IT Firms Hope for 'Silicon Valley'
Software companies are eager to take advantage of the expected increase in government support for the IT industry and jump-start the developement of a high-tech park in St. Petersburg.
Jan 26, 2005
Software companies are eager to take advantage of the expected increase in government support for the IT industry and jump-start the developement of a high-tech park in St. Petersburg.
The association of Russian software developing companies, Russoft, announced last week that it was in the process of acquiring a space for the construction of a techno-park that would group existing IT resources in one place.
On the recommendation of the city's town planning and architecture committee, Russoft picked out a 2-hectare land in the Primorsky district, next to Udelny park, one of the fastest growing city residential areas. The land will be allocated to Russoft under a 49-year leasing scheme and require about $25 million in investment.
"We expect Russoft member-companies to be the main investors in the project," said Valentin Makarov, the association's president, via e-mail.
The techno-park concept envisages the construction of a modern research and office facility that will have the infrastructure and telecommunication networks necessary for the operations of innovative IT development companies, he said.
"Investor companies will become partial owners of the facilities, which will allow them to minimize office costs and also let them use the space as a possible loan guarantee," Makarov said.
Besides Russian companies, Makarov said he expects some of the $25-million investment to come from foreign companies already operating in Russia and looking to expand.
Over the last year, a number of large foreign corporations such as Intel, Motorola, and SunMicroSytems, as well as large Russian companies Epam and Luxoft, have set up Research & Development centers in St. Petersburg.
The hi-tech park project follows on the heels of a recent address by President Putin that urged the government to propel the development of the hi-tech sector in the country.
Up to ten technology parks are planned as " fully fledged market projects with tax breaks and reduced customs duties on imported equipment for the companies [operating within them]," Putin said at a meeting dedicated to promoting IT and manufacturing in the Siberian city of Novosibirsk on Jan. 11.
A law outlining the provision of tax-breaks for technology zones is expected to appear before the Duma by March.
"[Right now], the most obvious way the authorities could help is by allocating a land plot for the park without any investment ties; that would lower the initial expenses," Makarov said.
Mikhail Tsigankov, director of the city's Luxoft office, echoed the sentiment, saying that while providing tax breaks may be an important step in developing the industry, the country had a larger role to play.
"[Russia] continues to face the need to improve its image abroad. There is still a demand for experienced marketing specialists who could promote the Russian IT sector in the West and aid the creation of a stronger 'Russian' brand," Tsigankov said in an e-mail interview.
And a St. Petersburg techno-park has the ability to work in that direction if it succeeds in the goal of creating a common platform for the technology power-houses already operating in the city, industry insiders say.
Cooperation with the St. Petersburg State University of Information Technology, Mechanics and Optics on Vasilyevsky Island and St. Petersburg State University at Peterhof, has already shown positive signs.
"Techno-parks have a real possibility to develop the city's unique intellectual potential, as well as help to commercialize and market new inventions," said Dmitry Lisenkov, investment manager at the Russian Technology Fund, a city-based venture investment company with foreign capital.
However, the park's concept should have a competitive and a well-founded base, said Keith Silverang, the CEO of Technopolis, a technology centers operator in Finland.
"[The project's success] depends on more than money. It depends on how strong the concept is, beyond just creating buildings and facility services," Silverang said via e-mail.
"Without strong innovation discoveries, networking and entrepreneurship supporting the system you can end up with a bunch of expensive, half-empty buildings. The soft services are the key in the long run," he said.
St. Petersburg's software outsourcing industry is the second largest in the country, claiming a 19 percent market share of the country's $600 million software export sales last year, according to Outsourcing-Russia.com industry website.
The association of Russian software developing companies, Russoft, announced last week that it was in the process of acquiring a space for the construction of a techno-park that would group existing IT resources in one place.
On the recommendation of the city's town planning and architecture committee, Russoft picked out a 2-hectare land in the Primorsky district, next to Udelny park, one of the fastest growing city residential areas. The land will be allocated to Russoft under a 49-year leasing scheme and require about $25 million in investment.
"We expect Russoft member-companies to be the main investors in the project," said Valentin Makarov, the association's president, via e-mail.
The techno-park concept envisages the construction of a modern research and office facility that will have the infrastructure and telecommunication networks necessary for the operations of innovative IT development companies, he said.
"Investor companies will become partial owners of the facilities, which will allow them to minimize office costs and also let them use the space as a possible loan guarantee," Makarov said.
Besides Russian companies, Makarov said he expects some of the $25-million investment to come from foreign companies already operating in Russia and looking to expand.
Over the last year, a number of large foreign corporations such as Intel, Motorola, and SunMicroSytems, as well as large Russian companies Epam and Luxoft, have set up Research & Development centers in St. Petersburg.
The hi-tech park project follows on the heels of a recent address by President Putin that urged the government to propel the development of the hi-tech sector in the country.
Up to ten technology parks are planned as " fully fledged market projects with tax breaks and reduced customs duties on imported equipment for the companies [operating within them]," Putin said at a meeting dedicated to promoting IT and manufacturing in the Siberian city of Novosibirsk on Jan. 11.
A law outlining the provision of tax-breaks for technology zones is expected to appear before the Duma by March.
"[Right now], the most obvious way the authorities could help is by allocating a land plot for the park without any investment ties; that would lower the initial expenses," Makarov said.
Mikhail Tsigankov, director of the city's Luxoft office, echoed the sentiment, saying that while providing tax breaks may be an important step in developing the industry, the country had a larger role to play.
"[Russia] continues to face the need to improve its image abroad. There is still a demand for experienced marketing specialists who could promote the Russian IT sector in the West and aid the creation of a stronger 'Russian' brand," Tsigankov said in an e-mail interview.
And a St. Petersburg techno-park has the ability to work in that direction if it succeeds in the goal of creating a common platform for the technology power-houses already operating in the city, industry insiders say.
Cooperation with the St. Petersburg State University of Information Technology, Mechanics and Optics on Vasilyevsky Island and St. Petersburg State University at Peterhof, has already shown positive signs.
"Techno-parks have a real possibility to develop the city's unique intellectual potential, as well as help to commercialize and market new inventions," said Dmitry Lisenkov, investment manager at the Russian Technology Fund, a city-based venture investment company with foreign capital.
However, the park's concept should have a competitive and a well-founded base, said Keith Silverang, the CEO of Technopolis, a technology centers operator in Finland.
"[The project's success] depends on more than money. It depends on how strong the concept is, beyond just creating buildings and facility services," Silverang said via e-mail.
"Without strong innovation discoveries, networking and entrepreneurship supporting the system you can end up with a bunch of expensive, half-empty buildings. The soft services are the key in the long run," he said.
St. Petersburg's software outsourcing industry is the second largest in the country, claiming a 19 percent market share of the country's $600 million software export sales last year, according to Outsourcing-Russia.com industry website.