Third Annual Survey on Russian Export Software Market

Reputation in professional circles

However, Russia's image in the world does not match the real achievements and capabilities of Russian software developers. Some authority has been gained in a fairly narrow circle of corporate clients. But the broad mass of software purchasers are more cautious about Russian developers, and sometimes downright negative.

Unfortunately, foreign media are dominated by negative information about Russia and the Russian economy. Often this information does not reflect the reality, and in any case has no direct relation to the software development industry. Changing negative attitudes to Russian goods - and specifically to programming products and services in software development - is not happening for several basic reasons.

Management at foreign companies opening development centers in Russia rate the qualifications of Russian programmers highly. However, these assessments are not reflected even in the specialist foreign press, never mind television, business and social and political publications. In the main, the assessments are only for the ears of Russian journalists and developers.

Individual firms, as a rule, also find it difficult to make their mark in the foreign press. In several cases this is due to the lack of a properly trained PR manager. However, in most cases Russian developers simply do not have the right to disclose information on successful conclusion of contracts and projects. Foreign clients often demand that their names not be disclosed, nor a project description. As a result, Russian companies have limited ability to achieve a deserved reputation abroad, and as a result to get new major orders and raise the price of their services. The necessary positive influence on Russia's image likewise does not happen.

Influence could also be exerted by Russian companies that have already achieved success on a global level with their ready-made solutions. However, as a rule they try not to draw attention to their country of origin. Such companies are afraid that Russia's current image, largely created by the media, will have a negative effect on sales. Therefore they are often represented abroad by subsidiaries and local partners, and the satisfaction of their product works for the image of that country, and not Russia. It becomes a vicious circle.

Another reason is the false impression created by the exaggeration abroad of the seriousness of problems that exist in Russia (although they undoubtedly exist, and will be covered more in section 6). These problems can be seen to a greater or lesser degree in almost all countries, but in some cases, for example, bribing officials is known as "corruption" and in other cases as "interest lobbying."

Russia has been through a tough time recently, as a result of an almost complete loss of control over processes happening in the country. State regulation is now being built practically from scratch. The activity of state organs is gradually returning to normal, although it is still a long way from ideal. However, it is far from ideal in economically developed countries, never mind other states known as developing into which Western companies are pouring money.

Applying the problem of corruption to software development is even more far fetched, when we consider that the export software development industry was not tied to the state, nor to the privatization of state property, nor to state orders.

There are various motivations behind exaggerating the problem of corruption. For example, in this way some foreign companies hold back the appearance of Russian competitors whose talent and high educational level could make possible breakthroughs in various technological areas.

Secondly, major companies already investing money into the Russian economy can maintain fear regarding how business is done in Russia, thereby reducing competition from other foreign companies for the country's resources (including labor resources).

Thirdly, Russians themselves love to talk about the problems of their country, although for the most part they are unable to compare them with the problems that exist in other countries. This also applies to IT company representatives.

Political and economic disagreements with Western countries also have some influence on Russia's image. If interests do not coincide, then everything Russian is painted in a poor light, or real achievements are passed over. Russia's ability to form public opinion abroad is as yet limited, for various reasons.

Political barriers between Russian and the Western world carry over into attitudes to software exporters. On a number of positions, the Western market is completely closed to Russian companies, who often end up banking on conditions in which they can sell only technologies, and not finished products, thereby losing the possibility to produce earnings from their own brand.

But if there are virtually no positive publications that attract Russian software companies' interests in the foreign press, the same cannot be said about information that has the opposite effect on Russia's image. For example, the World Economic Forum in March 2005 rated Russia 72nd globally by use of information technologies in economic development. A year earlier, in 2004, Russia had been ranked 10 positions higher. Although the subjectivity of our assessment makes it difficult to question Russia's low position, there are absolutely no reasons for the reduction in its rating.

Most vendors are actually seeing lively growth of the Russian IT market and a number of positive changes. For example, information systems are being actively introduced at small and midsize enterprises.

The WEF has only one official reason for reducing Russia's rating - the currently undecided problem of intellectual property rights protection. However, there has been no deterioration in this sector. On the contrary, vendors say the share of legal versions of programming products is gradually rising. Sellers of pirate products, if they are not afraid of law-enforcement agencies, are acting more cautiously. The problem is being solved, albeit very slowly. In addition, on other parameters included in the ratings, things are getting better more obviously. In other words, the rating reduction could mislead clients and dissuade them from doing deals with Russian companies. This is even more senseless given that regulation of software development outsourcing falls under contract law, and not under law on intellectual property.

Another negative factor regarding attitudes to Russian professionals and what they do was the publication in "The Times" of London about research carried out by the University of Ulster that attempted to produce a list of the "most intelligent peoples" using a selective definition of IQ. Russia came almost last in this rating.

The very existence of this rating, never mind the assessment of Russians' mental abilities, is principally incorrect. IQ tests reflect the subjective opinion of those who compile them about what people should know and how they should think. Therefore, such tests can in no way objectively reflect real cognitive capabilities. In addition, certain skills acquired over years are necessary to get good scores on these tests.

In Russia, however, test-assessed methods, most of which are being debated, are only now being introduced at educational institutions. In other words, most Russians have no experience of doing any tests, and least of all IQ. Whereas abroad this coefficient is often used when a new employee is hired, in Russia there is no such practice.

There is no basis for this low rating of Russians' mental abilities, nor for the country's low position in the WEF rating. Nevertheless, due to such publications, the country's image is not getting better. This can be fought against, but most likely without strong state support in this sphere it will be difficult to make fundamental changes. Russia and the Russian IT sector need to be defended in the eyes of global society.