Latvia has experienced a lot of reforms in the Information Technology (IT) sector. From its beginnings as a simple local IT development project to its current status as a thriving information and technology center, Latvia’s very own story of innovations, adaptations, and growth is quite an interesting one.
It all began at the end of the 20th century after the collapse of the Soviet Union. When Latvia reclaimed its independence, the country began the process of economic and technological changes. The revolution of the centralized planning economy to a market-oriented one has opened the way for the birth of the IT industry.
The initial years of the plan were dedicated to laying the foundation for the development of infrastructure, as well as the creation of educational institutions that could produce workforce ready in technical areas. The first academic computer science programs were being launched in universities, and consequently, a profession of highly qualified employees was practically formed. Moreover, the Government, with its foremost focus on telecommunications investment, has enhanced Latvia’s digital network’s connection to the global network.
In the late 90s, the Latvian software development went through growth. The local IT entrepreneurs were quick to take advantage of the growing demand for IT services all over the world. The ones addressing software or web designing as well as consultation in this field start to appear creating innovation and entrepreneurship.
One of the most notable reasons for this prosperity was the location of Latvia and the highly skilled workforce there. Firms with headquarters in Western Europe and North America regarded Latvia as an interesting outsourcing location because of its very
low labor costs and a great diverse talent pool. As a consequence, the IT sector gained momentum and boosted the country’s economic growth.
The early 2000s was an innovative decade in terms of investing in information and communication technology (ICT) infrastructure in Latvia. The government was aware of the necessity to upgrade the country’s telecommunication network to support the growing IT industry, connect the government and the private sector, and boost the performance of the economy.
Throughout the country, fiber-optic networks were laid down and as a result, people started getting better quality of internet and connection. Plans for digital literacy promotion and digital services were created, targeting making public services available and successful.
In addition to that, Latvia became a member of the EU in 2004 thus providing more possibilities for collaboration and investment in the IT sector. The ability to partake in EU funding programs enabled the development of new technology-based projects and research, hence strengthening Latvia’s position as regional IT champion.
In recent years, Latvia has introduced a new approach to promoting and supporting IT innovations and startups that seem to be providing positive results. Incubators, accelerators, and venture capital companies put in place the infrastructure to help entrepreneurs succeed in new businesses.
Organizations like the Startup Law, and the Latvian Startup Association are the environment that enables startups to be in a good place. These ever-expanding efforts have resulted in a lot of Latvian startups thriving in several areas such as fintech, cybersecurity, and e-commerce.
In the same way, the partnership between the state and private sectors is an amazing motivating factor for innovation. The collaboration between universities, research institutes, and industrial players has witnessed unpredictable breakthroughs and technological advancements.
Even though the IT sector in Latvia has tremendous growth, it also undoubtedly has several problems to deal with – shortage of specialists, infrastructure issues, and growing competition. On one hand, the continuing need for maintaining local talent and appealing to the international business community is an emerging issue for the authorities and stakeholders. Nevertheless, the small size and quick business environment of Latvia create the foundations for the development of innovation and collaboration.
The IT development evolution of Latvia reveals what the country is capable of – resilience, adaptability, and vision to succeed. From its roots to its modern status as a technological developer, it is the success story of Latvia in employing technology for the economic growth and innovations it wishes to achieve.
Post by Ieva Vitenberga
