06.09.2022

Export not import: Russian software eager to step out into the world

Export not import: Russian software eager to step out into the world

One the one hand, the withdrawal of Western companies from Russia provided domestic businesses with tremendous opportunities for both domestic promotion of Russian IT solutions and exploitation of export potential. On the other hand, the dependency on Western technology threatens to turn into the dependency on the Eastern one, since it will take years, if not decades, for the technology industry to catch up with the current level of technology development, while customers are not willing to be left without familiar solutions.

Considerable state and private business investments in the substitution of IT solutions used in Russia will likely lead to the development of dozens or even hundreds of new products and technologies, but how much time will it take? Are Russian solutions able to compete with the Asian ones, are those Russian companies that have long been providing the domestic market with new solutions ready to expand their horizons abroad, and have all companies been able to adjust to the change? These and other questions were raised on September 6, during the session “Promoting Russian Software: Opportunities in the Domestic Market and Export Possibilities” of the Eastern Economic Forum held in Vladivostok. 

When speaking at the session, Deputy Minister of Digital Development Maxim Parshin announced a new support measure for the Russian IT industry—a marketplace of domestic IT solutions, which had been launched the day before. It is supposed to become a kind of add-on to the long-standing register of Russian software, which already includes 14 thousand products. Currently, it is primarily used for public procurement, since only Russian software is allowed to be purchased for such purposes. Domestic software is also not subject to VAT. The register differs from the marketplace in that the former lacks product descriptions. The marketplace, by contrast, will allow to learn more about a product by reading its success story, getting details on its applications, and finding out what foreign products this particular software is able to substitute. At present there are around a thousand products provided with descriptions in the marketplace. Testing will take two weeks and be carried out behind closed doors. Then, the platform will undergo further improvements. And finally, it will be opened for everyone, Mr. Parshin informed. The deputy minister also added that Russian software had always remained competitive and had been in demand even before February 24, inter alia, in foreign markets. At the end of the day, Russia, along with the USA and China, is one of the three countries that develop in-house software for almost every field, from search engines and office suites to operating systems and solutions for information security.

In his speech the expert paid particular attention to the advancement of the service of digital attaches, which can contribute to the resumption of money transfers to foreign countries and the promotion of Russian software abroad. “The already mentioned marketplace has a good export potential, which can be used, for instance, by our digital attaches, who now start working in 17 countries. It will be one of their main tools. The second problem they [digital attaches] will have to solve is the resumption of money transfers to foreign countries under current circumstances,” Mr. Parshin noted.

This problem was also touched upon by General Director of Promobot, a robotics manufacturer, Maksim Chugunov. According to him, because banks do not want to be “subject to secondary sanctions,” they do not even try to process payments. “We received 60 % of revenue from exports for a long time. … There is a total of 43 countries where our products are in operation. Today we’re running into difficulties when transferring funds even in friendly countries—in the Middle East, in the Arab world, where people appreciate our products,” Mr. Chugunov stressed.

Meanwhile, Sber experts are concerned with the cybersecurity problem, since Russia is lacking tens of thousands of specialists in the field, Deputy Chairman of the Executive Board of Sberbank Stanislav Kuznetsov stated. According to him, one “does not go anywhere” without state support because it is precisely the state which creates the demand for talent. “Our estimates are rather distressing: in our country, around 5 thousand specialists are engaged in the field of cybersecurity. Today’s demand is twenty times higher than that,” Mr. Kuznetsov said.

The Eastern Economic Forum 2022 takes place on 5–8 September 2022 on Russky Island (Vladivostok). It is a key international platform for establishing and strengthening economic ties, primarily in the Asia-Pacific region. This year’s forum will bring together delegates from over 60 countries. “On the Path to a Multipolar World” is the main theme of the EEF 2022. The program offers over 70 business events, such as panel sessions, roundtables, televised debates, and business dialogues.