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Jul 31, 2008

Microsoft Corp: Russia to enter the top-5 list of IT countries by 2020

In June, Microsoft Corp held the “Innovations in development” conference in Moscow. The representatives of the world IT giant believe that Russia can claim 10–15% of the science-intensive world market and has all chances to be among the top 5 economies by 2020.

According to Microsoft, Russia’s economy today is in the middle of a transition period. The share of innovative businesses in Russia’s GDP is smaller than that in the GDP of developing countries: the IT sector is responsible for only 0,2% of Russia’s GDP (compared to 6% in India), and enterprises invest into corporate software less than they do in hardware.

Microsoft considers the development of intellectual potential to be a top-priority task for Russia.

“Despite the high level of scientific education in Russia, we still have to learn to bring together theory and cutting-edge technologies, as sometimes conventional teaching methods get in the way”, said Oleg Sutin, Head of Economic Development and Technologies at Microsoft Russia.

A separate issue is how to obtain the required funding. Although large companies are eager to invest into R&D, they seldom encounter smaller companies that are ready to embrace the new product. Daniel Ling, Corporate Vice President of Microsoft, listed the steps that Microsoft takes to encourage collaboration between businesses. Microsoft supports 11250 young companies by providing access to knowledge and technologies. Together with Intel and Russian Business Angels Association, it formed the Investment Technology Alliance. ITA has already launched 11 projects, and a project enabling knowledge exchange between 20 thousand professional developers.

Jury Frantsuzov, Director of Strategic Business Development of Intel Russia and Eastern Europe, pointed out that Russia spends 1,2% of its GDP on scientific research projects.

“This is in fact a significant amount of money. India and China allocate less than 1% GDP for scientific research. As R&D in Russia doesn’t exceed 3% of the market,” he said, ”science actually receives sufficient funding, and the problem is in business. In 2007, the country’s economy received 5 bln USD of direct investments, of which only 300 mln was invested into the hi-tech sector, and they are cutting down on funding Russian IT.”

However, the government plans imply that 20% of world brands will have Russian background by 2015. It is also expected that the contribution of the hi-tech sector to the Russian economy will increase up to 1,5% of GDP.

Although conference members pointed out a number of potential problems that may face Russian R&D sector, they were unanimous in their opinion that such progress is achievable. In their opinion, Russia can hope to cover 10–15% of the science-intensive world market, generating 120–180 bln USD per year.

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