Assessing Competitiveness In Moldova's Economy - Economic Growth

Development Alternatives, Inc. Moldova Competitiveness Assessment: The ICT Cluster
While market penetration rates are low, the growth trend is positive across all segments of
the communications industry. Growth rates over the past six years have been dramatic, with
some years recording more than 100 percent. As markets remain flat in Europe, Asia, and the
U.S., Moldova retains the potential for continued development of the sector. If policy reform
and liberalization proceed as expected, the communications gap between Moldova and
Europe may narrow rapidly, enabling ICT companies to continue their technological
progress.
Factor Conditions
Quality, Reliability, Specialization
There is a long history of specialization in electronics, dating from Moldova’s role in the
Soviet defense system. Whether the skill sets formerly available can be applied, or are even
present, is not clear. It is likely that after the fall of the Soviet Union, some of the most
qualified and mobile professionals left for better opportunities in other countries, especially
since many of them had been transferred to Moldova according to the aspirations of Soviet
planners. Industry insiders still maintain, however, that there is a core of skilled labor in the
market. Moldova also clearly does not lack a supply of higher education institutions or
faculty equipped to train the workforce. Using the current industry statistic of 40,000
professionals working in the ICT sector, this represents 1.14 percent of the population.
The issue of quality is a difficult one, as there are only limited measures available in the ICT
industry. Determining whether work products or services are of high quality can be a matter
of subjective judgment. There is evidence that a few companies produce enough high quality
goods and services to compete on international markets; these firms have demonstrated
meaningful results and successes. However, using industry standard measures of quality and
reliability reveal that only one company in Moldova has achieved ISO 9001 certification and
none is currently using the Capability Maturity Model (CMM) certification for process
management. Only a handful of companies are certified Microsoft or Oracle partners.
According to the MEPO report, of the 485 professionals represented in the study, only 64
individuals held any type of industry certification. As a proxy for the industry, this percentage
of certification is not particularly high.
The lack of industry certification notwithstanding, there is evidence from the MEPO study
that many companies are using best practices computing platforms, programming languages,
and data bases, such as Windows, Unix, Linux, C++ and Java, MS SQL Server, Informix, and
Oracle.
Costs
Moldovan ICT products and services compare well from a cost perspective. The very low
wage rates in the industry make Moldova very competitive on the international market.
According to the MEPO report, the average share of salaries in the total structure of costs for
custom programming is approximately 60 percent. Operational expenses are low, around 20-
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