How Russia killed its tech business


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It has now been over a yr because the full-scale invasion of Ukraine started, with greater than 8,300 recorded civilian deaths and counting. The tech staff who left the whole lot behind to flee Russia warn that the nation is properly on its solution to turning into a village: minimize off from the worldwide tech business, analysis, funding, scientific exchanges, and significant elements. In the meantime Yandex, one among its largest tech successes, has begun fragmenting, promoting off profitable companies to VKontakte (VK), a competitor managed by state-owned corporations.

“It felt like my nation was stolen from me,” says Igor, an govt at VK who has household in Russia and requested that his title be modified so he may discuss overtly. When the conflict started, he says, he felt as if 20 years of Russia’s future had been taken away in a heartbeat.

In Russia, expertise was one of many few sectors the place individuals felt they might succeed on advantage as a substitute of connections. The business additionally maintained a spirit of openness: Russian entrepreneurs received worldwide funding and made offers everywhere in the world. For a time, the Kremlin appeared to embrace this openness too, inviting worldwide corporations to put money into Russia. 

However cracks in Russia’s tech business began showing properly earlier than the conflict. For greater than a decade, the federal government has tried to place Russia’s web and its strongest tech corporations in a decent grip, threatening an business that when promised to carry the nation into the longer term. Specialists MIT Know-how Assessment spoke with say Russia’s conflict in opposition to Ukraine solely accelerated the harm that was already being performed, additional pushing the nation’s largest tech corporations into isolation and chaos and corralling its residents into its tightly managed home web, the place information comes from official authorities sources and free speech is severely curtailed.

“The Russian management selected a very completely different path of improvement for the nation,” says Ruben Enikolopov, assistant professor on the Barcelona College of Economics and former rector of Russia’s New Financial College. Isolation turned a strategic selection, he says.

The tech business was not Russia’s largest, but it surely was one of many important drivers of the financial system, says Enikolopov. Between 2015 and 2021, the IT sector in Russia was accountable for greater than a 3rd of the expansion within the nation’s GDP, reaching 3.7 trillion rubles ($47.8 billion) in 2021. Though that constituted simply 3.2% of whole GDP, Enikolopov says that because the tech business falls behind, Russia’s financial system will stagnate. “I believe that is in all probability one of many largest blows to future financial development in Russia,” he says. 

The departures start

The temper was tense within the pink brick and glass-lined Yandex workplace in south Moscow on February 24, 2022, the day the Russian invasion of Ukraine started. Anastasiia Diuzharden, then head of content material advertising at Yandex Enterprise, was there—as have been a variety of others—however she says she noticed few individuals working. The constructing’s smoking space had 5 occasions extra individuals than regular. Some workers left the nation that very same day.

Because the information of the invasion circulated across the workplace, Diuzharden and her colleagues have been known as right into a “khural,” a weekly assembly. There, she says, Tigran Khudaverdyan, Yandex’s govt director and deputy CEO, reassured them that the corporate would proceed working. 



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