The Landscape of Information Technology in Latvia:

Analysis--Impacts on IT Business 

 

Overview:  The frequent regulatory changes, the bureaucracy, the lack of a coordinated effort and the low level of IT sophistication in Latvia can have significant impacts on a business considering doing business there, but even at this time of changing regulations, it seems that this may be a risk worth taking in order to enjoy the benefits of this still largely untapped resource.

 

Latvia has enjoyed a high level of FDI in the telecommunications field which has enabled relatively fast infrastructure development. The foreign-based telecommunications operators were interested in capturing new markets, and moved quickly into Latvia and other former Soviet states.  As was already mentioned, software design is the most significant segment of the IT sector in Latvia. Software maintenance, integration, consulting and training are other rapidly growing areas. Outsourcing has become a core competence of Latvian software-development companies, which have gained significant experience from large-scale software-development projects undertaken for major international companies.

Latvian software developers are working with companies like IBM, Siemens, Unisys and large banks on IT development projects. A number of global software and technology firms including Lotus, Oracle, Microsoft and IBM are assisting the Latvian government in developing training programs to meet the market demand.

As mentioned in the "Software Development" page, IBM has involved Latvia in an innovative systems development project which may revolutionize the applications industry. Along with teams in Seattle, Belarus, China, and India, a Latvian team of system programmers are part of the IBM's 24-hour-a-day application development project. The teams, linked together into virtual workgroup via Lotus Domino, are rapidly developing serious business applications in Java. IBM has optimized the time schedules, and the availability of skilled but inexpensive labor to build a development team which literally is working, in shifts, around the clock, around the globe. This approach, IBM hopes will lower development costs and duration which will translate into more value (more for less, sooner) for the consumer⁹.

Nevertheless, the frequent regulatory changes, the bureaucracy, the lack of a coordinated effort and the low level of IT sophistication, can also have significant impacts on a business considering doing business in Latvia.   Clearly these businesses are aware of the difficulties associated, but have chosen to incur those risks for the benefits of working in this market that is still opening, and has tremendous potential both in production and market share.

 

 

Last updated December 13, 2001