Selecting the best region for nearshore product development can be challenging. As a company that specializes in building product development teams in Eastern Europe and Latin America, we can say that a variety of factors may influence your choice of country, including the availability of skills, time zone, rates, English proficiency of developers, and more. We put together this research to show you the opportunities awaiting you in the most popular destinations for product development nearshoring, such as Eastern Europe and Latin America (LATAM). Let’s begin.
Nearshore software product development: Eastern Europe
Providing a reasonable quality to price ratio, Eastern Europe has a reputation as an IT outsourcing oasis on a global scale. The biggest beneficiaries of this region as a nearshoring hub include most of Western Europe with an emphasis on Germany, Norway, Denmark, Sweden, the UK, the Netherlands, or any other country located in Western Europe. The largest hubs for nearshore product development worth mentioning in Eastern Europe are:
Overall Eastern Europe has approximately 1 million software developers. Let’s review nearshore product development opportunities in this region in more detail.
Software development skills
The driving force of nearshore software product development in this region is its educated workforce. A reputable QS World University Ranking in 2022 shows that 63 out of 468 top European universities are based in Eastern Europe, which guarantees European-quality education in many fields, including STEM disciplines. Overall, the region produces up to 60,000 IT graduations annually according to data from Eurostat, including all countries mentioned in our review. It’s worth mentioning that 95% of engineers at nCube are university degree holders who are successfully taking up nearshore product development opportunities for our European clients. The rest 5% are experienced engineers without formal education in Computer Science.
The difference in time zone between Eastern Europe and Western Europe is inconsequential, ranging from 2 to 3 hours ahead, allowing for a solid time window for real-time collaboration. That's why nearshore product development in this region guarantees full alignment between your nearshore and in-house units working on your product. That’s one of the key reasons to choose Eastern Europe for product development nearshoring if you’re based in Western Europe.
According to Accelerance, nearshore product development rates in Eastern Europe vary from $21 to $118 per hour, minus vendor’s fees. Some countries are more affordable than others: For lower rates, it’s best to look for opportunities in Ukraine, Moldova, Romania, and Bulgaria, whereas Czechia, Hungary, and Poland have a higher cost of living, which significantly affects the pricing.
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English proficiency level
According to EF English Proficiency Index, countries in Eastern Europe boast the following English levels:
- Ukraine: intermediate
- Poland: advanced
- Czechia: advanced
- Hungary: advanced
- Bulgaria: advanced
- Romania: advanced
- Moldova: intermediate
Developers from this region are generally comfortable with the English language, given that most of them have vast experience working in a multi-cultural, English-speaking environment. The best cities to look for developers with profound skills in English are Budapest (Hungary), Warsaw (Poland), and Kyiv (Ukraine).
READ ALSO: Top Tech Hubs in Eastern Europe
Where can you nearshore software development in Europe?
When you plan to nearshore in Europe, several destinations come to mind. Let's review some of the common countries that are popular for IT nearshoring in Europe.
Ukraine. The leading nearshore software development in Eastern Europe, the country stays strong as a tech hub despite the war. With nearly 300,000 software developers involved on the IT nearshoring scene in Europe, Ukraine offers access to the second-largest pool of technologists in Eastern Europe. Moreover, the country offers lucrative developer rates coupled with strong technical expertise, especially in such areas as Healthcare, Fintech, Automotive, Telecom, e-Commerce, and more.
Poland. One of the major advantages of this destination for nearshoring in Europe is its compliance with European laws and regulations. Poland also offers a favorable time zone for collaboration with European-based teams. Other notable benefits include a solid IT infrastructure and a focus on tech education.
Romania. Another hotspot of nearshoring software development in Eastern Europe, Romania is close enough to Western Europe to offer hassle-free nearshore collaboration. It's also a formidable competitor of Ukraine when it comes to the rates of software developers. The core focus of Romanian developers lies in Fintech, Healthcare, and e-Commerce.
Portugal. This popular nearshore software development in Europe offers strategic geolocation, especially for UK-based companies. With the potential for innovation, software developers in Portugal are skilled at digital transformation, web and mobile development, as well as AI and ML technologies.
These locations for nearshore in Europe are just a few examples where you can farm out your software development activities. Now, let's shift our focus to another prominent region on the other side of the world: Latin America.
Product development nearshoring: Latin America
Opportunities to find a solid partner for product development nearshoring in LATAM abound – all thanks to a growing pool of software developers that occurred in recent years. As a strong player in nearshoring, the region combines affordability and ultimate geographic proximity to the US, which makes it a meeting point for US organizations and vendors of nearshore product development.
LATAM's nearshoring hotspots are:
The pool of IT talent in these countries is estimated at approximately 1 million, and Brazil alone accounts for half of this number. Let’s take a closer look at what LATAM has to offer to a tech leader looking for a provider of nearshore product development.
Software development skills
The IT labor market in LATAM is in bloom thanks to the solid IT sector, vibrant startup culture, and newly emerging tech education initiatives.
If we take a closer look at different reports, such as Coursera’s Global Skill Report, Global Innovation Index, and SkillValue Ranking of developers’ skills, we’ll see that Brazil, Argentina, and Mexico are ranked highly when it comes to tech and innovation skills.
- Software development specialists from Argentina are highly skilled in such fields as computer programming, mobile development, and Cloud computing. They are also deemed as highly skilled professionals in such technologies as Python, SQL, and Java.
- Developers from Mexico are ranked second in the ranking of the best software programmers and developers globally. Mexico has earned top scores in such fields as data analysis, mobile development, operating systems, and statistical programming. Mexican developers also come as number one in the world for their Python and C/C++ skills. Also, Mexico takes second place among Latin American countries when it comes to embracing the most recent global innovation trends.
The World’s top universities ranking reports that 151 out of 1300 top universities globally are scattered across LATAM. The number of IT graduates is on the rise in all countries we review:
- Mexico generates 110,000 engineers graduate annually;
- Argentina produces 100,000 graduates pursuing computer science and related disciplines;
- Brazil is number one in terms of STEM graduates per year: 227,000 fresh IT specialists join the market each year.
The Best Global Universities ranking shows that 6 Mexican universities enter the top 50 in Latin America, whereas Argentina has 3 universities in the same rating. Brazil boasts 123 institutes of science and 6 Brazilian universities belong to the top 500 universities in the world.
With such a focus on high-quality tech education, Latin American software engineers are graduating with top skills and are ready to join nearshore software product development ventures in the USA.
The overlapping time zones enable the two sides of the nearshore product development partnership to boost real-time collaboration.
Mexico is in the same time zone as the USA, which guarantees the teams may have up to 8 hours of overlap. It’s highly beneficial to work during regular hours, especially when it comes to daily meetings.
Brazil and Argentina are located in the same time zone as EST (GMT-3), which means that businesses located in this part of the US can enjoy real-time collaboration, while the rest of the States can share up to 7-5 hours of their regular work hours.
Accelerance’s report shows that in Latin America the cost of nearshore software product development ranges between $28-$105 per hour, without vendor’s fees. According to Clutch, the rates for an hour of developer’s work are higher in Brazil than in Mexico and Argentina.
English proficiency level
According to the EF English Proficiency Index, Argentina stands out with an advanced English proficiency level among the three countries, whereas Mexico and Brazil score a mid-level proficiency level.
- Brazil: mid-level proficiency
- Mexico: mid-level proficiency
- Argentina: advanced proficiency
It means that you have higher chances to find developers who speak English more fluently in Argentina than in Mexico and Brazil. However, Mexican and Brazilian developers tend to have solid communication skills and the capacity to forge strong relationships with US-based companies despite their mid-level English proficiency. If you hire for an advanced level of English, it’s best to search for candidates in Argentina.
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Whether you select Eastern Europe or Latin America, building a stable nearshore product development unit can be a tall order, especially for companies without experience in managing distributed product teams. That’s why you should focus on selecting a reliable vendor who will help you get the most out of the talent pools in the country of your choice.
We at nCube will be happy to guide you in your nearshore software product development journey by helping you build a skilled, experienced, and sustainable team in Eastern Europe and Latin America. Contact us and let’s discuss your product development needs.