute science Olympiads, but it is at the very bottom at math performance for the population at large. See PISA test results. 40 % of Romanians do not know basic and simple concepts from math. 40 % also are functional illiterates. This is much worse than the US. At the peak level We seem to be very good at IT, yet there is virtually not an algorithm or an innovation that bears a Romanian's name. You learn about Dijkstra, Turing, Fermat and Leibniz, but not Popescu or Iliescu. You hear about how good we are, but no Romanian University is within the top 500 at the computer science section. There is a lot of impostors in our universities and plagiarism is high. The dean of the Technical University of Cluj plagiarized courses from Berkeley and presents them as his own.

Romania has one of the largest internet speed, but only half of the country is connected. And within those that do use it, the vast majority are on Facebook and Youtube. Telekom just published that Romania has the poorest internet usage when it comes to business related activity.

Half of the population still lives in the rural areas, and the conditions are horrible. Over half of Romanian schools do not have running tap water or a decent toilet with flushing water. Mostly are again in the rural areas. But also in the surrounding regions of Cluj, and other major cities, there are entire neighborhoods that do not have access to the sewage network. And they are part of the city of Cluj, not other entities.

Romania is featured as a poor country by World Vision, which needs western support. It is listed among Albania, Georgia and a host of African countries. The orphanage footage of Romania in the 90' comes to mind.

And the list shocking contrast goes on and on.

We started out in outsourcing too but shifted to product in 2008 and managed to build a profitable business selling globally. I'm seeing more and more people interested in making the shift or jumping right into product, however we lack good product managers, marketing and funding. Overall i'm optimistic and i think we have lots to show if we focus our energies in the right direction.

What exactly is a "certified IT specialist"?

Romania is a country where a large chunk of the populace get around by cart and donkey, where post-communist corruption is rife, where decades on they still can't decide what to do with the half built palace that occupies half of Bucharest, where gangsters run most of the hospitality industry and god knows what else.

It's a chicken and egg problem, of course, as enterprise will bring wealth (in theory) which in turn will solve some of Romania's more immediate woes, but it's still a tiny tiny niche in a very poor country.

Their only saving psychological grace is that Moldova are next door, and they make anyone look rich.

Edit: on a Re-read, this comes across as horribly negative. I'm a big fan of Romania and its prospects - what I failed to mention is that I met a lot of intelligent, interesting and passionate younger people - and they will be the ones that drag Romania solidly into a functioning state - but the reality is that there's a lot of work to do.