IT In Belarus: From Electronic Computers To Cryptocurrency

Belarus is a country of blue lakes, beautiful women, and World of Tanks. And while it pains us to be reduced to a number of stereotypes, it’s hard to ignore the fact that IT became a part of the country’s image both inside and outside the borders.

We are a nation of fewer than ten million people that created Viber, MSQRD, MAPS.ME, PandaDoc, and Flo. We have the outsourcing giants contributing to thousands of products all over the world since the early 90s. According to Belarus President’s numerous speeches, Western media and even visitors of hip bars on Zybitskaja and Kastryčnickaja streetswe are the next Silicon Valley. 

How did we get so good?

To understand how Belarusian products ended up in the world tech charts and in the minds of all teenagers that love warfare a bit too much, we’ll have to go back to the beginning. 

The story goes that already at the times of the USSR, the Belarusian part of the country was known specifically for information technology. Two large tech-focused universities and the Research Institutes of Electronic Computers constituted the Belarusian IT hub and grew steadily until the Soviet Union collapsed. 

it sphere belarus htp coders outsource silicon valley

Credit: etobelarusdetka.com

Suddenly, the Soviet program for creating personal computers was closed down along with all the other programs. Many tech specialists left the field, which wasn’t that popular to begin with. However, the ones that stayed turned things around – in almost no time they partnered with IBM. Partnership with IBM is believed to have happened largely thanks to the Belarusian programmers that were behind it.

The West was interested in expanding its business to the markets of the former USSR, but it was due to the pressure, talent, and organizational skills of the locals that turned IBM’s attention to Minsk rather than Moscow. The same year, 1993, EPAM (stands for Effective Programming for America) was founded by two classmates that were eager to prove that Russian-speaking programmers can actually code.

Simultaneously, a number of tech teachers and students from a single university founded SaM Solutions – another outsourcing company that focused on the German market at its start.  In the following years, the companies grew, new ones were founded, many programmers moved abroad in search of a better life and business conditions. This is when the Belarusian government finally started paying attention to what was happening in the tech field.

In 2001, the presidential decree “On state support for the development and export of information technologies” was released and the Scientific and Technological Association Infopark was founded under the auspices of the BSU, the largest Belarusian university. The goal of Infopark was to create conditions in which it would be better for IT specialists to work in Belarus rather than abroad. 

Companies were freed from taxes on revenues, except for the income tax and contributions to the pensions fund. But again, this turned out to be just the beginning. 

The birth of Hi-Tech Park

One of the most influential figures in Belarusian IT history, Valery Tsepkalo, a Belarusian ambassador in the U.S until 2002, comes back to Belarus and becomes the president’s advisor on science and technology.

A person with a long diplomatic career and multiple university degrees, he has the idea for creating a Belarusian Silicon Valley and lobbies this idea to the president. Tsepkalo had very clear reasons for why it’s the Belarusian IT as opposed to any other niche that required a push. The services of Belarusian programmers were much cheaper than those from the West and the costs of market entry were minimal.

With little spending, and sometimes with no budget at all, it was possible to create products that had the potential to become global. Besides, the demand for IT specialists around the world was growing too quickly for the local American or European programmers to satisfy it.

it sphere belarus htp coders outsource silicon valley

Screenshot: dev.by

In 2005, Hi-Tech Park is created as the result of the Presidential Decree No. 12 “On the Hi-Tech Park” with Tsepkalo as its head. The goal is to create something similar to Silicon Valley, to attract investment, and to increase export.  The decree states that any company and any entrepreneur involved in the development, implementation, and export of information and communication technologies and software can join the Park, but they have to go through the selection process.

Residents can have an office in any location of the country and have the right to provide assistance to the Belarusian educational institutions. They also receive never-seen-before tax breaks. The Hi-Tech Park residents are exempt from all corporate taxes, including value-added tax and income tax. Individual income tax for employees of the resident companies has a fixed rate of 9% and is not included in the total annual income.

EPAM becomes one of the first residents of the HTP  – its founder supported the idea and implementation all the way. By the end of 2016, HTP had more than 160 residents and the annual growth rate increased by 119%. By 2017, computer software and services exports have evolved 49 times (from $21 million in 2006 to $1025.0 million in 2017). HTP became the largest IT cluster in Central and Eastern Europe and its success was reported by the leading international media

Where did all the programmers come from? 

Remember how I mentioned that IT wasn’t a popular field in the 90s? It really wasn’t. High school graduates would line up to study economics and law while programmers’ income was negligible

By the end of 2016, HTP alone employed 27,000 people. How did this happen?

As the demand for IT specialists grew, companies were doing everything in their power to attract and teach new specialists. In his interview, Tsepkalo tells that they went from school to school, talked to children and their parents explaining why IT is a promising field. Until the 2000s, he claims, IT was terra incognita for many. They had to break down what IT is and why it has a future. 

Strong cooperation between educational institutions and technology companies emerged: classes were held directly on the companies’ premises, allowing students to obtain practical IT experience. This is still a common practice. As of today, technology companies have set up 52 joint laboratories in 15 educational institutions.

The basis for creating thousands of IT specialists was also there: Belarus has one of the most accessible higher education in the world. It’s second out of 139 countries in the share of those who have completed higher and secondary education in the total number of school graduates. 

There were 68.4 thousand students in the year 2017-2018 that achieved technical (Science, Technology, Engineering, Math ) specializations – that is 24%. It’s also worth pointing out that Belarusian universities offer about 70 IT specialties and every year new specializations are introduced.

Decree of the HTP 2.0

In 2017, Tsepkalo was dismissed and the former adviser on ideology, Vsevolod Yanchevski, sanctioned by an EU travel ban and asset freeze for political repressions, electoral fraud and propaganda from 2011 to 2016, took his place. A wave of panic swept over the IT nation. 

BREAKING: Belarus Legalizes ICOs, Cryptocurrencies And Smart Contracts With Revolutionary Law

Yet, contrary to the expectations of the Belarusian IT community, the government continued to widen the possibilities for HTP residents, and in 2018, a “revolutionary” decree “On the Development of the Digital Economy” was released.  It fixed a special legal regime of HTP until 2049 and created a legal basis for the circulation of digital currencies and tokens based on blockchain technology.  

People eager to mine and do other exciting cryptocurrency-related things rejoiced. The number of those entering the HTP increased 10 times and the international publicity took Belarusian reputation to the whole new level.  However, it’s too early to judge the results of the “crypto-decree”. As Tsepkalo put it in one of the interviews, “So far, this trend, as well as the widely announced topic of unmanned vehicles, is still awaiting the start of its implementation”. 

IT in Belarus today

Today Belarus is among the top ten countries for IT-business friendly reforms as assessed by the World Bank – mostly due to the existence of the HTP and the crypto-decree.

it belarus hi tech park it sphere belarus htp coders outsource silicon valley

Screenshot: dev.by

Belarus is also among the world leaders in the volume of exports of IT services per capita – it’s $108. In comparison, in the USA this indicator is $58, in India – $40, and in China – $20.

it sphere belarus htp coders outsource silicon valley

Screenshot: dev.by

Ten Belarusian IT companies are included in the Software 500 list (ranking of the world’s largest software and services providers).

it sphere belarus htp coders outsource silicon valley

Screenshot: dev.by

Five Belarusian IT companies were among the leaders of the Global Outsourcing 100 in 2018.

it sphere belarus htp coders outsource silicon valley

Screenshot: dev.by

As of 2019, the share of the information technology sector in GDP is 5.5%. This isn’t bad, but it also doesn’t make Belarus special: this is smaller than in Estonia, Czech Republic, and Romania. The Belarusian growth rate is 20 times in 10 years – this is a lot, but, again, it’s the same as in Ukraine

The number of developers per capita is approximately at the level of Ukraine, Russia, and Poland, but noticeably lower than in the Czech Republic, Finland, Lithuania, and Estonia.

Keeping pace with the times

Belarus is a country of talent. Due to the existence of HTP and the government favoring the IT, outstanding specialists continue to work and develop their products in Belarus.

However, globally, the growth of the local IT sector is not that special or miraculous. It’s largely the result of the unprecedented pace of economic growth in the developed world that cause increased demand for informational technology. This means that, firstly, global scientific and tech community knows about Belarus and is willing to work with it, bringing more money into the country. Secondly, the IT-involved population of lives a different life from the rest of the nation.

They go to international conferences, speak English in the workplace, and earn on average four times more than the rest of the population. The image of an IT specialist still remains alien to both government and citizens. Namely, Alexander Lukashenko initially saw the idea of Hi-Tech Park as a toy that won’t harm anyone, as far as it does not require capital infusion.

Since then he repeatedly admitted that he doesn’t fully understand how IT works, but is willing to help as long as it does. Similarly, if you ask random people on Minsk streets, one will discover that they generally don’t know what programmers do, don’t like them for earning more than teachers and doctors, and some think they are useless as life was quite alright before all the computers. 

So perhaps, building the next Silicon Valley will require more time, but there’s no reason we won’t get there. 

Text by Alina Gorbatch