How Russia killed its tech business

How Russia killed its tech business

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 every part behind to flee Russia warn that the nation is properly on its approach to turning into a village: reduce off from the worldwide tech business, analysis, funding, scientific exchanges, and significant elements. Meanwhile Yandex, one in every of 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 government at VK who has household in Russia and requested that his title be modified so he might speak brazenly. When the warfare 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 folks 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. 

But cracks in Russia’s tech business began showing properly earlier than the warfare. For greater than a decade, the federal government has tried to place Russia’s web and its strongest tech corporations in a good grip, threatening an business that after promised to deliver the nation into the longer term. Experts MIT Technology Review spoke with say Russia’s warfare in opposition to Ukraine solely accelerated the injury that was already being carried out, additional pushing the nation’s largest tech corporations into isolation and chaos and corralling its residents into its tightly controlled domestic internet, the place information comes from official authorities sources and free speech is severely curtailed.

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

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

The departures start

The temper was tense within the crimson 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 and marketing at Yandex Business, was there—as have been a lot of others—however she says she noticed few folks working. The constructing’s smoking space had 5 instances extra folks than traditional. Some staff left the nation that very same day.

As 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 government director and deputy CEO, reassured them that the corporate would proceed working. 



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