It’s difficult to say that the current state of affairs in Russia is magnificent: the economic crisis, domestic political tensions, sanctions and unpredictable international policies should alarm anyone who plans to have business relations with Russian companies. However, how dangerous are the risks? Have not new opportunities in offshore development opened?
Among all the risk factors the following could be named:
- Sanctions. As we all know, since 2014, due to its aggressive international policies, Russia has been subject to political sanctions, which limit possibilities for international cooperation. However, there is not one company in the IT industry that is subject to the sanctions, and this is no accident. The sanctions target organizations that are affiliated with the government and traditionally, the governmental share in Russian IT companies is minimal
- Unfavorable business climate. The government tends to put economic emphasis on state-run companies rather than on the private sector. Combined with virtually no separation of power and complete control over the executive branch, the government can essentially do whatever it wants with any company. For business, this represents a very serious problem. However, for the IT industry this issue is less poignant – officials are cautious of new technology that they aren’t familiar with and do their best not to be affiliated with IT. Otherwise, the smaller a company is, the lesser the likelihood that it will be “noticed.” In the worst-case scenario, the owner of a company that you work with will be replaced. Truthfully, the new owner will most likely lack basic knowledge of business and IT.
- Unstable domestic political situation. Unchanging leadership, social tensions and economic hardships may lead to causes for unexpected (and likely negative) internal processes, beginning with the emigration of Russian specialists to other countries and ending with large-scale political crisis. The undesired consequences of such a situation will be that your contractor won’t be able to provide services of adequate quality and he will be unable to fulfill previously set obligations
- Aggressive international policy. Relations between Russia and western countries have reached a cooling point. If the situation becomes even worse or dangerous, then working with Russian companies will become more difficult. Setbacks could vary from the introduction of administrative barriers and the increase of tariffs to dramatic limitation of internet access.
Now, the state of affairs has changed: Russian developers are better able to compete with those from other countries in the international market, which they could not do before. Here’s why:
- Cost. In 2014, the exchange rate was 35 Russian rubles for 1 dollar. In 2016, it rose to 75 rubles per dollar. This means that the services of Russian companies in 2016 became more than twice as cheap as they were two years ago.
- Quality. The difficult economic situation and unstable exchange rate make the prospects of working in the international market much more appealing than solely working in the Russian market. This means that even for the same salary as before, it will be more beneficial to work for a company where the salary is tied to a stable currency. In turn, this raises competition and allows such companies to work exclusively with the best specialists.
- Motivation. It’s not a secret that the Russian IT community is more pro-West than Russian society in general. Recent events have caused the majority of specialists to change their priorities. If they previously worked in the Russian market, they are now shifting their attention to the international market at a rapid pace. This means that developers in Russia see work abroad not only as a source for stable income, but as a potential opportunity for their own personal development.