A thought-provoking interview addressing the brain drain phenomenon that has plagued Romania in recent decades, offering insight into the progressive endeavours that are reversing the trend.
An interview with Jonathan George, Founder & CEO of nearshore technology staffing specialist, Carbon.
To start off, please share a bit about your inspiration behind founding Carbon and how the company has since evolved?
Carbon came about in 2017 after I heard many of my founder friends in the UK voice their struggles with hiring and retaining the high calibre software engineering talent they needed to build and grow their technology businesses. I soon realised that this shortage of quality talent was a common pain point, but across the technology industry at large; an industry that was in fact totally new to me at the time.
I’d chosen to spend the summer of 2017 in Bucharest to take time off from working in the City of London and to retrace my Romanian roots (from my mother’s side). I soon found myself surrounded by an abundance of talented IT professionals and quickly realised that I was living in a market flush with the exact people my friends back in the UK needed. So, bringing these two sides together, East and West, felt like the obvious thing to do. I later discovered that this wealth of IT talent is one of Eastern Europe’s core competitive advantages given the region’s long history with higher level computer science studies.
The name “Carbon” came about later after operating under a different name (Pathway) for our first few years. I chose “Carbon” because I’ve always been fascinated by the process of how carbon atoms, stored and pressurised under the earth’s surface for millions of years, have the potential to one day become a diamond. In their raw form, diamonds only reveal their true hidden value once discovered and polished. I think it’s a beautiful metaphor for our ethos that exceptional talent hides in plain sight, distributed around the world. Our mission is to uncover and honour hidden talent based on merit, not postcode.
In our early years, we partnered predominantly with foreign companies looking to build and grow a local presence. We quickly developed a reputation for being incredibly efficient in our headhunting division, scaling in-house teams for the likes of UiPath and ING Bank. As the business evolved, and as a reaction to the explosive global demand for remote staff augmentation services, we launched our contractor division, assembling elastic teams for Carbon’s global partners. During these years, we successfully tripled the business, moved our holding company to Estonia and expanded into new strategic talent markets, such as Poland, Hungary and Georgia. We also developed close ties with global venture capital funds like Sequoia, Earlybird Ventures and Partech to provide the qualified talent runway their portfolios so desperately needed.
How would you describe what the “brain drain” is and how it happened?
The term “brain drain”, or “brainwave” as we like to call it at Carbon, refers to a mass emigration of highly trained and qualified people, and often occurs from countries with lower standards of living to countries with higher standards of living.
It’s unfortunately been a long-running theme for Eastern Bloc countries, including Romania, following the fall of Communism in Europe in 1989. The country had to rebuild itself in a free market system which, needless to say, was no easy task and resulted in a period of economic uncertainty.
Faced with a low quality of life and poor job prospects, educated Romanians who had the means to leave the country chose to do so, with many relocating to the US, Canada, Germany and Austria. Most of these people came from technical and scientific fields, both thriving sectors in Romania due to its STEM-oriented educational system. There was a second exodus of human capital in 2007 when the country became part of the EU and blue collar workers joined the outflow of talent. I recently read a worrying statistic that over 5 million Romanians have left since 1989, that’s shockingly over a quarter of the population!
At Carbon, given our core focus, we’re particularly exposed to the technology brain drain which is the same concept but focused on the emigration of IT professionals. There’s a myth made famous by former Prime Minister, Dacian Ciolos, that Romanian is the second most spoken language at Microsoft’s Headquarters in Redmond, Washington. While unlikely to be true, it reflects the reality that tens of thousands of Romanian programmers have settled in the US, many of whom have joined the ranks of Big Tech like Meta, Google and Amazon – all of which have close relationships with Romania’s leading computer science universities.
How do you believe the brain drain has impacted Romania?
Romania’s brain drain has had, and continues to have, a negative hidden impact on the country’s economy. Not necessarily in terms of current economic growth – as the economy has witnessed stellar growth rates in recent years, but in terms of stunting the country’s long–term potential for reaching economic parity with Western Europe.
The departure of the country’s scientists, researchers, IT professionals and business consultants contributed to a void of much needed R&D human capital. And the emigration of entrepreneurial talent, in part due to the lack of a mature capital markets system, has made it challenging for innovative companies to spawn locally.
Despite these challenges, Romania has historically excelled in the IT outsourcing and offshoring sector. It’s essentially the backbone of the country’s IT market and contributes to around 6% of the GDP. Romania’s competitive advantage in terms of cost and quality of software engineering talent has always made it an attractive destination for foreign companies to offshore part of their software development needs.
The outsourcing wave was a double-edged sword. It brought tens of thousands of jobs to the local market, but the work was relatively unmotivating and uncomplex for many of the country’s leading computer scientists. The projects tended to be siloed, low-level maintenance and execution work, not cuttingedge software development projects with the latest technologies. Unsurprisingly, the country’s global Olympiad winners had a desire for more and with Big Tech’s voracious appetite for Romania’s sharpest engineers, it’s easy to see why so many emigrated Westward.
When Romania joined the EU in 2007, a push and pull catalyst unfolded. On the one hand, it accelerated the departure of IT professionals who no longer needed visas to travel, study and work across the EU. On the other hand, it accelerated the arrival of foreign technology companies like Oracle, Adobe, Intel and Amazon into the local market. Not in search of outsourcing services, but to build their own product-focused development centres. Whilst the spawning of homegrown technology enterprises like Bitdefender and UiPath were still several years off, the arrival of Big Tech was naturally welcomed by local IT talent.
How would you describe the evolution of the local technological landscape?
Despite the loss of many exceptional technical minds in past decades, Romania has been blessed with an abundance of IT talent, accounting for around 3% of the country’s working population. And, thanks to years of sustained and continued growth since joining the EU, Romania’s digital economy is expected to grow to €52 billion by 2030.
The gradual influx of global technology companies, setting up local software development centres in Romania contributed to the gradual shift away from outsourcing jobs to in-house and product-oriented businesses. With their arrival, opportunities for local developers to work on more meaningful projects and in-house products on higher salaries than those provided at margin-compressed outsourcing software houses, all without having to leave from Romania.
All of this foreign investment had a positive innovative ripple effect on homegrown companies too. In 2018, UiPath became Romania’s first unicorn which was an incredibly exciting moment for the technology industry in Romania. And it was particularly impressive because UiPath was born in a market relatively void of capital; had it not raised venture capital from outside it would have arguably never scaled to its lofty heights. As the company entered its Blitzscaling phase, it realised it needed greater technical firepower than the calibre of talent that the local outsourcing-centred talent pool could provide. To build a category-defining global enterprise, it needed the legendary Romanian-speaking engineers from Microsoft Redmond that Ciolos had crystallised into folklore.
Then, fast forward to 2019/20 and with the outbreak of COVID-19 the world ironically became both more isolated and more globalised at the same time. The rapid adoption of remote work saw a flurry of remote hiring across the globe especially in the technology sector, and particularly in talent markets of Eastern Europe and LATAM.
These ‘new’ international employers were agile, not looking to set up local entities or offices, but happily hiring Romania’s brightest developers on a purely remote contract basis. This provided local IT talent access to substantially higher salaries (some seeing their net salaries double or triple overnight). It also caused massive attrition spikes which decimated local employers and outsourcing firms that simply couldn’t compete with the global salaries being offered to the country’s top 1%, with some receiving offers of $200k/year.
The COVID-19 pandemic accelerated the Technology Brainwave(s) trend, providing a strong tailwind for the Romanian tech diaspora to return to home and work remotely. Afterall, their employers in the UK, US, and Switzerland were now willing to work fully remotely, so why not do so from Romania, close to family and friends, with the added benefit of a substantially lower cost of living.
How have you approached the brain drain, or brainwave, problem at Carbon?
Our tagline is “honouring exceptional talent”, a belief we live by day in and day out.
While a lot of these exceptional minds find themselves at ‘home’ in Bucharest, Cluj or Brașov, the vast majority are still distributed around the world, with large numbers clustered in San Francisco, Seattle, New York, London, Berlin and Zurich. In our committed search for excellence, we created the ‘Carbon Atlas’ to map out the entire Romanian IT diaspora across the globe. We continuously engage with these talent pools both online and in person whenever visiting any of these cities. We’ve lost count of how many of these engineers our Recruitment Ops team have met in person since 2018. But we’ve had well over 1,000 coffees and lunches over the years in true Paul Graham “do things that don’t scale” fashion.
Building these deep talent networks from day one laid the foundation of what was to come, and forms part of Carbon’s strategy to this day. It played a crucial role when ride-hailing platform, Bolt, contracted us to grow their local tech hub, enabling the European unicorn to expand into a new vertical – food delivery. To everyone’s surprise and delight, by using our diaspora network we brought home some 25+ world class engineers from as far as San Francisco, Oslo, London and even Singapore to join Bolt in Bucharest. These weren’t your typical IT profiles found locally, but the global top 1% of software engineers working at the likes of Google, Meta, Palantir and Amazon. This arguably marked the beginning of a new age for the Romanian IT market. For the first time ever, the country’s sharpest tech minds from across the diaspora were returning home in waves.
As the COVID-19 pandemic unfolded later that year, the number of ‘returners’ started to grow exponentially, with Carbon attracting ever more engineers with bountiful and lucrative remote work opportunities. We became known in the local talent market as the go-to gateway provider that could secure local senior engineers’ salaries of $120-200k by contracting remotely with the US, something that was almost unheard of before 2019. Acting as gatekeepers of both exceptional talent and lucrative remote contracts, Carbon quickly earned a reputation for being the go-to staffing provider for Eastern Europe’s finest tech talent.
While we continue to play our part in accelerating the reversal of the brain drain which has plagued the country for many years, we are just a small part of the change. Nevertheless, my patriotic, halfRomanian side is proud of the work we’ve done to help many of these great minds return home where they contribute to the economic growth of the country by spending their hard-earned US dollars on Romanian soil.
What do you think the future looks like?
I’ve befriended numerous business people during my years in Bucharest and we all agree that the reversal trend is here to stay. One of the country’s wealthiest individuals, whose name I won’t disclose, is in fact looking to set up a $100 million investment venture studio, to roll out dozens of local startups. He’s personally asked for my help in attracting management consultants and investment bankers from across the diaspora, making them entrepreneurs-in-residence for these incubated startups.
One thing I’ve always admired about Romanian culture is how family oriented it is. I often hear from those returning home that they simply wanted to be closer to their families and ageing parents. The warmer Latin culture sometimes makes it difficult for many Romanians to fully integrate into certain societies, British and Swiss especially.
The trade off many have made in being away from family in search of better work and living standards is slowly becoming a thing of the past. I’m confident that more and more Romanians will continue to be drawn back home. In doing so, they are not only bringing foreign savings, but also new perspectives, and for some, entrepreneurial and / or political ambitions with them.
Wanting to shed light on this growing trend, Carbon is holding a Technology Brainwaves event at the end of April. We’re inviting former diaspora tech and business leaders to share their personal stories about why they returned home and to explore what must still be doneto accelerate the return of many others. The event can be watched live on our YouTube page.