How Lithuania became a Global Business Services hub in 10 years

Lithuania’s sector for Global Business Services (GBS) and Information Communication Technology (ICT) has transformed in the past decade. It is almost 5 times larger, and the nature of the operations handled by Lithuanian Global Business Services centres has expanded and diversified dramatically. 10 years ago, GBS in Lithuania was characterised by transactional cost saving operations. Today, its centres handle an ever-increasing range of high-value and mission-critical functions.

Strong fundamentals in terms of IT infrastructure, cost efficiency, and government support have supported this transformation. And crucially, the educated talent pool that first attracted GBS investors has grown in lock step with the industry. As a result, many companies that originally had modest plans for their Lithuanian GBS centres have expanded the scale and remit of their operations. What’s more, a majority plan to further expand their operations, with 85% citing top talent availability as their number one reason for doing so.

In part one of our blog series on Lithuania’s GBS and ICT sector, we present an overview of how it has transformed over the last 10 years and where it is headed, all augmented with expert insights and data from Invest Lithuania’s latest GBS report.

Lithuania’s GBS sector has never been stronger

Lithuania’s GBS and ICT sector is in rude health. 10 years ago, the sector employed 5,500 people and provided a narrow range of functions. In contrast, today it features 100 GBS centres employing 27,000 specialists who deliver a wide range of services, everything from cybersecurity to data science to finance. Lithuanian teams are working with stakeholders across the globe for companies from Scandinavia, Western Europe, North America and Asia. The most prominent sectors represented in Lithuania’s GBS ecosystem are ICT (including wix.com and Unity), financial services (with Moody’s, Revolut, and Nasdaq present), and manufacturing and engineering (including Continental and Hollister).

Share of centres by sector and employee count

Diversification and high value services

While Lithuania’s GBS and ICT sector has witnessed many changes in the past decade, the most significant is a dramatic shift in the functions delivered. “Lithuania’s GBS sector has seen a remarkable transformation, shifting from transactional cost saving operations to centres of excellence delivering high-value services,” explains Rūta Kriščiūnaitė, Head of GBS & ICT Team at the country’s investment attraction agency, Invest Lithuania.

As a result, the sector has reached a level of maturity that puts it on a par with the best in Europe.”Lithuania’s business service capabilities now match the quality and sophistication of Europe’s major business hubs,” explains Elijus Čivilis, General Manager at Invest Lithuania. “This represents a qualitative leap – evolving from being merely cost-competitive to offering exceptional quality and sophisticated functions.”

This leap has occurred because Lithuanian teams exceeded expectations. There are countless examples of companies that established teams with limited functions and scale, only to dramatically increase a centre’s scope and responsibilities after seeing how teams here perform. Take Cencora, a leading global pharmaceutical solutions provider. In 2017, it set up a 10-person operation focused on Shipping Management. Since then, it has launched a shared services centre and expanded to cover 28 different functions, including full-scale IT development and finance operations, data science, and business intelligence. Its office even includes a dedicated cybersecurity team, playing a critical role in safeguarding global operations.

Number of functions performed by share of GBS & ICT centres

Overall, almost 65% of all GBS and ICT centres in Lithuania handle over 5 functions. “Unlike pure product development hubs, centres based in Lithuania often specialize in high-value business services including fund management, AML, data science, and supply chain management,” comments Rūta Kriščiūnaitė.

In the next part of this series, we will explore how Lithuania’s exceptional talent pool has been the driving force behind this remarkable transformation.