Russia aims for outsourcing supremacy

4 April 2005 Russia has become the latest country to pitch itself as the ideal destination for outsourced corporate IT projects, promising businesses extensive legal and tax reforms as encouragement.

According to the Russian Ministry of Information Technology and Communications, the initiative will leverage Russia’s “historical technical superiority to become the main destination for global giants.”

Russia’s IT industry is currently enjoying a 25% annual growth rate, making it the nation’s fasting growing sector. The outsourcing industry itself is expecting to reach $2 billion in the next two years.

“Our vision is for Russia to become a global centre of innovation and entreprenurship, a place where radically new, break-though technologies are developed,” said Russia’s Minister of Information Technology and Communications, Leonid Reiman.

The Russian government is set to invest $650 million over the next five years in developing technology parks, and has promised tax breaks and legal reforms to encourage investment.

One problem the Russian IT sector may have to overcome before it can overtake India as the world leader in outsourcing contracts is the perception of the country as a hot bed of corruption, especially in the information technology domain.

Research by fraud prevention experts ClearCommerce found that 5% of online transactions in Russia are fraudulent, with that proportion rising to 25% for St Petersburg alone.

Last month, a man was arrested in Israel on suspicion of giving access codes for accounts held with the countries First National bank to the Russian mafia. The arrested man, an employee of the bank, claimed he had been blackmailed by Russian mafia agents to divulge the account access codes.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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