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7 Oct 2019

IT Became Driver of Belarusian Economy: Denis Aleinikov comments on Forecasts of Industry Development

Source: naviny.by

The information and communication technology (ICT) sector has become a driver of the Belarusian economy. This industry is the main contributor to GDP growth in Belarus in 2019. What is the reason for this turn of events and what to expect next?

Speaking to BelaPAN, Denis Aleinikov, Senior Partner at Aleinikov&Partners, shared his views on the future development of the industry and the necessary changes, the interview is published at naviny.by (in Russian).

In January-August 2019, GDP growth in Belarus amounted to 1.1%. At the same time, almost 50% of the growth was provided by organizations operating in the information and communication sector.

Hi-Tech Park (HTP) is the core of the Belarusian ICT. According to official statistics, the average number of employees of the Park's residents in the first half of the year amounted to 47.5 thousand people and increased by almost 10 thousand employees compared to the same period last year.

In the first half of 2019, HTP residents’ services exports amounted to $908.1 million and increased by 38.1%. HTP exports are based on computer services, their export in the first half of the year increased by 31.7% to $843.8 million compared to January-June 2018.

Another $36.2 million was received by HTP residents in the first half of the year in the form of non-residents' fees for the use of intellectual property, which is 2.5 times more compared to January-June last year.

According to experts, the external situation is favorable for further growth of the IT industry in Belarus. By the way, about 90% of the Belarusian exports of computer services fall on Western countries.

“There is an active process of digitalization of the economy in Western countries. The developed, wealthiest countries are ready to spend tens of billions of dollars to finance this process. Accordingly, there is a high demand for programmers, engineers and other IT specialists, and thus the export of computer services in Belarus is growing by tens of percent annually,” Roman Osipov, Managing Partner of UNITER Investment Company, said.

As for the prospects of the IT sector, Roman believes that the education in high technology should be actively developed for the high growth rate of this industry.

In turn, Denis Aleinikov also notes that the future of the Belarusian IT industry, as well as the country's GDP, directly depends on the human resources potential.

“We approach the peak of exploitation of internal human resources in the IT sector both quantitatively and qualitatively. Yes, according to expert estimates in 2018, Belarusian universities can produce annually about 7.7 thousand specialists for the IT industry. But the HTP needs are already twice as high," Denis Aleinikov said.

“But that's not even the problem,” he added. “If we want to move to higher value-added projects, we need architects of IT solution with business intelligence who can come up with new IT products and create new innovative enterprises for the economy, rather than testers and coders.

Judging by the fact that Belarusian companies are actively seeking qualified personnel, the number of such specialists in the country is extremely limited. The idea of organizing an experimental university with the participation of Hi-Tech Park to prepare such specialists has been discussed for several years.”

“In my opinion, such a university should work using a "from talent to product" system. The student’s goal should be not so much a diploma as a startup or patent,” Denis Aleinikov is convinced.

Such universities have already appeared in developed countries.

“There are none in the CIS, Eastern Europe. If we create such a university, we will be the first in the region, we will attract talented young people from other countries of the region and, perhaps, as a result, will glorify our country with its innovative products,” Denis Aleinikov believes.

At the same time, the expert stresses that the work of such an applied university is impossible without funding for student research and startups at an early stage.

Other countries are developing a system for venture capital financing of technological startups, which is not yet the case in Belarus. Universities are creating endowment funds with the funds of successful entrepreneurs and interested organizations.

“They are intended to finance students' science and practical developments. Today Stanford University and other well-known foreign universities are developing with the help of endowment funds. And there are people in our country who are ready to help create the legal framework for this mechanism to work in Belarus,” Denis said.

By the way, the Ministry of Education with the participation of Hi-Tech Park has established a working group to develop endowment legislation. So, perhaps soon there will be financial backing for the development of an applied educational system in the country. Without it, it will be difficult to count on the emergence of new drivers in the economy.