Transcript IST DEVELOPMENT IN LATVIA

IT Market Research
Report on Latvia
Tatiana Rikure
Inga Bakane
General information
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Capital: Riga (population
788,283)
Population: 2.6 Million
Total area: 64 100 sq. Km
Languages: Latvian (official)
Russian, English widely spoken
Independence: 1991
Borders with: Estonia to the
north, Russia and Belarus to
the east and Lithuania to the
south, and a maritime border
with Sweden to the west
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Ethnic composition: Latvian 58.2%, Russian 29.19%, Belarusian
3.99%, Ukrainian 2.63%, Polish 2.49%, Lithuanian 1.39%, other
2.11%
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Major religion: Christianity
Main exports: Timber and wood products, fish and fish products
President: Vaira Vike-Freiberga
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Key facts & figures
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Membership in official organizations: European Union, NATO, UN,
Council of Europe, WTO, OSCE, Council of the Baltic Sea States,
Euro-Atlantic Partnership Council.
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* Central Statistical Bureau of Latvia, www.csb.lv
Economy*:
 GDP: 11.0 billions EUR
(2004)
 GDP growth in 2004:
8.5% (average over 5
years: 6.2%)
 FDI inflow: 434 mil.
EUR (2004)
Business environment
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Latvia is one of the more advanced, fast growing
'transition' economies and has well-developed services,
transportation network and logistics. There is a welldeveloped banking system, stable political and monetary
conditions, and a favourable taxation regime (From 1
January 2002, the Latvian corporate income tax was
reduced from a flat rate of 25% to a flat rate of 22%. The
rate was 19% in 2003 and dropped to 15% from 2004).
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Latvia boasts one of the best international credit ratings in
Central and Eastern Europe. Standard & Poor's has given
Latvia an "A-minus/stable" rating, while Fitch-IBCA has
rated the economy "A-minus/positive".
Latvian promising business
sectors:
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Manufacturing (growth in 2003): 9.1%
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Food & Beverage (24.9%)
Forest & Wood (20.4%)
Machinery & Electronics (14.6%)
Metal processing (9.7%)
Textiles (9.6%)
Paper, Publishing & printing (7.6%)
Chemicals & pharmaceuticals (4.4%)
Other (8.8%)
Services(growth in 2003): 6.8%
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Trade (11.3%)
Transport & Communications (8.9%)
Real Estate & Business Services (2.3%)
Financial Operations (10.4%)
Source: Central Statistical Bureau of Latvia, 2004
Services: IT &
Telecommunications
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The IT&T industry is Latvia's fastest growing economic
sector with a yearly growth by 20 - 30 % during the last
decade.
Exports of the sector are rapidly rising in the last years,
annually growing by approximately 15%.
The industry's main asset is highly qualified human
resources with more than 8 000 graduate IT specialists
and an additional 6 000 in universities and colleges.
Key advantages of the sector: internationally competitive
human resources at all levels of expertise at very
competitive costs, highly developed telecom and data
transmission infrastructure.
Infrastructure
Penetration of ICT
PCs/100
Internet/100
Mobile Cell Phone/100
Enterprises which have
at least one computer
Enterprises with
Internet connections
2002 2005
19
33
6
25
34,2
59
51
75
36
>50
Production
THE STRUCTURE OF INFORMATION TECHNOLOGY BRANCH
IN LATVIA
IS maintenance
15,3%
Consulting
3,2%
Hardware maintenance
and repair
15,3%
Hardware
marketing
10,5%
Hardware
manufacturing
9,7%
Telecommunications
13,8%
Software
development
24,2%
Software
marketing
4%
Internet and
E-commerce services
4%
Software marketing
Hardware
marketing
Maintenance and
repair of equipment
Consultations
Maintenance of
information systems
INTENET, ecommerce services
Telecommunication
services
Software
development
Operators of
telecommunication
networks
Computer and
equipment
manufacturing
DISTRIBUTION OF
QUALIFICATION LEVELS IN IT
SECTORS
50%
45%
first level of qualification
40%
second level of qualification
35%
third level of qualification
fourth level of qualification
30%
fifth level of qualification
25%
20%
15%
10%
5%
0%
STATE FINANCING
OF RESEARCH
Molecular biology,
microbiology,
biotechnology,
virusology
7,15%
Medicine
10,60%
Biology, environment
and land
9,95%
Technology (material,
chemical, pharmacy)
4,76%
Physics,
mathematics,
astronomy
11,44%
Mechanics,
mechanical
engineering,
energetics
7,61%
Agriculture
11,14%
History
3,10% Linguistics, history of
literature, study of
folklore
4,02%
Chemistry
10,42%
Philosophy, sociology,
psychology, pedagogy
6,27%
Informatics
5,71%
Forestry
Economics, law 1,85%
5,98%
NUMBER OF STUDENTS
IN STUDY YEAR 2004/2005
Total number – 130693
 Computer science and IT students
10%
 Number of graduates 1000
 Number of PhD thesis in
mathematics and IT – 22
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DISTRIBUTION OF STUDENTS
ACCORDING TO STUDY
PROGRAMMES 2003/2004
Teacher training
and education
sciences
15%
Services
3%
Humanities and
arts
7%
Natural sciences
and art
5%
Engineering and
technologies
11%
Agriculture
2%
Social sciences
54%
Health and health
care
3%
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Despite the existing barriers to the Internet penetration in Latvia
(insufficiently developed telecom infrastructure, high Internet access
costs, etc.) its popularity increases each year.
Number of Internet users in
Latvia is growing
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In Latvia the household’s access to the Internet (7%) is lower than NAS10 average (11%), strongly lower than EU-15 average (44%) and far
behind the level of leading country Netherlands (72%). The worse figure
has only Romania (4%).
e-Work
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Seven percent of the EU-15 and nearly three percent of NAS-10 working
population are presently teleworking from home, at least part of their working
time