The past nine months have been tumultuous for Russia’s IT sector, according to Anastasia, a 24-year-old web designer from Moscow.
After the outbreak of the war in Ukraine, his studio was forced to adjust budgets and project deadlines.
However, the biggest change by far is a feeling of uncertainty about the future.
“No one really knows what tomorrow will bring,” he said.
After three decades of quiet development, the IT industry has suddenly found itself on the defensive.
Sanctions and a mass exodus by multinational corporations have eroded the industry’s access to foreign capital and technology.
And tens of thousands of Russian computer specialists have left the country since the start of the conflict.
President Vladimir Putin has admitted that Russia’s IT sector will face “colossal” difficulties as it tries to contain the fallout from international sanctions.
At the same time, however, some industry experts argue that the crisis could present an opportunity for Russian tech companies to win back the domestic market and reduce their technological dependence on the West.
In a world where advanced technologies reign supreme, the Russian IT industry’s ability to adapt to new realities will likely be key in determining whether Moscow can keep up economically and militarily with the rest of the world in the long term.
The industry was cut off from the West almost overnight after the outbreak of war in Ukraine in February.
The United States and 37 other countries have imposed export controls that have restricted Russia’s access to strategic technologies such as semiconductors, microelectronics, telecommunications equipment, sensors, lasers and aircraft components.
US President Joe Biden’s administration also blacklisted more than a dozen Russian tech companies and institutions.
Even measures not directly targeting the IT sector have impacted the work of the industry.
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 providers to ship their hardware to Russia.
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 asked Al Jazeera to 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 firms.
His sudden departure has forced the studio to scramble to find new sources of revenue, a difficult task given that Russian companies are unwilling to pay like Western giants.
At the same time, Anastasia said, Russian specialists are gradually adjusting to life under sanctions.
He explained that many businesses were still able to access Western software through VPNs and pay for them with cards issued by foreign banks.
In other cases, it was possible to replace Western systems with domestic alternatives.
“At first it seemed like everyone would leave and we couldn’t do anything, but we are finding ways to continue working and living as before,” Anastasia said.
Overcoming Western sanctions is not the only challenge facing the Russian IT industry.
The Russian Association for Electronic Commerce estimated that between 50,000 and 70,000 IT specialists left the country in the first weeks of the war.
The Russoft software developers association offered a lower figure, saying some 40,000 IT workers moved abroad in the first half of 2022.
This wave of migration has raised concerns about the threat of a possible 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 stop the departure of IT staff by offering new benefits to stay, including deferrals of military service, exemptions from paying income taxes, preferential mortgage rates and additional funding for grants.
Russoft boss Valentin Makarov told Al Jazeera that these measures have helped restore a sense of calm and stability.
Most of the companies you are in contact with did not lose a lot of staff.
The problem “is, of course, bad, but not critical,” he said.
Makarov said that most of the IT specialists who left continued to work remotely for Russian companies.
But Anastasia offered a more pessimistic assessment, saying that many of her colleagues and former classmates left the country after the war began.
“I often joke that I currently have more friends in Turkey and other popular immigration destinations for Russians than in Moscow,” he said.
Anastasia explained that the biggest driver of emigration was uncertainty.
Although the Russian IT community had long been more oppositional than the general public, the war marked the first time that politics directly impacted their daily lives.
“What I constantly hear from my friends who have left is that they no longer feel safe in Russia,” he said. “The current nervous atmosphere is not conducive to work.”
According to her, the new government benefits are insufficient to temper fundamental concerns about Russia’s long-term direction.
He warned that the loss of these specialists could have serious long-term negative effects.
“We’re not really feeling the consequences of the migration yet, but I suspect the shortage of high-quality specialists will show up later,” he said. “The departure of excellent specialists means that there will be fewer big ideas and ambitious projects in the future.”
‘New technological order’
So can the Russian IT sector overcome these challenges and find ways to continue to innovate?
The answer from some in the industry is unequivocally yes.
At a press conference in Moscow last week with some of Russia’s top IT developers, the panelists argued that the mass exit of Western tech giants was spurring Russian companies to develop their own solutions.
They also argued that Russian companies had the potential not only to recapture 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 just replace or support the software of Western companies that are no longer around, or do we aim to become leaders in an emerging new technological order,” said Makarov, who led the discussion.
“Russia has shown that it can be a leader in the field of 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.”