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Technology

Brain drain from Russia: who profits?

In Russia there is a real brain drain in the IT sector, with many countries ready to take advantage of the "buying campaign"

April 1 2022
Gianluca RiccioGianluca Riccio
⚪ 5 minutes
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POST FP 700X500 2022 04 01T183213.765

POST FP 700X500 2022 04 01T183213.765

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It seems that Russian technology companies are looking for safer and more productive fields of operation: since the conflict in Ukraine broke out five weeks ago, nearly 70.000 IT specialists, frightened by the risks of economic and political crisis, have left the country. Others may follow.

Russian President Vladimir Putin himself noted the brain drain: this week he reacted to the dangers of exodus with a provision which eliminates income taxes until 2024 for those who work in companies in the IT sector.

There is no doubt that the deterioration of ties with Russia is catastrophic damage for all of Europe. Russia has a lot to lose by moving away from the West: Europe has a lot to lose by moving it away.

That said, there are also countries that see this as a potential gain: an opportunity to "buy" high-tech experts into their companies.

How many Russian brains are there?

brain drain

Sounding the alarm about the extent of this apparent brain drain is Sergei Plugotarenko, the head of the Russian Electronic Communications Association, an industry lobbying group.

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"The first wave - 50.000-70.000 people - has already started," Plugotarenko told a parliamentary committee.

Only the high cost of flights out of the country prevented an even larger mass exit. However, another 100.000 tech workers could leave Russia in April, Plugotarenko predicts.

Konstantin Siniushin, managing partner of Untitled Ventures, a technology-focused venture capital fund based in Latvia, says Russian tech companies with international clients had no choice but to relocate, as many foreign companies are hastily moving away from anything Russia-related.

They had to leave the country so their business could survive or, in the case of R&D workers, they were relocated from headquarters.

His Untitled Ventures is helping the transition: the company has charted two flights to Armenia with 300 tech workers from Russia on board.

Some neighboring countries are eager to reap dividends.

Who profits from the Russian brain drain?

Many of these Russian "high-tech exiles" are in no rush to return to their homeland. A small group of Europeans with EU visas have established residency in Poland or the Baltic states of Latvia and Lithuania.

Armenia, Georgia and former Soviet republics of Central Asia they are among the countries where Russian citizens do not need visas. For those wondering, there is also the opposite flow. Millions of people, sometimes a little less skilled, regularly flee economically fragile nations such as Armenia, Georgia and Central Asian states to a relatively richer Russia.

Russian talents, of course, are the most coveted. A report on the Global Skills Index reveals that they generally score among the highest for skills in technology and data science.

This is why the hunt has begun

Tashkent brain drain from russia
Tashkent

Ready go, the first shots had just gone off when the Central Asian country ofUzbekistan has dramatically simplified the process of obtaining work visas and residence permits for IT professionals.

Anton Filippov and some of his fellow programmers from St. Petersburg moved to Tashkent, the Uzbek capital, even before the incentives were made public. "We are all young," says Filippov, "we are less than 27 years old, and therefore we were afraid of being called to fight".

Even Uzbekistan, however, is itself a stepping stone to other shores.

For example, to stick around, there would be Il Kazakhstan. The country looks with particular interest to high-tech investors as it seeks to diversify its economy, now based solely on oil exports. In 2017, the government established a technology park in the capital, Nur-Sultan, and offered tax breaks, soft loans, and grants to anyone willing to open a shop there.

Adoption has so far been moderate, but the Kazakh hope is that the Russian brain drain will give a big boost.

Not all countries are so anxious, though

Security concerns and suspicion that Russians may spy on or commit cybercrime abroad make some governments wary of welcoming the country's economic refugees.

"Russian companies or startups cannot move to Lithuania", he says Inga Simanonyte, advisor to the Minister of Economy and Innovation of the Baltic nation. "We do not cooperate with any Russian company and the ministry has suspended all startup visa applications since February 24".

The IT sector in Russia is closely related to security services. The problem is that without an extremely strong control process, some governments fear the risk (probably exaggerated also by some form of prejudice) of importing parts of the Russian criminal system.

However, whatever the extent of the Russian brain drain, whether they choose to stay home or move to Europe (or the US), there is always a need for talent. The more talents can operate, the greater the benefits that innovation can bring to the planet.

Tags: russia-ukraine


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