The Belarusian Paradox
I have again been to Minsk early last month before to fly to France for Xmas (thus my lack of posting in December). After several new meetings in Belarus, it confirmed the particularity of the Belarusian ICT sector, especially linked to the international entrepreneurship issues; a particularity that I decided to call the Belarusian Paradox.
This paradox goes that way: how come in a country frozen in a stage of post-communism, highly bureaucratic, with a relatively poor service culture and having diplomatic rows with western neighbours, how come Belarus is so successful in exporting its IT services?
With an industry, which has already reached by mid-2005 over 100M USD of export (according to the government, a number which can be seen as under-estimated since many businesses do not declare fully or at all their income to the Belarusian administration) and forecasted by experts to be reaching 250 M to 400 M USD within the next few years, Belarus is the little India of Europe for the ITO market!
Partial answers can be found in several facts:
- A government keen on promoting an IST society and thus a strong ICT sector (this can be seen by several presidential decrees in recent years)
- A freedom of movement for people which allow easy international business links (although at a prohibitive cost)
- An historic country background of high-technologies and a high proportion high education graduate
However these factors are only structural and several issues could counter-effect them (such as the insufficient number of IT graduate nowadays or the relative high cost of the IT labour in the capital Minsk, higher than in the neighboring new EU member states, etc. ).
In my humble opinion 2 factors are key explanations for the successful Belarusian ITO sector:
- The local IT market was unattractive to the private sector due to very low contract / tender pricing from governmental/public projects (public sector still represents around 80% of GDP).
- A latent entrepreneurship spirit, which have succeeded to emerge truly because of lucrative global opportunity.
And thus the quite high rate of successful international entrepreneurs in Belarus (in ITO).
Saying that, these 2 factors are only partial explanations and I am still looking for more clues to explain questions such as is this unique to the ITO industry in Belarus (as it seems) and if so why?
This paradox goes that way: how come in a country frozen in a stage of post-communism, highly bureaucratic, with a relatively poor service culture and having diplomatic rows with western neighbours, how come Belarus is so successful in exporting its IT services?
With an industry, which has already reached by mid-2005 over 100M USD of export (according to the government, a number which can be seen as under-estimated since many businesses do not declare fully or at all their income to the Belarusian administration) and forecasted by experts to be reaching 250 M to 400 M USD within the next few years, Belarus is the little India of Europe for the ITO market!
Partial answers can be found in several facts:
- A government keen on promoting an IST society and thus a strong ICT sector (this can be seen by several presidential decrees in recent years)
- A freedom of movement for people which allow easy international business links (although at a prohibitive cost)
- An historic country background of high-technologies and a high proportion high education graduate
However these factors are only structural and several issues could counter-effect them (such as the insufficient number of IT graduate nowadays or the relative high cost of the IT labour in the capital Minsk, higher than in the neighboring new EU member states, etc. ).
In my humble opinion 2 factors are key explanations for the successful Belarusian ITO sector:
- The local IT market was unattractive to the private sector due to very low contract / tender pricing from governmental/public projects (public sector still represents around 80% of GDP).
- A latent entrepreneurship spirit, which have succeeded to emerge truly because of lucrative global opportunity.
And thus the quite high rate of successful international entrepreneurs in Belarus (in ITO).
Saying that, these 2 factors are only partial explanations and I am still looking for more clues to explain questions such as is this unique to the ITO industry in Belarus (as it seems) and if so why?
posted by Laurent Potet at
1/09/2006
1 Comments:
Hi Laurent!
During USSR's times there was a huge number of trained IT specialists and IT organizations in Belarus. This was a base for a present success. And IT labor cost is higher than in the neighboring new EU member states only for some last years due to a high demand for superb specialists and the insufficient number of IT graduates.
...I started my career during the dot com boom...what a wonderful time for belarusian IT business! :)
By
Pan Zavalnia, at 27 January, 2006 00:11
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