According to the latest edition of Emerging Europe’s report, Future of IT, Estonia has surpassed Poland as the most competitive IT industry in Central and Eastern Europe and Central Asia. The Czech republic rounds out the top three countries.

Kosovo, on the other hand, improved the most, moving up nine spots to tenth place, while Hungary dropped the most, dropping six spots to ninth place. Bosnia and Herzegovina has the region’s least competitive IT sector.

Estonia leads emerging Europe in 13 out of 47 variables, while ranking in the top three in seven of the parameters. It also led in “business environment,” one of the four broad categories.

Estonia is well-placed to set the pace

Andrew Wrobel, a founding partner at Emerging Europe and co-author of the report, said that Estonia is without a doubt a major tech country with a robust existing pool of talent and a great forecast for its future.

He added that almost 5% of the Estonian workforce is employed in the IT sector (the highest rate in the region), with the second-highest number of ICT students per 100,000 people and incredible performances in PISA mathematics tests, combined with competent command of the English language.

The competition is tough

Wrobel says that it’s not just talent Estonia has, but a great business environment suited to enable the sector’s growth and the third strongest infrastructure, all of which led to it leading this year.

Meanwhile, Kosovo topped talent, Lithuania topped IT infrastructure, and Azerbaijan led in economic impact (which looks at cost-effectiveness and resilience to impactful changes like the pandemic).

The research reveals how critical the IT industry has become for nearly all countries in the area. In 2020, the developing European area recorded more than 159 billion euros in IT services, up 40% from 2016.