Russia Seen as Next Global Outsourcing Leader

MosNews.com, April, 2005
(http://www.mosnews.com/money/2005/04/04/outsourcing.shtml)

Russia is poised to become the world’s next leader in computer programming outsourcing, as its IT industry demonstrates dramatic growth and the government is set to approve an initiative that would further put it on an accelerated development track. The initiative will systematically push Russia’s historical technical superiority to become the main destination for global IT giants, PRNewsWire reported.

The Russian IT sector has demonstrated 25 percent annual growth and software exports have been growing at 40-50 percent annually over the last few years. With such growth figures the IT industry is already outpacing every other sector of the Russian economy. More than 250 companies are already active in offshore software development and Russia’s outsourcing industry is expected to reach $2 billion over the next few years.

The Russian government has proposed the creation of a national network of technoparks and free economic zones that would strive to replicate the success of India’s Bangalore and Hyderabad. Comprehensive tax and legal reform are also offered as part of the initiative. In addition the authorities are committing $650 million over the next five years to supplement the increasing flow of private investment.

Many global giants, such as Intel, Boeing, IBM, Cisco, Motorola, Dell, Siemens, Microsoft and Hewlett Packard have already established their presence in Russia, opening software development centers to benefit from the strong presence of talented programming and engineering staff.

Russia’s Communications Minister Leonid Reiman, quoted by the agency, said: “Our vision is for Russia to become a global center of innovation and entrepreneurship, a place where radically new, breakthrough technologies are developed. We want Russia to be a place where ’the next big thing’ is born.”

The Russian government’s big plan will be first put up for foreign public display at the 8th Annual Russian Economic Forum set to take place in London on April 10-12.