Opening Online MarketsOverview of Trends

May 16, 2007

Skopje, Macedonia

REGIONAL COMPETITIVENESS INITIATIVE

What We’ll Cover

1. Why Online Markets?

2. New Forces Driving the Opportunity

3. Success Examples

4. Regional Activity To Date

5. Potential for New Jobs Creation

1. Why Online Markets?

Why focus on online markets for remote services (“telework”)?

• First wave of offshoring – slow turnaround, big companies (100,000+ jobs)

• Second wave – fast turnaround work via telecoms, big companies predominate (1 million+ jobs)

• Latest wave – fast turnaround, open to all (tens of millions of jobs)

1. Why Online Markets?

1. Why Online Markets?

The third wave of global ICT opportunity •

– High-end R&D – Software development, testing and maintenance services– Secretarial services– Graphic art and design services– Web-based research services– Tutoring and mentoring services– Transcription and editing services– Web page design and development– Help desks/customer support– Electronic publishing – E-learning course development– Software translation/localization– Computer-aided design/GIS– Indexing and abstracting services– Translation services– Multimedia editing and animation– Imaged claims processing– Remote security systems

2. Driving Forces

What is bringing this new kind of work within reach of jobseekers and entrepreneurs in Kosovo?

• Affordable telecoms

• “Anytime, anywhere” learning

• New online markets that are friendly to small/new firms

2. Driving Forces

Driving Force: Affordable Telecoms

• A six orders of magnitude cost reduction is underway (Nathan Myhrvold, Microsoft)

• Affordable two way satellite internet solutions are now emerging in global market

• High bandwidth, increasingly cheap wireless networks can share “always on” new internet access

QuickTime™ and aTIFF (Uncompressed) decompressor

are needed to see this picture.

QuickTime™ and aTIFF (Uncompressed) decompressor

are needed to see this picture.

2. Driving Forces

• Old way: structured, classroom-based learning – was fine for

unchanging content• New ways are needed to be competitive today:

– “anytime, anywhere” learning– Scenario-based learning and simulations– Engaging/interesting content to hold audience

Driving Force: “Anytime, Anywhere” Learning

2. Driving Forces

Driving Force: eBay-style markets for sourcing of “remote services”

3. Success Examples

Perspectives from Rentacoder’s Founder

3. Success Examples

Name: Serhan D. KiymazAge: 30Location:Istanbul, Turkey

Screen Name: Serotizm

In 2002, I have lost my own company after an economic crisis in Turkey. After that I worked for 3 years to pay the bills of the company, but in Turkey it's not easy to find freelance job. If you find, it's more hard to get the money after you complete the job.

I have subscribed RAC about 1 year ago. For the first couple of months, I have worked for only one customer. 3 months ago I have discovered how strong RAC is. I have bid on some projects. Prices were starting from 9$ to 1000$. Many bids were accepted. All customers are happy with my work. I'm getting paid in every 15 days and I earn about 2000$/mo.

Since 3 months, I can pay all my bills, I can go out, I can save money. I don't take any jobs from my country anymore. RAC is really good and enough for a developer.

-Serhan D. Kiymaz

http://www.rentacoder.com/RentACoder/SoftwareCoders/showBioInfo.asp?lngAuthorId=1591509

3. Success Examples

Name: Sasa SalamonAge: 25

Location: Vukovar, Croatia (formerly Zagreb)

Screen Name: N_E_0

Before RAC, it was very, very hard to find someone who needs an application, web site … and it was even harder finding someone who will actually pay for it. Getting paid was a big problem.

I heard about RAC, but I didn’t take it seriously, until 1 year ago, when I tried it for a first time. I was wondering if I could make some money there, how will they send payment, and will they send it at all?

So I made a few smaller projects, to test if it really works. And money came! I remember being happy, and amazed. And my buyers were amazed too. After that I started working more and more on RAC. Now I’m Top Coder, currently Ranked #720 out of 139,722.

I work as much as I want, and I know that if I give more time for it, I’ll earn more money. That’s the way it goes. This way I can control my income. Now I am somehow sure about my future because I can earn money and there are people who need my services. That’s very good to know here in Croatia.

http://www.rentacoder.com/RentACoder/SoftwareCoders/showBioInfo.asp?lngAuthorId=1505490

3. Success Examples

Name: Vladica MilanovicAge: 28

Location: Sokobanja, Serbia

Screen Name: Pera

My RAC story begins 6 months ago, when I stayed out of work. Like any other eastern country in transition, my people also suffered from lack of work. In addition, we also had problems with civil wars, that took part in our region, if there is anything civil about the war.

I started looking for the job over the internet. I had no idea that something like RAC exists. After couple days, and 1001 googl-ed pages, I find some site that acts as agent between coders and buyers. At first, I didn’t believe that it can be true, I thought that it is some kind of trick. After carefully studding terms and the procedure of getting some job, I got much more confidence and started testing the waters of freelance programming. It took me about 50 rebuffed bids and two months later first job landed. After my first job, new one came quickly and so on. There are many returning buyers that gave me new projects. Only after four months I am thinking of founding software company.

Sitting back relaxed in the chair, with your PC in front of you. With no superiors watching your every step, with no work time, you work only when you have inspiration. This could be the story of some famous artist. No way this could happen to some programmer, until Rentacoder…

http://www.rentacoder.com/RentACoder/SoftwareCoders/showBioInfo.asp?lngAuthorId=1630488

4. Current Regional Activity

• Southeastern Europe revenues are small but growing quickly. Note: This is despite only “word of mouth” advertising of this opportunity only.

Country US$ amount # of jobs– Albania $1643 35– Bosnia and Herzegowina $14,048 249– Bulgaria $109,221 1,072– Croatia $19108 238– Macedonia $9535 69– Romania $12,84942 13,657– Slovenia $4900 41– ------------------------------------------------------------------------------------------------– 2006 Total: $1,443,400 15,361

(+21% from 2005)– 2005 Total: $1,042,441.24 12,667

(+56% from 2004)– 2004 Total: $664,167.52 8,435

(+169% from 2003)

– 2003 Total: $246,523.57 3,723

Market Trends in 2006: RevenuesCompleted projects on Rentacoder.com

4. Current Regional Activity

Comparison of Registered Freelancers In Southeast Europe

(Rentacoder.com)

Romania is well represented, but other countries in the area have yet to take advantage of online market opportunities

Romania 13,074

Bulgaria 1,654 Albania 22Bosnia and Herzegovina 285Croatia 536Macedonia 240Slovenia 233

Note: Only 20% of registered coders are typically active (from any country)

1. Introductions and Opportunity Overview

Potential growth in Southeast Europe (Rentacoder.com)

Kosovo 2,100,000 1 1,206 1,205

What is the potential for online market job growth?

5. Potential for Jobs Creation

1,606

2,142

Kosovo

Kosovo

1

2