It is not widely known, but many mobile phones, cars and airplanes run software made by a Russian technology company, writes BNE. This company is Luxoft, valued at $684 million during its IPO in 2013, and a leader in an industry where Russia excels. Despite the momentary economic difficulties in Russia, Luxoft expects further growth in 2015, and its main markets remain in the US and Germany where it does around half of its business. This example highlights the potential of the tech sector in rejuvenating the Russian economy.
In fact, speakers at this year’s annual Gaidar Economic Forum in Moscow suggested just as much. Exporting technology products, according to businesspeople interviewed by RT, will be one of the engines which will fuel the Russian economy’s successful recovery. Russians are often highly educated in the sciences, they have an interest in getting hold of the latest technology and, as BNE points out, the country already has more internet users than anywhere else in Europe. The outlook for Russia’s flourishing technology industry is particularly promising when one considers that only half of Russia’s internet users shop online (in contrast to the UK’s 80%).
At the Forum, prominent investors including Ernst & Young, as well as players from China (where Alibaba has been the beneficiary of much of Russia’s e-commerce growth, as the country’s largest online retailer), stated that they have no intention of abandoning Russia as a destination for investment, noting that they had witnessed far less favourable investment circumstances in the past than those currently facing Russia.
The current crisis is not merely something to be endured with gritted teeth, but should be seen as a way to transform the old focus of the national economy. There are increasing signs that government-mandated investment in technology is set to increase.
The tech sector will be one to watch. As well as providing an effective way of speeding up progress out of the current situation and increasing exports of technologically-based entities, it will lay a solid foundation for future growth. Westerners could even find themselves becoming much more aware of Russian technological expertise and laud that which helped to make their phones and cars.