 |
|
ICT
The ICT sector in Latvia has grown rapidly over the past 5 years, exceeding the growth rates seen in Europe.
In 2007, the turnover of ICT enterprises increased rapidly with a growth rate of more than 20%. This is partly due to the number of enterprises actively involved in ICT increasing by 6%.
In 2008 the turnover of ICT enterprises as well as the number of employees working in the ICT sector decreased by 1.3% and by 3% respectively.
Turnover of Enterprises by ICT Activity (mln EUR)
Source: Central Statistical Bureau of Latvia, 2010
The recent growth of the ICT sector is strongly founded on ICT service activities which make up 96.5% of turnover for the whole industry.
Investments have also increased into ICT and currently constitute 4% of total foreign direct investment (FDI) stock in Latvia at the end of 2009. The majority of investments have been market, competence and cost driven.
Major Foreign Investments in Latvian ICT sector
Tilts Communications A/S ( | Acquisition of the national fixed telecommunications, IT & IS provider Lattelecom |
BITE Lietuva UAB (Lithuania) | Mobile communications |
Tele 2 Aktiebolag ( | Acquisition of a locally-established mobile operator; mobile & fixed telecoms, internet services |
Telia Aktiebolag ( | Shares in the mobile market leader; internet & data networking services |
Microsoft ( | Sales and customer service |
Accenture ( | |
TietoEnator Financial Solutions (Finland/Sweden) | Acquisition of a Latvian software house; software development of banking solutions and POC/POS systems |
Source: Lursoft, LIAA, 2009
ICT Infrastructure
Within Latvia’s accession into European Union, the entire electronic communications sector was opened up to competition in January 2003. Lattelecom is the most experienced electronic communications operator in Latvia, providing fixed telecommunications, data transmission, Internet and contact centre services, as well as integrated telecommunications and IT solutions, and business-process-outsourcing services.
At the end of 2007, the number of mobile telephone subscribers in Latvia was 1.9 million or 84.8% of the population. Mobile operators have established, and are operating, nationwide mobile networks which cover 99% of the country; more than 98% of the population has access to mobile services at their place of residence.
Mobile communication services in Latvia are provided by “LMT”, “TELE 2”, “Bite Latvija”, “Triatel”, “Lattelecom”, “Baltcom”, “PMT”, as well as distributors of pre-paid cards “ZETCOM”.
Mobile operators offer an extensive range of data transmission services – high-speed GPRS data transmission, MMS and next-generation UMTS services.
WAP is a common service provided by all Latvian mobile operators and on-line media. Internet services, ranging from simple dial-up or radio link, to leased-line connections. International connections are provided by high capacity broadband optical network links to Estonia, Lithuania, Russia and Sweden.
Total international ISP internet capacity has grown more than tenfold during the last three years and continued rapid growth is forecast for the next few years.
Innovation and R&D
The European Innovation Scoreboard report of 2006 shows that Latvia has achieved progress in the sphere of innovation development, especially in increasing employment in mid- and high-technology manufacturing, investment in ICT, the aggregate number of students, as well as with the number of lifelong education programmes.
In the sphere of higher education, the Ministry of Education and Science continues to support the optimization of studies within budget resources by increasing the number of students in physical and engineering sciences. A national programme has been developed to ensure that the quality of teaching in the physical and engineering sciences is improved. This will ensure that study programmes are modernized, qualifications of lecturers raised, premises in higher education institutions renovated and implementation of doctoral programmes supported. More than 6000 students are studying in the ICT sector, and 123 are postgraduate (Doctor’s degree) students.
The most successful Latvian companies operating in the ICT and electronics sectors are those that have already been able to integrate into the global production network through a combination of technology transfers and their own R&D efforts. These companies have benefited from the import of materials and equipment (Siemens and ABB), training (Exigen Latvia, MicroLink Latvia), or customer networks (IT Alise, DATI, Exigen Latvia).
Latvian company SAF Tehnika develops and produces digital microwave radio equipment. Since being founded in 1999, it has achieved remarkable success in the global market, exporting more than 90% of its production to more than 60 countries around the world. BSNL, MTNL (India), PCTL (Pakistan), Vimpelcom, Tele2, Golden Telecom (Russia), Intertelceom (Ukraine), Impsat (Latin America), Telcom Kenya and Telcom Somalia are among the mobile operators who have chosen SAF Tehnika to supply high-reliability wireless backhaul solutions in their networks.
In 2008 SAF Tehnika has successfully realized one of its projects: developed a new SAF CFIP product line. SAF CFIP is a microwave radio system with Ethernet as the primary traffic interface and enhanced data transmission capacity - up to 100Mbps. The new product line is a perfect building block for any modern future proof wireless network, including mobile service providers, fixed data service operators, enterprise customers, municipal and governmental networks among all others.
Competencies and customers
The main areas of specialisation for Latvian enterprises are software development and re-engineering, information system design, development and implementation, the introduction of enterprise resource planning systems, implementation of state-of-the-art Internet B2B solutions, development of computerised software tools, development of payment card systems, and localisation of imported software.
Average turnover and profit per employee in the Latvian software industry significantly exceeds the averages for the overall Latvian economy. More than 70% of companies in the sector operate with high added-value, especially in software development, training services, integration services and consultancy.
As a result of Latvian businesses being able to offer world level quality, the amount of nearshore and offshore services have increased recently. Latvian companies providing software development and business process outsourcing to various well-known brand name companies, as well as banks and financial institutions.
For example, CMMI Level 5 certified company Exigen Group has long term partnership with International Business Machines or IBM and since 1999 is among 3 places in the world (among Austin in USA and Bangalore in India) providing maintenance of the IBM operational system OS/2.
Company providing business process outsourcing for Prudential, Citizens Bank, Westpac Australia’s First Bank, AmSouth Bank, Bank of the West, HSBC and many others.
Company has the largest IT resource in the Baltics with over 600 employees skilled in application development, maintenance and operations.
Sector Exports
As a result of Latvian businesses being able to offer world-level quality and lower costs, the value of "near-shore" and offshore services have increased over recent years. The largest and most dynamic export-oriented ICT companies, and those that offer global services to 80% of the ICT market in Latvia, are IS Cluster members. Exports of software services have increased to the other Baltic States, to EU and CIS countries, and to the United States.
The major markets for IT goods are the Baltic countries – Estonia and Lithuania, followed by Sweden, Finland, the Netherlands, Germany, Russia and the United States.
Exports by Products Group, 2008.JPG)
Source: Central Statistical Bureau of Latvia, 2010
Sector Advantages
- Latvia provides substantial competitive advantages to ICT investors, as the following factors clearly demonstrate:favourable geographic location
- availability of highly skilled ICT professionals with international project experience (including project management), good language skills and a combination of western-style working culture with knowledge of the Russian market
- highly developed communications and logistics infrastructure
- a high level of government support and attractive taxation policy
Additional Information - http://www.likta.lv/ – Latvian Information Technology and Telecommunications Association
- http://www.lia.lv/ – Latvian Internet Association
- http://www.itnet.lv/ – Association of Computer Technologies of Latvia
- http://www.bsa.lv/ – Business Software Alliance
- http://www.is.lv/ – Latvian IT Cluster
