Lithuania’s development as nearshoring gem
- info1272098
- Aug 28
- 3 min read
Updated: Sep 4
Lithuania has long been a hidden gem among the nearshoring locations on the European mainland. Whereas countries like Romania, Czechia and Poland have long taken center stage as nearshoring locations, Lithuania has developed itself in relative quietness. This quietness should however not be mistaken for inactivity.
When I first moved to Lithuania in 2016, the country had fifty-some global service centers which jointly employed 12,000 people. Within the last decade, this has more than doubled. As of today, Lithuania counts 100 larger-scale service centers which employ an approximate 30,000 people. Although that might sound impressive enough, Lithuania has the potential to develop itself at least twofold from the current point.
Lithuania is a relative latecomer on the nearshoring scene. Things kicked off in earnest only in 2009 when the British Barclays bank opened one of the first major service centers in the country. By that time, other nearshoring hubs such as Prague, Krakow and Lisbon were already in full swing. In Lithuania, the Scandinavian countries had a near-monopoly on large-scale investments in the country. With their orientation on the Baltic Sea, they naturally evolved into the oldest and biggest investors in Lithuania. It will therefore not come as a surprise that Scandinavian giants such as Swedbank, Danske Bank, Visma, Outokumpu and Telia operate some of the largest service centers in the country.
By the time that I arrived in Lithuania from the Netherlands in 2016, there were no Dutch investors of significance in the local IT industry. The potential was, however, huge. It was only a matter of time until someone seized the opportunity and I happened to be at the right time at the right place. With our then start-up Geophy, we established the first larger-scale Dutch service center in Lithuania. From there onward, things developed at an astronomical pace and in a timeframe of three years, we established five Dutch service centers in Kaunas, the country’s second city.
Pioneering projects like my own paved the way for larger enterprises to enter the country. From 2018 onward, large Dutch corporations such as Centric, Macaw and Booking established themselves in the country. The same applied to other western European countries such as Germany which moved in with some household names such as Continental, AL-KO Automotive and Nordzucker around the same time.
The rapid rise of Dutch activity in Lithuania drew its fair share of attention back home. Het Financieele Dagblad wrote a reportage on the sudden spike in Dutch activity, the Dutch minister of Foreign Affairs @Sigrid Kaag visited our office and a selected group of Dutch entrepreneurs was invited to the state banquet in the Lithuanian presidential palace on the occasion of the King’s visit to Lithuania. A short succession of once-in-a-lifetime events to which I hold warm memories and which highlight the heyday of Lithuanian economic growth.
The years between 2016 and 2020 can be considered the golden age of nearshoring in Lithuania. From 2020 onward, the COVID-lockdowns and war in Ukraine slowed the development somewhat down but never significantly. Lithuania has proven itself to be very resilient and its nearshoring industry has maintained an impressive growth rate.
People often ask me how close we are to a tipping point of this growth. My answer has been consistent for many years: we’re far from it. And quite a bit. Compared to the more traditional nearshoring locations on the European mainland, Lithuania is far from saturated. If you look at cities like Cracow in Poland or Cluj-Napoca in Romania, you’ll see that the international service centers respectively employ 131 and 80 people per 1,000 residents. In Vilnius and Kaunas, that number only amounts to 38 and 16 people per 1,000 residents. If anything, this shows that Lithuania has a lot of potential left to grow into the role of one of the main nearshoring centers in Europe.
