According to Anastasia, a 24-year-old web designer from Moscow, the past nine months have been tumultuous for the Russian IT sector.

After the outbreak of war in Ukraine, her studio was forced to tighten project budgets and deadlines.

But by far the biggest change is a sense of uncertainty about the future.

“No one really knows what tomorrow will bring,” she said.

After three decades of quiet development, the IT sector is suddenly on the defensive.

Sanctions and the mass exodus of multinational corporations have eroded the industry’s access to foreign capital and technology.

And since the start of the conflict, tens of thousands of Russian IT specialists have left the country.

President Vladimir Putin has admitted that Russia’s IT sector will face “colossal” difficulties in trying to contain the effects of international sanctions.

At the same time, however, some industry insiders argue that the crisis could provide an opportunity for Russian tech companies to recapture the domestic market and reduce their technological dependence on the West.

In a world where advanced technologies predominate, the Russian IT industry’s ability to adapt to new realities is likely to be critical in determining whether Moscow can compete economically and militarily with the rest of the world in the long run. keep up.

The sector became alienated from the West almost overnight after the outbreak of the war in Ukraine in February.

The United States and 37 other countries imposed export controls restricting Russia’s access to strategic technologies such as semiconductors, microelectronics, telecommunications equipment, sensors, lasers and aircraft components.

The administration of US President Joe Biden has also blacklisted more than a dozen Russian tech companies and institutions.

Even measures not directly aimed at the IT sector have influenced the industry’s work.

Financial sanctions have made it difficult for IT companies to send or receive payments from abroad. Logistics sanctions have made it more expensive and complicated for foreign technology suppliers to ship their hardware to Russia.

A Kaspersky Lab employee works on computers at the company's headquarters in Moscow on July 1, 2017
Tens of thousands of Russian IT specialists have left the country since Moscow launched its offensive in Ukraine [File: Pavel Golovkin/AP]

All these difficulties, combined with the threat of reputational damage, led to a mass exodus of Western tech giants from Russia.

Some companies that have left Russia in recent months include Microsoft, IBM, Oracle, Intel, SAP, Cisco Systems, Adobe and Nokia.

Anastasia, who requested that Al Jazeera use only her first name to protect her identity, said that before the war, her design studio made “a lot of money” from projects for Western companies.

Their sudden departure has forced the studio to look for new sources of revenue, a difficult task given that Russian companies are not prepared to pay like the Western giants.

At the same time, Anastasia said, Russian specialists are gradually adapting to life under sanctions.

She explained that many companies can still access Western software through VPNs and pay for it with cards issued by foreign banks.

In other cases it was possible to replace Western systems with domestic alternatives.

“At first it seemed that everyone would leave and we wouldn’t be able to do anything, but we are finding ways to keep working and living like before,” Anastasia said.

Brain drain

Overcoming Western sanctions is not the only challenge facing the Russian IT industry.

The Russian Association of Electronic Commerce estimated that 50,000 to 70,000 IT specialists left the country in the first weeks of the war.

A lower figure was offered by Russof’s software developer association, which said about 40,000 IT workers moved abroad in the first half of 2022.

This wave of migration has raised concerns about the threat of a potential brain drain.

Even before the war, Russia’s IT sector lacked 500,000 to 1 million specialists to fully meet its needs, according to data from the Ministry of Digital Development.

The Kremlin has tried to halt the outflow of IT staff by offering new perks to stay, including deferrals from military service, exemptions from paying income taxes, preferential mortgage rates and additional funding for grants.

Valentin Makarov, head of Russof, told Al Jazeera that these measures have helped restore a sense of calm and stability.

Most of the companies he has contact with have not lost much staff.

The problem “is serious, of course, but not critical,” he said.

Makarov said most of the IT specialists who left continue to work remotely for Russian companies.

But a more pessimistic assessment was given by Anastasia, who said many of her colleagues and former classmates left the country after the war started.

“I often joke that I currently have more friends in Turkey and other popular immigration destinations for Russians than in Moscow,” she said.

Anastasia explained that the biggest driver for emigration was uncertainty.

Although the Russian IT community had long been more rebellious than the general public, the war was the first time that politics directly affected everyday life.

“What I keep hearing from my friends who have left is that they no longer feel safe in Russia,” she said. “The current nervous atmosphere is not conducive to work.”

Women look at a screen with the exchange rate at an exchange office in St. Petersburg
A screen shows the exchange rates at a bureau de change in Saint Petersburg [File: Dmitri Lovetsky/AP]

She says the government’s new benefits are insufficient to allay fundamental concerns about Russia’s long-term course.

She warned that the loss of these specialists could have serious negative consequences in the long run.

“We are not really feeling the effects of migration yet, but I suspect that the shortage of high-quality specialists will become noticeable later on,” she says. “Due to the departure of excellent specialists, there will be fewer great ideas and ambitious projects in the future.”

‘New technological order’

Can the Russian IT sector face these challenges and find ways to keep innovating?

The answer from some in the industry is an unequivocal yes.

At a press conference in Moscow last week with some of Russia’s most prominent IT developers, the panelists argued that the massive exit of Western tech giants has been incentivizing Russian companies to develop their own solutions.

They also argued that Russian companies not only had the potential to regain the domestic market, but also to make serious inroads into Latin America, Southeast Asia and the Middle East.

“The government and IT companies must make a decision: do we limit ourselves to replacing or supporting the software of departed Western companies, or is our goal to become a leader in an emerging new technological order,” said Makarov, that the discussion.

“Russia has proven that it can be a leader in information security and export technological sovereignty to other countries,” he said. “…We can use cybersecurity platforms to build and promote other Russian technology applications in the global market.”

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