Alexander Egorov, Reksoft: With consistent state support, Russia’s IT industry can take 10–11% of the global market

Alexander Egorov, CEO of Reksoft and member of the board of directors of RUSSOFT NPP (a non-profit partnership), has told RIA Novosti that with consistent state support Russia’s IT industry can claim 10–11% of the global market. Earlier on Friday, the head of the non-profit partnership RUSSOFT, Valentin Makarov, told RIA Novosti that the organization has offered Maksut Shadaev, head of the Ministry of Communications, to meet and discuss a series of measures to improve the IT market, particularly on extending insurance premium privileges for development companies (currently companies pay 14% instead of 30%, but this privilege is valid until 2023) and improving the import substitution program. The date of the meeting between RUSSOFT and the minister has not yet been decided.

According to Egorov, the letter from RUSSOFT aims to establish communication with new government executives to ensure the continuation of state support programs which were previously discussed. According to RUSSOFT, exports of software and development services from Russia reached $9.6 billion in 2018, which is around 1.5% of the global market.

The expert believes that the Russian software industry has great potential and “with consistent government support, the industry really can claim 10–11% of the global market.” He is sure that “there a lot of prerequisites for this which are lacking in other sectors of the Russian economy.”

The head of Reksoft noted that in the People’s Republic of China the comprehensive state support program for technology companies is set up like a ladder, where every time a new rung is reached, the mutual obligations of the company and the state increase. He says that this has led to the appearance of companies like Huawei, Lenovo and Xiaomi. “In this context, the proposal to implement a 3% export compensation in the form of subsidies seems totally reasonable for continued state support for Russian developers. It is important to maintain dialog between the industry and the regulator, and that the programs are long-term, multidimensional and practical in nature,” he added.

The newspaper Vedomosti has noted that in its letter, RUSSOFT has requested the cancellation of VAT from software development services, a limit on the share of taxes in the expenses of innovation companies to 15% and the return of 3% of exports to developers in the form of subsidies.