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An ambitious 5-year plan for the Russian IT-sector

0 13 January 2014

In keeping with long standing Russian tradition, the government has produced a hugely ambitious 5-year plan aimed at doubling IT exports and growing the sector three times faster than the country's overall GDP. The plan, pubished in the form of a ‘road-map’ for 2014-2018, was signed by Dmitry Medvedev at the end of 2013, and published last week. You can read the 20-page document (in Russian) here, but if that doesn’t really appeal, here's a summary of the key points. 

Developing IT-infrastructure

By 2015 Q2 there should be at least 11 functioning technoparks in Russia, occupying no less than 350,000 m² and employing more than 25,000 people. 

Skolkovo will continue to be used to popularize the IT-sector, while the government also has high hopes for Kazan’s new Innopolis University

A subsection within the infrastructure chapter was devoted to open data. The government is expecting to see new commercial and socially beneficial projects based on open data in the health, education and housing association sectors. 

The state also reaffirmed its commitment to supporting IT exports through favourable legislation, short term loans and other means. 

Training IT-specialists

The government acknowledges that there is a shortage of IT specialists in Russia. In 2014-2018 another 350,000 tech experts will be needed, and the government has committed to providing full scholarships for 150,000 young people to study related subjects at state universities.

The road map also outlines a plan to modernise IT education in schools. Its proposals include IT Olympiads (which are already held for most other subjects) and other tech competitions. 

While there is a clear focus on young people, older citizens are not forgotten. Computer literacy will be made a requirement for state employees, who will also receive training.

Improving the business climate for IT-firms

This section includes attracting highly qualified tech specialists to Russia, improving tax rules for IT companies and putting in place regulations that simplify cloud accounting. 

Throughout the road map’s drafting process Communications Ministry officials and Deputy Prime Minister Arkady Dvorkovich, who has special responsibility for the tech sector, have also maintained their commitment to lowering taxes for IT-companies. 

Targets

The government has set ambitious targets for the IT-sector. It wants the sector to produce $14 billion worth of goods and services per year by 2018, which means it needs to grow at three times the predicted rate of overall GDP growth. $9 billion of that is to be exports, which is almost double the $5.2 billion of IT-products Russia exported in 2013. 

The government also wants the amount of venture capital invested in Russian IT firms to double. Total current investment is estimated at $560 million and the government wants that to increase to $1.25 billion. If Russian companies are to meet these targets, they'll need every penny. 

We asked Sergey Toporov, senior investment manager at LETA Capital, for his thoughts on the government road map.

"It is a big plus that the government is taking measures to promote the IT-sector. Only time will tell how effective these measures are. 

Of course, measures like “the creation of 25 centres of disruptive research with the aim of developing quality new developments in the IT-sphere” are, in my opinion, a strange way of really promoting “disruptive research and quality new developments”, because these developments should be dictated by the market, not by government funded scientists. 

It’s interesting to look at the plans to further IT education and the section about improving the business climate for IT businesses. This is an area that has hardly been touched, and let’s hope they don’t make it worse! It is, however, difficult to know exactly what the government’s plans are. For example, the government wants “developed projects of normative legal acts connected to cloud accounting that make it easier to do business” - What does that mean!? 

Until we can see the government’s policies in action, it is difficult to evaluate them objectively. However, in general anything that increases funding for the sector is good, because it helps its overall development."  

Top image via Shutterstock

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