You won’t find the world’s lowest labor rates in Eastern Europe, and one has to follow European Union environmental and other regulations in much of the region. It’s not the world’s fastest growing economy, as is China. In Eastern Europe you will find some graft and less-than-ideal manufacturing/logistics infrastructure. But for electronics company executives and strategists it’s the region to focus on now for many reasons.

The market for manufacturing services and support is moving east in Europe. Leaders are already creating and implementing sound strategies for design and manufacturing in Eastern Europe. Last week Texas Instruments’ CEO Rich Templeton said that his eyes are on markets in Eastern Europe for semiconductor sales.

Contract electronics manufacturing in Europe is expanding and changing, which affects decisions about electronics manufacturing services (EMS) companies, design in the region, component and material supply, logistics, recycling, and after-market service. The world’s largest electronics contract manufacturer Foxconn (HonHai) is building HP computers in Russia (near St. Petersburg) and is the second-largest exporter in the Czech Republic.

The European Union economy (GDP) is ranked #1 and the manufacturing center has shifted to Eastern Europe; being “absent” from this region is not an option.

Eastern Europe is not one market — it is a dozen or so markets defined by varying levels of economic vitality, socioeconomic slices, languages, business customs, quality of infrastructure, and laws. To succeed in the region, it’s essential to gain insights about each market and choose the best ones for design, manufacturing, sales, and services.

Environmental regulations in Europe are on the forefront globally and in continual progression. One must take into account how current and future regulations will affect the way the industry designs, produces, ships, reuses, and recycles products.

Recent global current events (Icelandic volcano, tainted products from China, a well-spring of corporations publicly announcing carbon footprint and reduction plans) underscore the imperative of exploring close-to-customers manufacturing strategies. So many of our tech clients generate 25% to 50% or more of their revenue from Europe. We say it’s critical to understand how best to serve customers there.

For these reasons, TFI is launching a study called Electronics Design and Manufacturing in Eastern Europe. Huge thanks go to our Founding Clients for supporting this research. Let us know if you’d like to become a Founding Client for first access to the insights, or would like to be interviewed by the TFI research team for the study to receive a complimentary executive summary.

I invite you to reply at the bottom of the blog regarding your views on Eastern Europe as a strategic venue for electronics design and manufacturing.

Posted by Pamela J. Gordon, May 10th, 2010

Filed to Environment, Logistics, Outsourcing, Supply chain management

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