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Country watch: Latvia |
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Date: 05.01.2004
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Categories: country
information, competition |
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Table of Contents
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General Information
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Key business indicators
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IT sector
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General Information |
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Location:
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 The Eastern shore of the Baltic Sea, bordered by Russia
to the East, Estonia to the North and Belarus and
Lithuania to the South |
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Official name: |
Republic
of Latvia |
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Capital: |
Riga
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Time: |
GMT
+2 |
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Currency: |
Latvian
LAT, 1 LAT = 100 santims |
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Natural Resources: |
Timber,
peat, limestone, gypsum and dolomite |
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Population: |
2.4
million |
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Unemployment : |
7.7
% of economically active inhabitants (about 1.2 million)
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Ethnic composition: |
Latvians
(majority), Livonians, Russians, Belarussians, Ukrainians,
Poles |
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Language: |
Latvian
(official), other languages spoken: Russian, English,
German |
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Religions: |
Evangelic
Lutheran, Roman Catholic, Russian Orthodox
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More information: |
:
CIA World Fact book
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The Latvia Institute
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Key business Indicators
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Indicator |
2000
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2001
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2002 |
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GDP
(Gross Domestic Product) increase in % |
6.8
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7.7
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5.0
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CPI
(Consumer Price Index) increase in % |
2.6
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2.5
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2.0
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Unemployment
rate, in % |
7.8
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7.7
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7.7
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Exchange
rate to USD |
0.606
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0.628
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0.615
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Exchange
rate to EURO |
0.560
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0.563
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0.580
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GDP distribution:
4% - Agriculture : 19% - Industry : 70% - Services
: 4.6% - IT sector : |
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Key export and
import partners: Germany, Lithuania, Russia, Finland, Sweden,
UK |
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Taxation:
corporate income tax rate is 15%. Large-scale investment projects,
enterprises manufacturing high-tech hardware and software products,
enterprises operating within special economic zones and small
enterprises enjoy corporate income tax relief . The property
tax rate as of 1 January 2002 is 1.5% of the book value. Other
exemptions for foreign investors are: VAT and customs duties
exemptions on fixed assets imported as long-term investments. |
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Average (gross)
salaries: salaries differ from region to region in Latvia.
Nevertheless the average gross monthly salaries are between
EUR 211 - 343 |
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The IT sector in Latvia
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Software industry growth: 15% annually,
0.5% of the GDP |
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Labor costs in the IT sector:
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Director of a medium sized
company |
EUR |
3100 |
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Top management |
EUR |
2000 |
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Team leader |
EUR |
1400 |
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Network administrator
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EUR |
800 |
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Programmer/analyst
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EUR |
1000 |
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Call center operator
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EUR |
400 |
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Annual IT education
output: Electronics and Automation - 3300 ::
Computer science - 5900 |
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Additional information
sources:
Baltic IS Cluster
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Sector development
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The public sector plays a significant role
in the IT sector development while competition is growing in
the domestic market. Latvia's IT
capabilities already gained
some recognition abroad. A few of the largest companies merged
with global corporations. Such examples are Tieto Konts which
was completely integrated into the
TietoEnator corporation. SWH Tehnloiija become Exigen Latvia,
the business management and client support center for Eastern
Europe within the
Exigen Group. IBM, Oracle, Microsoft also strengthening
their positions in Latvia. Other foreign companies are participating
in major e-government projects s well.
According to Deloitte & Touche a few local
companies - such as
Ankravs (only in Latvian) and
Lursoft IT are among the fastest growing technology companies
in Eastern Europe. Their web presence definitely does not reflect
fast growing technology companies though. |
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Value proposition
of the Latvian IT sector |
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Latvia is one of the fastest
growing economies in Europe. |
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The economic and political
conditions are predictable and stable. Latvia joins the
EU in May 1 2004. |
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Business friendly
incentives and regulations provide an attractive business
environment |
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Easy access to the
EU, Russian, CIS and Central-, Eastern European markets |
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Experience in the
latest (Internet) technologies, software architecture
design and testing and R & D |
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Skilled, highly educated
and experienced human resources |
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Project management
skills and experiences |
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Business domain knowledge
and technology expertise |
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Western business culture |
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Key focus areas
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Implementation of
standard software solutions: SAP, ORACLE |
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Application development
services, outsourcing and subcontracting |
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Data centers |
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CRM, HRM, ERP |
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Business intelligence
solutions |
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Localisation |
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Vertical market
focus |
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Telecommunications |
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Finance |
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Banking |
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Transportation |
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Health care |
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Government and public
sector |
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The Baltic IS
Cluster |
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The IS Cluster was formed in 2001 with the
aim to: |
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promote collaboration
among local IT companies |
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promote IT sector
capacities and capabilities |
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increase competitiveness |
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boost export to USD 0.5
- 1 billion per annum |
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The Cluster has about 20 members. The export
turnover of the member companies reached to EURO 27 million
in 2002. The leading export markets are the USA and Europe.
62% of the turnover has been realised in the Baltic States,
22% in the USA, 12% Europe. Export to Europe expanded nearly
90% in 2002. |
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