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The Soviet past of Eastern Europe leaves it with technological nouse but business naivity

The ACM International Collegiate Programming Contest pits the world's finest computer science undergraduates against one another. Contestants are posed with eight mind-boggling programming problems, with the team to complete the most problems in the shortest time declared the winner.

In 2008, four out of the top five teams were from Eastern Europe. Three, including the overall winner, the St Petersburg University of IT, Mechanics and Optics, were Russian. One was Polish. The only other team to stand amongst them was from MIT – the world’s most prestigious scientific college.

For Peter Vaihinsky, vice-president of business development and marketing at Russian outsourcing provider Luxoft, this result is entirely consistent with what he sees as a natural proficiency at complex engineering among the former Soviet Union states.

“In the time of the Soviet Union, Russia was spending an enormous amount of money on the military-industrial complex,” he explains. That history has left a legacy of world-beating engineering colleges, he adds, as well as a technocentric national disposition.

That predisposes Russia and the former Soviet states to high-value, research-driven IT outsourcing contracts, says Vaihinsky. His own company, for example, has a long running contract with IBM to handle core product development for the computing giant’s mainframe range.

“You get very creative and interesting people from our technical colleges,” he argues, “because they teach the students about fundamental science, not applied, vocational skills.”

But the region’s Soviet history has another legacy – a lack of business experience and understanding. Businesses increasingly look to their outsourcing partners for innovation and strategy direction, both of which require deep domain understanding; however, most industries in previously communist Eastern Europe are in their infancy.

Furthermore, a formerly authoritarian nation may produce individuals with a ‘high power distance’, says Birkbeck University’s Dr Stephanie Morgan, meaning they expect to be told precisely what to do and may not be self-motivating.

However, as with all the major offshore outsourcing destinations, Eastern Europe is undergoing rapid cultural change. Any assumptions or prejudices developed during the Cold War must be challenged with first-hand experience and practical exposure.

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