How Russian IT-companies can gain a foothold in foreign markets

How Russian IT-companies can gain a foothold in foreign markets

The director of the Centre for Global IT Cooperation, Vadim Glushchenko, spoke about the opportunities his organization offers to promote domestic high-tech companies abroad.

- Is the Russian IT industry ready for global expansion?

-  We see a dynamic development of information technology in Russia. An important stimulus in recent years has been the tangible support of the IT sector by the Government. Several packages of measures, including grants and various incentives, are really helping to develop new products and improve the competitiveness of domestic companies in the global market. However, financial support alone for the IT industry is clearly not enough to reinvent the Windows-level operating system and create analogues of world-renowned services and solutions. However, this problem is familiar to many other countries - in Europe, for example, for many years they've been struggling to create IT companies - national champions, able to compete on equal terms with world market leaders. Something is working out, of course. But according to Forbes, there are still seven American, two Chinese (one from Taiwan) and one from South Korea in the top ten largest technology companies in the world.

In my opinion - and I think many would agree with me - the global IT market has long been monopolized. Each segment is controlled by several giant corporations, and practically any relatively new and small company can at best expect to occupy only a narrow niche. In such conditions global expansion of Russian companies is hardly possible. In fact, we do not really need to. What is important is that our IT products are nevertheless quite capable of gaining a strong position in a number of local markets abroad.

The potential of many domestic companies, including their export potential, is undoubtedly significant. Moreover, the level of training of our IT specialists remains one of the highest in the world: after all, Russia has the strongest mathematics school. 

- What needs to be done to make domestic IT companies more visible in external markets?

- The strategy to promote Russian technologies abroad is of great importance. Here it is important to note that the truly tectonic changes in the geopolitical arena in 2022 have seriously affected the chain of marketing and distribution activities outside Russia. The markets of the US, Western Europe and other unfortunately unfriendly countries were closed to almost all domestic companies. At the same time, the markets of China, India, Latin America and other regions are still terra incognita, rather mysterious and unclear for many Russian IT players. To start working there, you need a systematic fine-tuning of the infrastructure and a comprehensive assessment of the prospects for a particular market. Our Centre for Global IT Cooperation is ready to help Russian companies to do just that.

The mission of our Centre is to increase the level and quality of participation of the Russian expert community in international IT cooperation through involvement in the activities of specialized international organizations and various IT communities. We conduct analytical studies and reviews of international experience, which, according to the audience, are very useful in terms of enhancing scientific and expert potential, work to strengthen the role of Russian IT companies and organizations in the relevant international formats, and develop partnerships in the IT sphere at the international and national levels. As part of our projects, we do manage to involve Russian experts in the work of such authoritative platforms as the International Telecommunication Union, the UN Internet Governance Forum, UNESCO, ISO and others.

In particular, in the incomplete two years of the Centre's work, our experts have prepared some 20 analytical reviews on a wide range of topics related to information and communication technologies and the digital world - from artificial intelligence technologies to online child protection. We research various IT markets and industry regulatory issues around the world. 

This year, the Centre has successfully arranged a number of important discussions, both on the margins of major Russian events like the Eastern Economic Forum and as part of its own representative roundtables for the IT community. They discussed the topics of technological sovereignty, import substitution, artificial intelligence (AI) regulation and ethics, the “onshoring” of foreign IT companies, and many others.

Now we are collecting proposals from the Russian expert community in order to develop a common position on the content of the Global Digital Compact, which is being worked on all over the world at the initiative of UN Secretary-General Guterres. The document is expected to be signed by United Nations member states in 2024 and will become the first ever universal set of rules for all players in the online space - states, the private sector, the scientific and expert community and civil society. We invite all interested organizations to contribute to the creation of this unique document.

The Centre is ready to become a partner in assessing market needs, in competent marketing “packaging” of proposals and to act as a conduit of opportunities and ideas of domestic IT companies in friendly countries to find there collaborations interesting for Russian IT companies.

- Which countries and regions are the most promising for IT companies from Russia? 

- There has been a lot of talk recently about the need to pivot to the East. This is indeed the right and pragmatic solution in the current circumstances. Nevertheless, I believe that sooner or later relations with states that are currently on the list of unfriendly states will normalize. Waiting and guessing when this will happen is a thankless task, and the important thing now is to create new partnerships with reasonable companies, for example in the countries of the so-called “Global South”: that is, in South America, Asia and Africa. The Centre believes that the most promising growth points are in Asian countries. That is why we pay special attention to IT clusters and high-tech parks in these countries and are expanding cooperation with them. Our new partners include representatives of the IT community of Russia's closest neighbors, Kazakhstan and Uzbekistan. They have a strong interest in our companies' IT products and a desire to work with us. In these states, like in ours, great attention is paid to the development of the IT industry. Uzbekistan, for example, is positioning itself as the future IT hub of the Central Asian region. So companies from Russia definitely have somewhere to scale their business outside of our country. 

- Where should Russian companies start when promoting to foreign markets? 

- One possible way is to take part in business missions, in which meetings are held with partners who are interested in a particular product from Russian companies. By talking face to face, people understand how useful they can be to each other, which areas of cooperation look most interesting and which products can be used for promotion. We believe that it is in the IT sphere that the role of business missions is still underestimated. 

Another promising project, in our view, in which the Centre is involved, is the “digital attaché” service. It is being implemented under the auspices of the Ministry of Digital Technology, Communication and Mass Media, the Ministry of Industry and Trade and the Russian IT Development Fund and is designed to help Russian IT companies entering foreign markets, as well as becoming the basis for regional and country-specific IT export support infrastructure. Along with leading industry companies, we became a partner of this unique professional development program and held a full training day for the first participants in October. A “digital attaché” should be well versed in the capabilities of Russian IT products, have sales skills, understand the specifics of the market in which he or she will work, and build long-term relationships with representatives of its business community and authorities. Accordingly, the key indicator of a “digital attaché”'s effectiveness will be an increase in the number of contracts for the supply of domestic solutions and products. During introductory lectures, we described the key contours of international cooperation in the field of information and communication technologies and examined the main features of work in foreign countries, particularly in Africa. 

In the near future, the first Digital Attaches are expected to be send to 17 countries, mostly in the “Global South”, and in 2023-2024 the list of countries of presence will be expanded. For our part, we also intend to step up work in this area and help create a “network of friends” of Russian IT companies abroad.

- Please tell us about the Centre's participation in the UN Internet Governance Forum (IGF 2022).

- The IGF is an annual forum that provides a global forum to discuss an impressive list of topics related to the development of the World Wide Web and digital technology in general. It has been held under the auspices of the UN since 2006 and this year will take place from November 28, to December 2, in the Ethiopian capital, Addis Ababa. Incidentally, the 20th anniversary edition of the UN Internet Governance Forum is scheduled to take place in Russia in 2025.

The IGF is unique in that it brings together representatives of a broad expert community: governments, business, science and civil society. 

Notably, the central theme of IGF 2022 will be the aforementioned Global Digital Compact, which will formulate “common principles of an open, free and secure digital future for all.” The Forum will discuss the prevention of Internet fragmentation, issues related to the protection of human rights online, how to bridge the digital divide, liability criteria for the dissemination of fakes and cases of digital discrimination. IGF participants will also address the issues of user data management and the regulation of disruptive technologies, including artificial intelligence. Taking into account the short time left before the document is signed, we hope that the IGF 2022 discussions will help the expert community and lay the groundwork for future “rules of the game” on the World Wide Web. 

The Centre will hold two sessions of its own at the IGF. One will be devoted to overcoming Internet fragmentation and the second session will deal with the formation of meta-universes.  

Generally speaking, for us the subject of Internet governance is one of the key tracks in our cooperation with international partners as well as in Russia. The Centre is a co-organizer of the domestic IGF format, the Russian Internet Governance Forum (RIGF), which was held for the twelfth time this year. The agenda of the Russian forum is based on the issues discussed at the IGF, of course, with a reflection of the Russian reality. In addition, in April 2022, the Centre organized the second Youth Internet Governance Forum (Youth RIGF). This is our signature event aimed at engaging young professionals in discussions about the future of the Internet, motivating them to gain knowledge in the field of ICT and promoting youth initiatives and start-ups. We will continue to hold our forum on an annual basis, especially as the interest of the target audience in it is noticeably growing. I am sure that such events will bear fruit not only in terms of the exchange of opinions and discussion with renowned industry experts, but also in terms of the implementation of “live” IT projects.