Is Cluj Europe’s Silicon Valley?

In 2000, Romania was swept up in the dot com boom. While this could be said for the majority of European countries, Romania was already in a period of positive flux, with discussions about the country’s entry into the EU creating a sense of prosperity and business opportunity.

Recognising the potential of the IT sector, Romanian authorities placed the requirements of tech organisations at the heart of their plans for the city, and made a strategic investment in an internet infrastructure able to successfully support high-growth tech firms.

With a solid infrastructure in place, and the city’s 11 universities quickly developing the technical and computing skills to take advantage of it, it was only a matter of time before Cluj caught the attention of the global tech community. Wanting to provide a consistent experience to clients, global tech companies began to look to Cluj as a potential outpost. This was attractive from a practical, time zone perspective, but also financially, as competition for talent in the young market was relatively low.

These factors meant that Cluj quickly gained a reputation for IT outsourcing excellence. Lucrative operations and a significant local client base meant that many companies, such as Thomsons Online Benefits, the firm I work for now, began to house other functions in the city, including software design and development roles. This in turn gave Romanians working in tech new project management experience and in many ways heralded the next phase of market development.

While Cluj’s tech community were proactive in driving the city’s transition from outsourcing outpost to independent market, this was also a necessary evolution. The market’s rapid maturity meant that by the beginning of this decade it was already losing its competitive edge on labour costs to countries such as Russia and Ukraine. It was therefore imperative that Cluj-based companies brought value to their clients through its home-grown talent and the expertise they could offer. Throughout the sector’s evolution, the government has continued to support IT growth through policy. Those working in IT for example, don’t pay any tax on their salaries, and neither do their employers. Meanwhile, government led initiatives have continued to multiply the opportunities for those in the IT industry.

Cluj Innovation City is perhaps the most notable example. Set to be a highly modern complex, the City is being built to encourage science and technology companies from Romania and abroad, including Bosch, SAP, and Siemens, to establish research and operations facilities in Cluj. Similar to Silicon Valley in LA or Silicon roundabout in London, city authorities hope that the high concentration of forward thinking companies will drive innovation in the sector. Besides direct government support, the tech sector in Cluj thrives on a rich supply of talent.

The abundance of universities in the city draws students from across Romania and internationally, so that out of a city population of a little under 400,000, more than 100,000 are students. 10 per cent of these students qualify for IT related subjects, but even before they transition to full-time employment, the wealth of opportunities in the sector mean that many are already working, gaining industry experience and a head-start on their international peers. There’s a strong culture of working hard but also having fun at work. It’s standard in IT to puzzle for a long period of time over a complex task, but taking a break and being distracted is important for productivity and innovation.

While tech companies around the world boast office pool tables, hammocks and creativity walls – there’s something about the enthusiasm and courage of tech organisations in Cluj that sets them apart. It’s an attitude Thomsons Online Benefits has huge belief in, and why the company set up its training academy in Cluj - so that all employees can be on-boarded within this atmosphere.

Now that Cluj is reputedly ‘Europe’s Silicon Valley’, you could assume that the city has achieved all its ambitions. However, to relax now would be counterintuitive – and deny a work ethic that’s taken us this far.

Continued growth will depend on innovation, and with the number and calibre of tech professionals working in Cluj, it’s surely only a matter of time before we see the next Google or Apple emerge from Cluj Innovation City.

Andrei Pantelimon, General Manager at Thomsons Online Benefits in Cluj

Image source: Shutterstock/ Mihai-Bogdan Lazar