Spotlight on Central and Eastern Europe

There is: Although each outsourcing decision ought to be made on its own merits, the low-cost nations that once comprised the Soviet Union and its satellites should be considered, especially when the end market is Europe, the way Mexico ought to be considered when the end market is North America.

"Discussion of China versus Eastern Europe seems anachronistic to me," Charlie Wade, a senior consultant at Technology Forecasters, told the recent TFI Quarterly Forum in San Jose. "The better point of comparison is Mexico to Eastern Europe."

Wade, who conducted TFI's recent research, "Outsourcing Trends in Central and Eastern Europe: The Second Wave," presented the highlights at the Quarterly Forum.

Wade talked to 14 electronics industry executives in nine nations during a tour in October. Another 17 phone interviews with electronics executives rounded out the primary research, which builds on TFI's earlier research in Europe.

Like any region, Eastern Europe has its issues. Among them: Cost competitiveness, supply of skilled labor, corruption and protection of intellectual property, local management skills, language differences, and the regional infrastructure.

Nonetheless, Wade concludes in the report: "After analyzing the many factors that define each European country's competitiveness, it becomes apparent that Central and Eastern Europe together with the Baltic States are positioned to become the manufacturing center for the continent, serving the business and consumer markets for all of Europe."

He says the region is "poised for growth" citing such features as direct labor and facility cost lower than Western Europe, locations central to the European consumer market, a growing consumer population itself, appeal to foreign investment, government support, modification of local laws, and improving infrastructure.

For his specific recommendations for EMS companies, ODMs and OEMs, be sure to read the report. (TFI's Outsourcing Navigator can help you make sourcing decisions.)

As always, we're interested in your reactions.