In July, Moldova Innovation Technology Park (MITP) hosted its biannual Sum IT Up event to report on the status of the tech industry. MITP, an innovative e-Park that provides residents with a 7% flat tax rate, has been working to carry out the strategic plan for 2021-25, while also adapting to the shifting economic and political context driven by the war in Ukraine.
MITP represents about 80% of Moldova’s tech industry and is the critical driver for domestic IT sector growth, offering a competitive cost and tax advantage, and attracting foreign tech investors. MITP was developed through a joint effort of the Moldovan Govt and private sector, with assistance from USAID and Sweden, and is a regional success story, receiving the Best Tech Ecosystem award from the International Telecommunication Union (ITU).
What were the findings of MITP?
MITP reported on 2018-2021, showing the industry’s continued expansion.
- MITP now has 1130 residents, 3.5 more than registered in its launch year.
- 192 of the residents are companies with foreign investments from 38 countries, including the U.S., Romania, Germany, Italy, the UK, and the Netherlands.
- MITP’s residents generated 6.9 Billion MDL ($345M) in 2021 – a 37% increase over 2020. Projections for 2022 are optimistic, despite resident firms’ economic challenges, with estimates for resident turnover in 2022 between 7.6 and 9.5 Billion MDL.
- Since MITP’s creation, the IT industry’s share of GDP has increased. Thus, the IT industry’s share of the country’s GDP was 2.5% in 2017 and increased to 4.0% in 2021. . The value of exports amounts to 5.8 billion MDL, a 47% increase over the previous year.
- MITP’s resident companies employ over 15,000 people, whose average monthly salary (36,000 MDL / 1,850 USD) has increased 29% since 2020.
What are current problems rocking IT progression?
Moldova Innovation Technology Park (MITP) acknowledges the need to develop study programs that reflect current industry needs. As the country is experiencing a talent shortage, the Park supports initiatives aimed at diversifying the curriculum of universities.
The lack of varied educational programs has become a challenge, as other countries also struggle with tech talent shortages. Currently the employee turnover reaches 30% per year.
Not only is the country struggling with brain drain, as the population migrates for better opportunities, but it has to contend with foreign firms employing skilled specialists remotely, having more attractive compensation schemes, and the freedom of “work from anywhere.”
How is MITP addressing the sector problems?
Moldova Innovation Technology Park has put together a strategy to attract foreign business by adapting to the current offer and demands on the employment market. The IT Visa program facilitates a faster and simplified process for tech experts to relocate to Moldova, while the time it takes to open a company in Moldova takes a maximum of 72 hours.
In order to boost the current experience and theoretical knowledge, MITP has partnered with USAID and Sweden to develop educational programs that support re-skilling and up-skilling.
An ongoing flagship program led by Moldova Innovation Technology Park (MITP) is the UC Berkeley Executive Education Product Management Studio Course, launched in July 2022, and held for the first group of 46 Moldovan tech CEOs and startups. This course is an opportunity for Moldova’s digital sector to develop high-value-added products.
What were the deductions from the event speakers?
The event concluded with speakers’ presentations, acknowledging that the IT industry’s growth is only sustainable with a highly skilled workforce and graduates entering the field.
FTA university partnerships and workforce expert Michelle Iliev spoke about FTA’s tech education initiatives, including developing three new bachelor’s programs in new media, animation, and game design, set to be launched in the next academic year. Aleksander Lukichev, Head of Unreal Engine Global Education CIS, spoke about the importance of education – industry linkages in the rapidly changing and growing area of game design.
Finally, Dumitru Ciorbă, Dean of the Technical University of Moldova, spoke about the University’s cooperation with the IT sector, and the evolving state of IT education.
This focus on education gave MITP residents in attendance a new perspective on Moldova’s education system and spurred additional connections between industry and academia.
Moldova’s tech-innovation industry has shown steady growth over the last several years. To continue that growth, incentives like the Law on IT Parks need to remain a certainty; firms need to increase the value of their products and services, and highly skilled IT experts need to keep entering the industry. FTA’s work with MITP and other industry stakeholders contributes to these ecosystem elements to ensure Moldova remains a vital producer of IT services.
