Romanian IT&C Sector Affected Unevenly By Crisis, Some Areas Posted Growth - Study

"The range of activities, local conditions, focus on services and production for export, as well as the ability to attract investments from large foreign IT companies has made some areas post smaller contractions or even grow," said Mircea Vuici, the study's coordinator, in a press release.

According to the study, Bucharest remains the IT industry's main pillar, with over 67% of the total country turnover, 56% of staff and more than 60% of the sector's contribution to the gross domestic product. Its share has a tendency to shrink, however, by as much as ten points in two years, in favor of the north-west region, owing mainly to the Nokia factory in Cluj County.

The recession has not brought about significant changes in the geographical distribution of business, as far as the IT service and software segment is concerned, but the study does show that several counties have done better than Bucharest. In the capital, the segment contracted by 9% in the crisis' first year, close to the sector average, while business grew by 13% in Timisoara and decreases did not exceed 6% in Cluj, Brasov, Sibiu, Dolj or Valcea.

On the telecom segment, the turnover of Bucharest-based companies shrunk by 13.5%, but the city still accounted for most of the business, with a 92.5% share. Other areas, such as Brasov, Prahova, Covasna and Cluj, were not as affected, contracting by less than 10%, while in other counties, such as Iasi, Constanta and Ilfov, losses exceeded the average.

The hardware and electronics segment saw the most apparent changes in geographical distribution. While Cluj County remained in the lead, with 100% growth and making up more than half the domestic production, the counties Bihor, Timis and Brasov stood at the previous year's level, while the crash of Bucharest's larger retailers meant a 67% contraction.

The crisis' effects on Romania's IT&C sector are also borne out by the list of companies in a state of insolvency, bankruptcy, voluntary dissolution, liquidation or temporary suspension of activity at the end of 2010, says the study. Bucharest tops the list, followed by the counties Cluj, Brasov, Timis and Iasi.

Although the affected companies make up more than 30% of the total number of firms, most of them are micro-enterprises with a low share of the domestic turnover, with the exception of regions which saw the insolvency or bankruptcy of large companies - Bucharest, Constanta, Galati and Ilfov.

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