Business in Eastern Europe?

A

Thread Starter

AM

Hi
-I am considering going solo in Industrial automation so I would like to hear on skills/practices you do to win automation projects(not detailed secrets but general stuff including how slick you need to be)?
-How profitable is Industrial automation compared to business automation (database design) anyway, in terms of job availability and profit per job?
-What is the market prospective in EE countries undergoing privatization - for example are the new factory owners in Hungary and Bulgaria , usually foreigners, eager to invest in production in the businesses they bought or it could be said that they are just bying the market for their already oversized production capacities?
 
I would not expect to make a go of it unless you
already had friends. Language, business practices
and law are pretty much not available.
 
B

Bob Peterson

I would say you are correct about Bulgaria. My understanding is it is as bad as Romania or Russia to do business in. OTOH - reportedly Hungary is not that bad. No worse than Poland. Those countries in Eastern Europe that have supported the free market concept have progressed while those that have not done so are still mired in economic messes.

From what I have heard, English is commonly spoken in Hungary, but not in
Bulgaria, so language may not be as big an issue in Hungary. However, it is always a good idea to speak the language of the locals. A language immersion class can get you speaking well enough in a few months that you can get by. Well worth the investment.

Friends are always nice, even in developed countries. Its tough to want to work in places like China, Romania, or Russia where the legal system just does not enforce contract law at all. Make sure you get paid in advance if you do work there, or find someone you trust to guarantee payment, because there is no legal process in place that allows you to enforce payment. In many of these countries even a bank guarantee or letter of credit is worthless because it cannot be enforced. if you accept an LC for payment, it should be on a trustworthy bank such as US, or EU. British banks are reportedly the best to handle this type of arrangement.

Bob Peterson
 
B

Bob Peterson

I copied my brother my take on this subject. I thought you might want to read his (somewhat long winded) reply. He is an economist who has specialized of late in helping the former Commie countries of Eastern Europe try to privatize their electric utilities. Here is what he had to say. Sadly, as you can see from some of his commnets, he has a bit of a socialist bent to him. We are all hoping that a few years in the real world will cure that

The legal systems in all of Eastern Europe are difficult and can be unhelpful, although Hungry, Poland, the CR, and Slovenia seem to be farther along than others. (that does not mean that theoretically they do not enforce contract law, but they simply do not have enough. qualified judges to implement laws as we do in the west.) I would, however, add that these countries are mired in their own messes that have little to do with whether their governments are ideologically left wing or right wing. In fact, the countries that have stated policies of free markets at any cost are the ones that are probably the worst off (many have backed away from those policies in recent years). Those that are more moderate, such as the Czech Republic, Slovenia, etc. are more likely to be good for business. Ukraine, Belarus and Moldova should be eyed with extreme skepticism. As for the language, business people in all countries speak English or German (and generally relatively fluently), educated people under the age of 30ish generally speak English. Good translators (simultaneous) are not cheap, fair translators (sequential) can be reasonably cheap. Privatization has not gone well in any of the countries, as a general matter. There are specific exceptions to that rule. Factor owners are generally interested in exploiting cheap labor and not introducing new technologies (although there are exceptions to that rule as well.) This is generally due to the fact that most industries in Eastern Europe were seized wrong under the previous regime and therefore suffer from the lack of economies of scale (this also partially explains why privatization has not gone well). This is especially true in the high capital intensive industries such as steel, autos, oil, chemicals, etc. In general the education systems are extremely good, especially in Romania and the former Soviet Union. There are many extremely bright and well educated workers who are interested in working for western firms. Engineers are in plentiful supply as the previous regimes concentrated most of their education efforts on technical skills as the central planners thought all other skills irrelevant for production. This, of course, means that other professionals, e.g., lawyers, accountants, mangers, etc. are generally substandard. It is advised that for such work western firms be utilized. There are many qualified western professional firms in Vienna, Budapest, and Warsaw (even London and Prague). Local customs are important, but not critical. Americans are revered in more "right wing" states (Romania, Bulgaria, Albania, etc), but less so in the more westernized states (Poland, Hungry, Czech Rep, Slovenia, etc.). The caricature of the "ugly" American can be difficult to shake with some folks, especially the higher educated.

As for automation markets, one would likely want to target those industries that take advantage of a nation's comparative advantage, e.g., sun flower/olive oil in the southern Balkans, small manufacturing in Romania, etc.. Stay away from those industries that are sub scale. Further, be extremely careful in the new states of the EU. The EU directives (on anything from worker safety to business codes of conduct) will begin to apply and tariff protection will begin to be eliminated. Many of the industries in the new EU states have not made it up the learning curve and are extremely vulnerable to western European firms.

USAID can be helpful. Most mission directors are willing to meet with US businesses, especially if investment is at issue. These people generally have good contacts within the various ministries and can, at a minimum, help to put some force behind your projects.
 
If you want do bussiness at EE, find local small bussinesman and work just as supplier. EE has plenty automation specialist.
 
A

Alex Miterin

Hello AM,
You are asking three questions in the short message.
First, as I understood, you are planning switch from DBA to the Controls. It will be difficult for you to do this, because hardware involved also. To build automation systems knowledge of the hardware is necessary. Also you need some experience in the Electrical Engineering field. I understand, that is hard time for the pure programmers now. If you want to change your profession, you need time and proper education.
Second, it is hard to say, how yours future business will be profitable. Industrial automation project this is not only SCADA or HMI integration. Profit dependable form project to projects and related to yours goals. If you want to stay in business in particular area for longest time as you can, you have to establish service and training etc. If you making just one project, make job, take the money and run. In this case you will have max profit and no investments, and no further projects. But I never saw people who growing garden to eat just one apple.
Third, if you planning to make business in EE or CIS, there are some specifics. I agreed with others about all topics. However it looks to me, all guys who replied -never ever have been in EE or CIS or visited these countries like tourists. If you would like to know more, here is my e-mail: [email protected]. If you still planning to do such business, or know somebody who want to establish business there, let me know, please.
 
Hello there,

I am a SME owner from Lithuania doing my money on consulting people from West Europe from furniture mainly. My advice is find a man from inside here and stop worrying abot the law and things like that. All you need is coming for 2 days and looking arround. There are plenty of opportunities over-here.
 
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