by Diana Placiakiene, Business Community Manager at InnoHub Lithuania
For several years now, the Baltic has seen tremendous growth in its Deep Tech and AI sectors. One of the countries that has stood out in this trend has been Lithuania, specifically in its capital, Vilnius, which is now being referred to as the “Baltic Silicon Valley.”
One of Lithuania’s key contributors to its growing tech dominance has been its startup scene, which has grown by over 700% in the last eight years, outpacing neighboring areas between Central and Eastern Europe.
This growth has been supported by a government-supported ecosystem that encourages forward-thinking talent development, the rapid evolution of a highly complex digital infrastructure, and a dedicated focus on creating sustainable technologies in areas like fintech, biotechnology, laser manufacturing, and cybersecurity.
This ongoing evolution of Lithuania’s tech sector has created many new opportunities for organizations in the US looking to establish strategic partnerships when expanding their presence across international markets.
How is Lithuania’s Technology Industry Separating Itself From Other Countries?
Lithuania is the largest of the three Baltic states and is located in northeastern Europe. Although it is a relatively smaller country with a population of just under 3 million people, it has quietly become a major player in the tech world. Once under the control of the Soviet Union, Lithuania has embraced a new identity as a modern, innovative nation with a thriving economy.
At the heart of the country’s economic boom is its quickly developing IT sector and startup ecosystem, which have experienced exponential growth since 2018. Several factors have contributed to this, including:
Deep Focus on Diversity and Specialized Skill Development.
Lithuania’s focus on creating a highly diverse talent pool across various industry sectors has ensured a steady supply of science and technology specialists across the country. Boasting the highest shares of women employed in both fields (64%) when compared to other countries in the EU, Lithuania is helping to right-size the gender disparity that has existed for decades across critical industry sectors.
Lithuania is also the first in the EU when it comes to employing younger specialists aged 15-34 in the ICT sector and the top country in the world when it comes to the availability of digital skills. To add to this, Lithuania continues to scale its available IT-focused talent pool by an average rate of 13% each year.
A contributing factor to wide talent availability in the country is the ongoing support from local governments and the network of universities and research institutions in the region. For example, in Jun 2024, the Lithuanian Public Employment Service launched a National Reskilling/Upskilling Programme focused on adding 20,000 additional specialists in an effort to further develop the ICT, engineering, and life sciences.
Beyond government financial support, a variety of tech hubs, incubators, and accelerator programs are in place to provide entrepreneurs with the essential resources they need to scale their operations. This includes higher accessibility of co-working spaces and business mentorship programs.
Startup-Friendly Business Culture.
Lithuania has one of the most startup-friendly business cultures in all of Central and Eastern Europe. There are currently nearly 1000 startup active startup companies in the region, as well as three major corporations Vinted, Nord Security, and Baltic Classifieds Group).
The total value of the country’s startup businesses is currently valued at roughly 13.7 billion euros, many of which are supported by major venture capital funds.
With a heavy focus on supporting entrepreneurship and attracting new investment opportunities, Lithuania has become a preferred location for establishing new businesses. These features, coupled with a higher quality of life and lower cost of living for local residents, are leading many Western businesses to look to establish sustainable partnerships in the region.
Advanced Digital Infrastructure Development.
Lithuania’s fast-developing technology sector is built on a highly advanced digital infrastructure. In October 2021, the country’s Ministry of Transport and Communications put together the ultra-fast broadband development plan that focused on increasing all household and public internet speeds to at least 100 Mbps by 2027.
Today, Lithuania is now ranked 1st worldwide when it comes to public wifi speeds, with 90.1% of all households having the ability to access 5G networks. The country’s other strides in areas such as renewable energy, transportation, cybersecurity, and IT and service operations have made it an excellent location to expand international business networks.
The cybersecurity market specifically is expected to grow in Lithuania by 8.63% over the next five years. The accuracy and effectiveness of new cybersecurity solutions and services provided by Lithuania security organizations are projected to equate to $125.6 million in revenue by 2029.
Why is Lithuania a Great Choice for Establishing a Tech Partnership?
US-based can gain a number of benefits when partnering with Lithuanian tech companies. Below are just a few reasons why Lithuanian tech partnerships are becoming so valuable:
More Cost Effective.
One of the biggest draws of Lithuania is its cost-effectiveness compared to other European nations. Businesses can tap into a highly skilled workforce without the higher labor costs often found in more established tech hubs. This allows companies to stretch their budgets further and see a greater return on investment.
In addition, Lithuania offers a welcoming tax environment for businesses. Various incentives and tax breaks are available, which can significantly reduce operating costs and improve overall profitability.
EU Membership.
Being a member of the European Union gives businesses in Lithuania several benefits. The country’s commitment to meeting various EU standards means safer business practices, stronger consumer protection, and the use of sustainable frameworks that lower the risks for businesses moving into new markets.
English Language Proficiency.
Lithuania is home to a variety of prestigious universities and research institutions, offering over 500 different study programs taught in English. The country also has one of the highest ICT literacy rates, with many students learning diversified communications and having 100% English efficiency. This makes the country a perfect hub for Western companies looking to diversify their teams while minimizing communication issues.
Using Innovation Hubs to Build Profitable New Relationships
To leverage the potential of the Lithuanian tech scene, outside organizations and investors must take the right approach when building a transatlantic partnership. This is where an Innovation Hub can be incredibly valuable.
Organizations like InnoHub Lithuania can be effective connectors between US and Lithuanian businesses. They offer the local knowledge of Lithuanian business regulations and trade influencers and have the connections necessary to facilitate strong partnerships with overseas companies.
For example, InnoHub Lithuania conducts various networking events and workshops year-round. These events bring local startups, international investors, and industry leaders together under one format and create unique opportunities for building mutually beneficial relationships and exploring potential joint ventures.
Start Taking Advantage of Lithuania’s Growing Tech Scene
Lithuania is a great place to look when establishing new tech partners. By exploring everything the region has to offer and creating the right partnerships, organizations can uncover a wider range of opportunities to scale into new markets and introduce exciting new innovations into their business models.
Diana Placiakiene, the Business Community Manager at InnoHub Lithuania, brings over a decade of experience in marketing, sales, events, and community building. Her career spans work with early-stage startups, government initiatives, and small businesses. From 2013 to 2015, Diana represented Innovation Agency Lithuania in Silicon Valley, acting as a bridge between Lithuanian tech companies and the dynamic Silicon Valley ecosystem. She also led the San Francisco American Lithuanian community for over three years, launching innovative programs and initiatives to connect and empower professionals.
