Sunday, December 30, 2007

IT sector boom: Skills and local growth shift IT balance


The most recent figures available from the government suggest that the volume of this market grew by 20pc in the last year, reaching a capitalisation of some 1,162 trillion roubles (approximately $48bn).

Indeed, Russoft, the software industry’s representative , suggest that software export alone accounts for some $1,5m, a 54pc increase on last year.

No less significantly, there has been movement to resolve many of the issues that previously hindered foreign collaboration – eg weak infrastructure, lack of knowledge of English , management and intellectual property rights. Just last year, the number of companies with international ISO or CMM/CMMI standard management systems increased from 18pc to 28pc.

According to Alexis Sukharev, founder of Auriga , a software R&D outfit incorporated in the US, what this has meant is an exponential growth in the demand for Russian IT skills abroad. “The Russian engineering labour pool now has a lot to offer to companies who need specific R&D skills and comprehensive approaches to complex projects,” he said. One of the main areas of growth has been outsourcing, with Russian companies increasingly able to become reliable strategic partners for Western high-tech and software companies.

In terms of the outsourcing market, India naturally remains the undisputed leader in the field. But its superiority at the top end of this sector is no longer quite as assured as it once was.

Steve Chase, president of Intel Russia, believes global leaders are increasingly turning to Russia with the most complex problems: “The policy we have at Intel is simple. If we can, we commit difficult problems to engineers in the USA. If the task is very labour-intensive , we assign it to the Indian specialists. If the problem cannot be solved, we offer it to Russians.”
Almost uniquely, Russia is not only experiencing accelerated growth in the export of IT products, but also a consolidated growth in the local market.

Indeed, global IT conglomerates are finding that a focus on the Russian consumer is now as profitable commercially as their export dimensions.

Valentin Makarov, presided of Russoft, is particularly enthusiastic about the combination of strong export and import potential, allowing as it does foreign clients to approach Russian companies “not only as outsourcing partners, but also as local promotion and marketing partners” .

Makarov was also keen to emphasise the rapidly improving economic situation in Russia. In broad terms, the volume of direct investment in Russia is now growing by 100pc annually. Specifically in the area of IT, there have been radical changes in federal government policy, including the provision of tax breaks and investment capital to hightech companies. The Russoft survey showed 76pc of market-leading companies consider government support to have improved significantly over the last two years.

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