Business Process Outsourcing - Estonia

Estonia

Revenue in the Business Process Outsourcing market is projected to reach US$73.54m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.19%, resulting in a market volume of US$94.70m by 2029.
The average Spend per Employee in the Business Process Outsourcing market is projected to reach US$97.45 in 2024.
In global comparison, most revenue will be generated in the United States (US$146.30bn in 2024).

Key regions: United Kingdom, United States, Brazil, Japan, Netherlands

Market

Region

Region comparison

Currency

Analyst Opinion

Business Process Outsourcing (BPO) has been a growing industry in Estonia, with a steady increase in demand from both domestic and international clients. This growth can be attributed to various factors, including favorable government policies, a skilled workforce, and a strategic location.

Customer preferences: Customers in the BPO market in Estonia are increasingly looking for providers that can offer a wide range of services, including customer service, technical support, and back-office operations. There is also a growing demand for providers that can offer multilingual services, particularly in languages such as English, German, and Russian. Additionally, customers are looking for providers that can offer customized solutions that are tailored to their specific needs.

Trends in the market: One of the key trends in the BPO market in Estonia is the increasing adoption of automation and artificial intelligence (AI) technologies. This trend is driven by the need to improve efficiency and reduce costs. Providers are investing in technologies such as chatbots, machine learning algorithms, and robotic process automation (RPA) to automate repetitive tasks and improve the accuracy of data processing.Another trend in the BPO market in Estonia is the growing popularity of nearshoring. This trend is driven by the desire to reduce costs while still maintaining a high level of quality. Estonia's proximity to Western Europe, combined with its lower labor costs, makes it an attractive destination for companies looking to outsource their operations.

Local special circumstances: Estonia has a highly skilled workforce, with a large pool of talent in areas such as IT, engineering, and finance. The country's education system is also highly regarded, with a focus on science, technology, engineering, and mathematics (STEM) subjects. This has helped to create a workforce that is well-suited to the needs of the BPO industry.In addition, Estonia has a favorable business environment, with a low corporate tax rate and a streamlined regulatory framework. This has made it an attractive destination for foreign investors looking to set up operations in the country.

Underlying macroeconomic factors: Estonia's economy has been growing steadily in recent years, driven by a strong export sector and a favorable business environment. This has helped to create a stable economic environment that is conducive to the growth of the BPO industry.Another factor that is driving the growth of the BPO industry in Estonia is the country's strategic location. Estonia is situated at the crossroads of Northern and Eastern Europe, making it an ideal location for companies looking to serve clients in both regions. This has helped to attract a number of multinational companies to the country, which in turn has helped to drive demand for BPO services.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.