Belarus, with its state-controlled economy, seems an unlikely place to become Eastern Europe’s biggest IT accelerator. But like in any other country with a Soviet-era education legacy, there is an abundant supply of maths, engineering and computer science graduates.
So what do you do as the government that sits next door to Europe? You create your own IT ecosystem to reverse the country’s brain drain and service the EU economy at knockdown prices.
In 2005, Belarus set up its Hi-Tech Park, where companies can work without paying any corporate taxes. It is more than a business park; it is a physical representation of 164 companies – an entire IT industry – that makes sales of export-oriented programming industry more than US$1bn year. This amount exceeds revenues from all of the auto industry put together.
Programmers lured to the park have created world-famous applications such as Viber and the World of Tanks game, which played by more than 100 million people around the world.
But perhaps one of the reasons to drive the tech boom was the vision of the founder of the Hi Tech Park, Valery Tsepkalo. He served as Ambassador to the USA from 1997 to 2002 before spending twelve years building the largest IT cluster in Central and Eastern Europe. Exports increased 52-fold in that period.
“Our mission was to focus on helping young people – not just entrepreneurs – to have an idea, make their idea into a product, and create an ecosystem where they meet with the engineers and fulfill the idea,” Valery explains.
One unexpected twist was for an old Soviet skill that was brought into the modern world. The traditional education system has created a dearth of female philologists, who were employed by the government of the Soviet Union but were not needed in a free market economy.
They have turned their advanced language skills into becoming code checkers, bringing thousands of new jobs to the market. The Hi Tech Park has built a brain gain, with many talented young people remaining in Minsk, the capital of Belarus, on salaries of 3-4 times more than other industries.
It also offers Silicon Valley’s famous perks, with free lunches and playful office spaces that make work more fun and foster creativity.
What is next for the High Tech Park? It’s going into digital currencies, with the government moving to legalise this nascent industry. In December 2017, the Belarus Government became one of the world’s most favourable countries for cryptocurrencies, thanks to a decree allowing High Tech Park residents to offer services of crypto exchanges, use cryptocurrencies and tokens, and launch ICOs.
The decree actually leaves payment systems almost entirely outside the country’s regulatory system, adding Belarus to a few countries experimenting with a regulatory sandbox.
As for Valery, he has resigned from the park and now serves as advisor to Uzbekistan in developing its own High Tech Park. Made in Belarus, this model could spread across Central Asia and beyond.
Aziza is CEO of Smart Gov consulting bureau, specialising in transferring strategies and tools in public administration reform for the countries of the former USSR, Mongolia and Afghanistan.