For tech hub in Rus­sia, re­ces­sion’s a god­send Earn­ing power al­lows them to aim higher

Kuwait Times - - TECHNOLOGY -

Rus­sia’s econ­omy is in a quag­mire thanks to sanc­tions and low oil prices, but it’s a boom time for Mikhail Khor­pyakov. The 32-year-old, who de­vel­ops soft­ware for Rus­sian and for­eign clients, has seen his earn­ings rise over the last two years even as the coun­try fell into re­ces­sion and the na­tional cur­rency lost half its value. At the airy, well-lit of­fice he shares with friends in a newly built block in the thriv­ing pro­vin­cial tech hub of Voronezh, Khor­pyakov re­calls his last workspace was “in a base­ment, with noisy sewer pipes all around,” be­fore their earn­ing power al­lowed them to aim higher.

Khor­pyakov and his friends are part of an un­likely tech rev­o­lu­tion in Voronezh, a for­mer Soviet in­dus­trial town where star­tups and on­line con­tract work are prov­ing the only source of good jobs and es­cape from eco­nomic de­cline.

Big­gest for­tune

In fact, the cri­sis has turned out to be the tech sec­tor’s big­gest for­tune. As Rus­sia fell into re­ces­sion, the ru­ble’s nose­dive to record lows made tech work­ers here much cheaper for for­eign com­pa­nies to hire or buy from - let­ting them com­pete with tra­di­tional tech off­shoring hubs like In­dia and China.

Even as of­fi­cials in the United States and Europe warn about the threat posed by gov­ern­ment-backed Rus­sian hack­ers, tech work­ers in Voronezh say se­cu­rity con­cerns don’t af­fect their in­ter­na­tional busi­ness re­la­tion­ships.

Ivan Gr­ishaev, a 30-year-old soft­ware en­gi­neer, moved to Voronezh with his wife and son from Chita, a re­mote city in Eastern Siberia, in 2013. He chose Voronezh be­cause it of­fered bet­ter ca­reer op­tions, lower rent and warmer weather than tra­di­tional mag­nets for mi­grants such as Moscow or St. Peters­burg.

First he worked for DataArt, a Rus­sian soft­ware com­pany with more than 800 em­ploy­ees in Voronezh. But when the ru­ble’s value plunged, Gr­ishaev struck out on his own, work­ing di­rectly for for­eign clients. As well as fi­nan­cial ben­e­fits, the change also brought a more flex­i­ble work sched­ule, mean­ing he can col­lect his son from school. Now a self-em­ployed IT spe­cial­ist de­vel­op­ing web­sites for a Swiss firm, Gr­ishaev makes nearly twice as much as he used to thanks to the dif­fer­ence in lo­cal and Euro­pean salaries, and in cur­rency-ex­change rates. A qual­i­fied re­mote IT ser­vices provider work­ing for a Western firm can make $2,000-$3,000 per month. That is up to eight times the av­er­age salary for the lo­cal re­gion, and dou­ble what IT spe­cial­ists can earn work­ing for Rus­sian com­pa­nies in Voronezh.

“We’ve be­come less con­strained fi­nan­cially, could af­ford to have a sec­ond child, and now go on va­ca­tions abroad,” says Gr­ishaev.

Boast­ing sev­eral Soviet-era tech­nol­o­gy­fo­cused uni­ver­si­ties, Voronezh serves as an out­sourc­ing hub for many Rus­sian and for­eign com­pa­nies. Reach­able in six hours by car from Moscow - com­par­a­tively close by the stan­dards of the world’s largest coun­try - of­fice rent and salaries here are sig­nif­i­cantly lower than in the cap­i­tal.

Other rust-belt towns around the world, such as Pittsburgh in the US, have seen their lo­cal economies helped by a rise in tech com­pa­nies tak­ing ad­van­tage of cheap rents and ed­u­cated work­forces. But Voronezh stands out as an ex­treme ex­am­ple due to the enor­mous gains that the ru­ble’s drop gives tech work­ers com­pared with the rest of the lo­cal econ­omy.

“We pro­duce games for the Rus­sian-speak­ing CIS (for­mer Soviet) coun­tries, and make ver­sions for Europe and the US, which bring us rev­enue in for­eign cur­rency. Thanks to the ex­change rate, this rev­enue is even big­ger in rubles,” says Sergey Khatenkov, head of the Voronezh of­fice of Mail.Ru Group, one of Rus­sia’s largest in­ter­net com­pa­nies.

In 2006, Mail.Ru opened its Voronezh of­fice with five em­ploy­ees. Now it em­ploys 200 peo­ple and al­most en­tirely fo­cuses on de­vel­op­ing mul­ti­player on­line games. Some of the games de­vel­oped by Mail.Ru in Voronezh, such as Al­lods On­line, count tens of thou­sands of daily play­ers glob­ally and are one of the com­pany’s main sources of in­come. “Thanks to the (cheap cur­rency) we’ve sig­nif­i­cantly in­creased ben­e­fits for our em­ploy­ees,” says An­drey Shinkarenko, head of the Voronezh of­fice at Mu­rano Soft­ware, a USRus­sian com­pany whose busi­ness is en­tirely based on out­sourc­ing. “We’ve ex­panded their med­i­cal in­sur­ance to the fullest, or­ga­nized meals in the of­fice, that kind of thing.” —AP

VORONEZH, Rus­sia: In this photo taken on Thurs­day, Nov 24, 2016, soft­ware de­vel­oper Ivan Gr­ishaev and other pro­gram­mers from Deep Re­fac­tor­ing work at their of­fice. —AP

Mail.Ru’s his­tory

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