NCPA - National Center for Policy Analysis


June 6, 2008

During the last decade, the region that has seen the greatest economic growth is not Asia; in fact, Central and Eastern Europe have grown more rapidly, says Steve Ballmer, chief executive of Microsoft.

What accounts for the region's outstanding -- if somewhat overlooked -- success?

  • The region's Communist legacy left behind a strong educational infrastructure that emphasizes math and science, and includes world-class technical schools and universities, which enables the region to produce large numbers of engineers, researchers and scientists.
  • Every year Russia graduates as many science and technology specialists as India, even though its population is one-eighth the size of India's.

For the region to truly emerge as a major contributor to technological progress, though, there are critical issues that it must address, says Balmer:

  • One is the looming shortfall of people with adequate information technology (IT) skills; the research firm IDC estimates that there are only enough trained professionals to fill half of the 700,000 IT jobs that will be created in the region between 2007 and 2011.
  • The private sector also has an important role to play; public-private partnerships that combine government agencies' knowledge of local communities with private sector business and expertise will make it possible to reach more people with greater speed.
  • The most critical issue is intellectual property protection; despite signs of progress -- in Russia, the share of installed software that's pirated fell by 7 percentage points from 2004 to 2006, for example -- the regional software piracy rate of 68 percent is still the highest in the world.

Ultimately, homegrown talent is the key to the region's hopes of establishing itself as a global innovation hub.  Long-term success will depend on whether governments in Central and Eastern Europe can take the necessary steps to train and retain the wealth of talent that the region already possesses, says Ballmer.

Source: Steve Ballmer, "Bridging the Fulda Skills Gap," Wall Street Journal, June 5, 2008.

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