March 21, 2023

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While Russia sees tech brain drain, other countries hope for gains

While Russia sees tech brain drain, other countries hope for gains

VILNIUS, Lithuania (AP) – Technology workers in Russia are looking for safer and more secure career pastures.

By one estimate, as many as 70,000 computer professionals were horrified by the sudden frost In the business and political climate, the country has withdrawn since Russia invaded Ukraine five weeks ago. Much is expected to follow.

For some countries, Russia’s loss They are seen as a potential gain and an opportunity to bring new expertise to their high-tech industries.

Russian President Vladimir Putin has observed the brain drain even in the midst of a war that, according to the United Nations refugee agency, has caused more than 4 million people to flee Ukraine. Millions of others are displaced within the country.

Putin’s reaction this week To the immigration of tech professionals by approving legislation to abolish income taxes between now and 2024 for individuals who work for IT companies.

Some in the new broad group of high-tech exiles say they are in no hurry to return home. An elite crowd with EU visas moved to Poland or the Baltic states of Latvia and Lithuania.

A larger group of countries where Russians do not need visas has declined: Armenia, Georgia and the former Soviet republics of Central Asia. In normal times, millions of less skilled workers from those economically fragile countries migrate to the relatively more prosperous Russia.

Anastasia, 24, is an independent computer systems analyst from the Siberian city of Novosibirsk, Kyrgyzstan, where her husband has a family.

When we heard about the war on (February 24), we thought it was time to leave, but we might just wait and see. On February 25, we bought our tickets and left,” Anastasia said. “There wasn’t much thought to do.”

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Like all Russian workers contacted for this story, Anastasia requested anonymity. Moscow was cracking down on the opposition even before the invasion of UkraineStill, people living outside Russia fear reprisals.

“For as long as I can remember, there has always been a fear about expressing one’s views in Russia,” said Anastasia, adding that war and the “background noise of patriotism” made the environment more deprived. “I left one day before I started searching for and interrogating people at the border.”

Sergei Belgotarenko, head of the Russian Association of Electronic Communications, an industry lobby group, revealed the apparent brain drain last week.

“The first wave – 50,000-70,000 people – has already left,” Belgotarenko told a parliamentary committee.

Only the high cost of flights outside the country prevented a larger mass exodus. Belgotarenko predicted that another 100,000 technical workers may leave Russia in April.

Konstantin Senyuchin, managing partner at Untitled Ventures, a technology-focused venture capital fund based in Latvia, said Russian tech companies with international clients have no choice but to move because many foreign companies are quickly distancing themselves from anything related to Russia.

“They had to leave the country so their business could survive, or in the case of R&D workers, they were relocated by headquarters,” Senyuchen wrote in email notes.

Untitled projects assist with immigration; Senyuchen said the company had planned two trips to Armenia, carrying 300 technical workers from Russia.

Some neighboring countries are eager to reap profits.

Russian talent is poised for poaching. The 2020 Global Skills Index Report published by Coursera, a leading provider of open online courses, found that people from Russia scored the highest in skills proficiency in technology and data science.

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As soon as the war broke out in Ukraine, the Central Asian country of Uzbekistan simplified the process of obtaining work visas and residence permits for IT professionals.

Even before the incentives were announced, Anton Filippov, a mobile app programmer from Saint Petersburg, and the team of freelancers he works with moved to Tashkent, the Uzbek capital, where he grew up.

“On February 24, it was as if we had just woken up to this different terrible truth,” Filipov said. “We are all very young, under 27, and so we were afraid of being called into this war.”

As the in-demand tech workers explore their options, their communities are like a traveling caravan. Some countries, such as Uzbekistan, are chosen as starting points because Russian citizens do not need visas for short stays. But young professionals like Filippov don’t necessarily plan to stay where they first landed.

“If the conditions they find are different from those they were promised, they will simply move forward,” he said.

In many cases, entire companies are looking to relocate to avoid the repercussions of international sanctions. A senior diplomat from another Russian neighbour, Kazakhstan, made an outspoken plea this week for foreign companies to flee to his country.

Kazakhstan looks to high-tech investors with particular interest as the country tries to diversify its economy that relies on oil exports. In 2017, the government set up a technology park in the capital, Nur-Sultan, offering tax breaks, preferential loans and grants to anyone willing to set up shop there.

Uptake has been moderate so far, but the hope is that the Russian brain drain will give this initiative ample opportunity in the arm.

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The accounts of Russian companies are frozen and their dealings are not carried out. “They are trying to retain customers, and one of the opportunities is to go to Kazakhstan,” said Arman Abdurasilov, Chairman of the Board of Directors of Zerde Holding, an investment fund in Almaty, the business hub of Kazakhstan.

However, not all countries are so enthusiastic.

“Russian companies or start-ups cannot move to Lithuania,” said Inga Simanonet, an advisor to the Baltic State’s Minister of Economy and Innovation. “We are not working with any Russian company with possible relocation to Lithuania, and the ministry has suspended all applications for start-up visas since February 24.”

Security concerns and suspicions that Russians might spy or engage in malicious cyber actions abroad are making some governments wary about welcoming economic refugees into the country.

The IT sector in Russia is closely related to security services. “The problem is that without a very strong vetting process, we risk importing parts of Russia’s criminal system,” Lithuanian political analyst Marius Laurinavicius told The Associated Press.

Siniushin, managing partner at Untitled Ventures, urges Western countries to open their doors so that employers can take advantage of the extraordinary employment opportunity created by the war.

“The more talent Europe or the United States can extract from Russia today, the greater the benefits for these new innovators, whose potential will be fully realized abroad, to other countries,” he said.


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