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Infiltrated by the Mafia, A Silicon Pipe Dream

Last week, the Ministry of Economy, Commerce, and the Business Medium (MECMA, in Romanian) put out a press release outlining their plan for the building of a massive IT centre in Cluj a la Silicon Valley. Their goal is to create something massive enough to achieve a 5% increase in the country's GDP. They take into consideration the following criteria:
1. Cluj is among the top three cities in Romania where companies' revenue is generated in IT and the first in terms of revenues coming from exports (of IT services).
2. The presence of two of Romania's largest universities whose students may constitute part of the human resources foundation.
3. The government is prepared to offer serious support in all aspects of this development strategy.
They add that various government ministries will collaborate at different stages to sustain the construction and growth of the IT centre and that at parliament level, they will be amending laws in support of Small and Medium Enterprises (SMEs) particularly those focused on research and innovation.

Okay, so that was the good part. But it's hard not to be skeptical and I am. Here's where I think the problem lies; the Romanian government is not capable of executing on a project of this scale. Moreover, this is not a country that has a long history of public-private partnerships and with good reason: twenty-five years ago the concept didn't exist, and five years ago, it still didn't exist. Not on any significant scale anyway. This is a country which, in twenty-two years, since the fall of Communism, hasn't been able to build a cross-country highway. It's a country renowned for backwards bureaucratic processes mired in red tape, and one that is badly lacking in the one key resource required to see a project like this through to completion: skilled managers.

Here's a mini-documentary where you'll meet the kind of functionaries you find working for state institutions. I recommend you watch it all because it's fascinating, but the point I'm trying to make comes in after the 8:30 mark (don't forget to switch on captions if you're not Romanian enough ;)

With institutions that don't give a damn, because they're full of people who don't give a damn, nothing's going to ever happen. The condemned buildings in Bucharest will never be consolidated, neither will the Cluj IT Hub ever get finished, though I wouldn't be surprised if they do start something, someday. The problem isn't money, it never really was in Romania as much as people like to say that it is. The problem is that nobody wants to suffer for the sake of the greater good, for the fulfillment of participating in our reconstruction, or for the plain and simple fact that, tough or not, duty is duty. A good manager does these things though; Takes hits for the team, fights for the team, and doesn't run away from duty and responsibility.

The managerial make-up of most multinational companies is a testament to the situation here. The worker-bees are well educated Romanians, former star students and academic prize winners, while the managers -particularly upper management- is typically made up of the foreigners (many of whom I'm sure were not necessarily brilliant pupils). I can't say for sure that this is not simply a result of company policy, but I find it unlikely. If we simply bring it down to a matter of making a business decision, it makes no sense not to promote more people from within the organization at a local level if they have all the required skills for the job. Again, if they prove themselves in the new position you expand their region of influence and so on.

Unfortunately, there are very few people here with a proper Manager mentality. Most seem to think it means they have power over others, that they're special, that they can make others do their job for them and so on. This gets even worse when they work in government, because there, well you saw in that little clip, nobody even knows they exist. As long as they keep getting paid though, they really don't mind.

What I'm trying to imagine here is the massive scope of work this undertaking will require. More than anything it will need a lot of people in both public and private sectors to be sensitive and aware of the plans and goals at each stage. They'll also have to respect each other and the decisions that are made. That's not going to happen. The government people will be mostly clueless and mostly concerned about dotted i's and crossed t's. The private sector people will just want to see shit get done and we won't be able to. The wiseguys whose great idea it was to get it all started will be too busy looking good in chauffeur-driven Benzes to take calls and respond to concerns.

And so it goes.

It's not that I was given psychic powers at birth, or that there's a crystal ball on my desk, but actions speak louder than words. I don't want to be right about any of this, but I don't see it. The issues run much deeper than building a bunch of structures to house the Cluj IT community. This IT hub is meant to foster innovation and produce but for this we need people who are capable of seeing it through from start to finish without getting caught up in personal or political dramas. I'd love to use Cluj Arena as an example of success because it's a beautiful brand new stadium that was built according to plan and in record time. Pretty much a miracle in this country. But now that the 'U' Cluj is just about to dissolve and the county and city are stuck with paying all the bills, how long will it be before the cracks start to appear?

If the hub gets build and one of the larger companies bails out, will the government still care about the little guys? Will there really be enough of the right type of people to fill the hub? Will it entice Romanian expats to come back and participate? Will there be internship/mentoring programs for high-schoolers or young entrepreneurs? Lots of questions here, and they all translate into a need for lots of involvement and attention to detail. I think I have every reason to be skeptical.

Last week I contacted some people at MECMA. I wrote a very brief email explaining that I'd like more details about next steps and to offer my time if they want to speak to somebody 'on the ground'. You think anyone bothered replying?

I'll let you know when they do.

There is another thing though. I'm harbouring a sort of secret hope that the whole thing never happens.

It's often said that corruption has permeated all levels of society and all sectors in Eastern Europe, but one sector that's remained untouched has been IT. Bottom line is that you can't be stupid and mess with IT, it just won't work. You can't pretend to work at/with an IT company and not know a thing about computers, and most of these corrupt morons are computer illiterate, they literally don't know how to close a window (on the desktop). It also happens that you won't meet the type of people who are likely to participate in corrupt schemes alongside their public partner when it comes to this business, it's just not how they roll. Computer nerds love their code and gadgets and they like to keep it simple like that.

And yet, you never know, it's like a virus this corruption biz. Next thing you know computer scientists will be asking for 'a lil something extra' to finish their projects on time and be part of all kinds of kick-back schemes. I may be making all this up, but stranger things have happened. Like paying 800 million Euros for 50km of highway.

The private sector has to be very careful. We have to make sure that plans are well thought out by becoming an engaged partner. We have to participate and do our share of the work, even if participating means giving a lot of our time, and if by some sort of cosmic miracle this works out, then it'll be good for everyone. But it's a big 'if' and it'll take a lot of working out.


  1. No corruption in IT you say? Look up e-romania! It cost 500 M euros, it was supposed to be done by now and yet I haven't seen or heard anything of it since the initial announcement.


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