Evaluating Sourcing Locations: Destination Russia, St. Petersburg

Recent and multiple positive events in and about the Russian ICT Industry call for some reconsideration of the past evaluations of Russia as a sourcing destination. St. Petersburg is often mentioned as one of Russia’s prime technology centers, this thread is evidently present in the view offered by Ruslan Vasutin and Ekaterina Kosheleva (DLA Piper, St. Petersburg) in their recent article titled "IT Tax Incentives: in Search of an Economic Miracle" (The St. Petersburg Times). Their overview of the government-driven Tax Incentives programs sheds some light on the most recent trends of this actively developing industry:

"Software development in Russia may become especially lucrative in St. Petersburg. In addition to other advantages, such as the large number of technical universities (which, potentially, can serve as a base for R&D centers) and young specialists, as well as the lower cost of business operations, compared to Moscow, the authorities of the northern capital provide additional incentives specifically for IT-companies investing in infrastructure."

Brief city reference:
St. Petersburg is the capital of North Western Russia and is the second largest city of the Russian Federation. With its virtually 5M population in just the city area, St. Petersburg is a major economical and scientific center of the Baltic region. An air, sea, and ground traffic hub, St. Petersburg is the natural gateway to Europe (1 hour flight from Stockholm, couple hours flight from Frankfurt, just a taxi-trip away from Helsinki and other ICT centers of Southern Finland).

St. Petersburg is the hometown of the Russian National Software and IT Services Exporters Association - RUSSOFT. There are approximately 200 St. Petersburg-based IT Companies currently active on the market for offshore/ nearshore IT outsourcing services. Many major multinational ICT companies (Alcatel, Intel, Motorola, Siemens, and SUN heading the list) run their captive development and R&D centers in the city. This year, Fitch had upped its rating for the city to (BBB-).

Useful resources for visitors of St. Petersburg