EY: Belarus’ IT Scene Is Thriving

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Over 90 per cent of the $956.8 million Belarusian IT market is external and involves exports. In 2016, the share of IT exports, in the country’s total exports of goods and services, accounted for 3.25 per cent, up from 0.16 per cent in 2015, according to EY’s ‘The IT Industry in Belarus: 2017 and Beyond’ report.

“With the IT industry demonstrating vibrant growth, we see an increasing level of interest in local IT companies from [firms] outside the country,” says Pavel Laschenko, managing partner at EY Belarus.

“The global technology community has its eye on the fast growing Belarusian technology talent and intellectual capital. The High Tech park is well known globally and more and more multinationals are opening R&D centres [in the country],” says Noam Canetti, senior partner and technology sector leader at EY Israel.

Currently, the ICT sector has a workforce of over 85,000, including some 34,000 in the IT products and services segment. EY estimates that another 30,000 IT specialists are employed in sectors of the economy other than ICT.

The entire IT sector accounts for 5.1 per cent of the country’s GDP. Belarus is home to internationally recognised software brands: Game Stream, Apalon, Vizor and MSQRD. Successful companies are usually bought by foreigners, but operations remains in the home country, the report says. That is what happened to MSQRD, the mobile application, which creates animated masks and lays them over human faces, and which was acquired by Facebook in 2016. All these things considered, foreign direct investments, in 2016, were consistently on an upward trend, reaching $169.2 million.

The high level of the education system and competitive salaries constitute the basis of this successful growth. Belarusian universities provide good technology-related studies and the average salary is higher than other sectors of the economy. According to the report’s data, in 2016 the average monthly salary was about $400, while in the ICT sector is was around $1,800. There is no brain drain in Belarus. On the contrary, highly competitive salaries are able to attract a qualified workforce, not only from Belarus but also from other countries.

However, education is a double-edged sword. Ernst & Young estimates that one of the biggest challenges companies face is the stiff competition for qualified specialists and their rising costs for companies. In the current conditions, we foresee further growth in the salaries of IT specialists over the next few years, but despite this growth, the cost of the services provided by Belarusian IT companies remains quite competitive, compared with other companies in Eastern Europe, the report says.

Read more about the Belarusian IT sector in Emerging Europe’s Outlook on Belarus 2016.