According to experts, IT in Russia is gradually recovering from crisis, demonstrating positive dynamics for the first time since 2012. Analytics believe that the growth correlates with the new IT centers appearing all over the country. Where do the developers feel more comfortable? How do the companies choose the locations for their R&D offices? Is there Silicon Valley in Russia? All these questions we have addressed to the CEO of Cognitive Technologies Andrey Chernogorov.
– Andrey, there are 85 competitive regions in Russia. All of them want to be leading IT-wise, so they arrange special tax conditions, jobs… How fair are all these bonuses divided inside the country?
– When it comes to favorable IT business conditions, three key factors should be taken into account: skilled employees, service/product demand and investment climate. Russia rarely has all three components altogether. The demand is normally high in the economic center of the country – Moscow and St. Petersburg. Then go three small peaks – Tatarstan, Ekaterinburg and Tyumen. Everything that comes after Siberia – unfavorable in this way. Far East keeps us on our toes though. The development program in this region is a big step forward, this move should effect on our work in Asia and the Pacific.
If we talk about skilled employees, especially engineers, it is not true that all of them reside in Moscow. In Siberia, St. Petersburg or the south regions, for example, there are much more of them. That is why many of the companies open their R&D offices somewhere not in Moscow.
Finally, the third component of the success – investment climate. Its level is nothing more but local management teams. Well, at least it applies to the regions where the government is concerned about the issue.
– As far as I understood, only the third component can outweigh in case the rest are nonexistent.
– I don’t know. None of these components alone is the way to success. You should have it all to get to the top. However, government’s commitment loses to people and economic components. I know a few of local success stories when despite of the government’s passivity does not prevent IT from growing.
– Could you give an example?
– Cheboksary. We have an office there for more than 10 years. Top ten of Russian’s IT business have offices there, by the way. Chuvash Republic does not support anyone: we have not heard anything about any governmental initiatives or benefits whatsoever. However, the professional level is high there – thousands of graduates stay in the region. They do not want to move anywhere, they want to work there. That is why the market leaders are eager to have their offices in Cheboksary, although no one has their tax departments there. The same situation is in Chernogolovka. We’ve started to work there more than 10 years ago when all that IT-parks popularization just happened. Then the taxation benefits stopped and everything that remained were people. Real professionals to be fair. They do not want to move anywhere. Probably the comfort of life is another factor in this case.
It is felt the most in Kaliningrad, where we also rooted recently. We develop our procurement systems for international customers there. There is only one important factor – people want to live there. All the rest is just invalid. There is no governmental support either, only people who want to work and do it pretty well. It’s Cognitive’s fast-growing R&D center. And again, all the Top-10 companies are there.
– So, is there a place where all the three components are present?
– We have found this place in Tyumen. There was nothing a couple of years ago and now it is a promising IT cluster. There is a substantial oil and gas demand, great governmental support in terms of taxation and acceleration programs. In other words, the local government is happy to welcome new business there. It’s a wise move since all those businesses pay taxes to the local government. At the end of the day, it attracts the employees. This way of doing business reminds me the Chinese approach.
Tyumen has become attractive to the neighboring cities, the youngsters move there. Local universities also benefits from it. We’ve even decided to open our own Programming School there. So, altogether, it influences the economics in a good way, the region is growing and prospers. Cognitive Technologies has already opened an office there. Now we are considering the opening an R&D office (the third largest). Well, taking into account the growth pace, it can easily become our second largest, to be honest. We see good prospects in this case. If the governmental support remains the same, it’s going to be a really fascinating example. The only thing missing is housing arrangements. It’s not like in Tatarstan, for example.
– Do you consider Innopolis successful?
– It’s a really cool project. The example of how a local IT infrastructure can be created from scratch. Moreover, all those components I mentioned in the beginning were taken into account and brought to life. I mean the components and a comfortable ambience, of course. A bit more over the year ago we were one of the first Innopolis residents. Now we can’t hire new people because of the housing waiting-list. It’s funny that out of 30 people working in our Tatarstan office 28 came from other regions. You can see that those who constructed Innopolis have underestimated its potential growth.
– Can we compare this project with the world tech capitals?
– Yes. In fact, Cognitive Technologies explored the Smart City concept when we working on “Skolkovo Smart City”. I must say that Innopolis is a great analogue of Songdo International Business District in South Korea, Japanese Fujisawa and Eindhoven in Netherlands.
It’s important that each of these cases started from the innovation ambience first. It nurtured the talent, gave engineers the ability to prove themselves. We should treat people properly first. For example, or the buildings in Innopolis are modern. Such designs sets the mood for creativity and productivity. The infrastructure is much more developed than in Moscow. You can even make an appointment to a doctor via Telegram bot. One can pay the bills or contact services through those bots. Moreover, you can always find something to do there. During the wintertime opens one of the best Russian ski centers, in summer you can play golf. We always want to open our R&D centers in the places where people are happy to live. They want to stay in those cities, work there. Now we are looking quite positively at Vladimir. It’s close and has great touristic potential.
Belgorod is also of our interest. That region is famous for its successful agricultural transformation. If the local government decides to transform IT the same way, the growth is going to be enormous. The city is also similar to Tyumen, it attracts people from north because of its housing programs. A lot of families can afford living in their own houses, there is a high satisfaction level and transportation quality. Moreover, it’s almost in Europe and just an hour flight from Moscow. In other words, it’s the place for transformation and creativity.
– There should be much more of such regions…
– There are almost no IT companies in the South. I haven’t heard of such cases in Sochi, Novorossiysk, Anapa, Rostov-on-Don or Krasnodar. There is lack of IT companies in St. Petersburg or Moscow region as well. Partially it’s all about budgeting and financing. It’s hard to talk about creation when there is no spare budget money for that. At the moment, we have 15 surplus regions in Russia, but none of them are tech-oriented. So, we have some promising areas in terms of development. We also have some success stories like Tyumen.
Vadim Shumkov, Tyumen Region Deputy Governor:
Tyumen region governance actively supports innovations and local IT business. New tax, financial and other programs are launched locally in order to help new and existing tech projects. The priority is given to domestic development. We are proud to present effective import substitution in the region. Taking into account that the main tech consumer is gas and oil sector, this constant demand effects the economy of the whole country. The percentage of innovation goods, works and service has increased by five times during the last year as a result of such work.