On 6th September 2022, within the framework of the Eastern Economic Forum 2022, a session “Promotion of Russian software: domestic market opportunities and export prospects” was held. Valentin Makarov, President of RUSSOFT, was one of the speakers.

Starting the conversation, Evelina Zakamskaya, a TV presenter of the Rossiya 24 TV channel, noted that after the events of February 2022, the IT industry faced “unprecedented challenges and the same unprecedented measures of state support: tax preferences, support for IT specialists, measures to promote Russian software”.

Valentin Makarov noted that the sanctions gave the Russian IT business a boost to develop:

“When large international companies had to follow the primary and secondary anti-Russian sanctions, manufacturers of platform solutions and individual software products left the Russian market. And we had to replace them, which seemed difficult at that time.

It is important to note that import substitution occurs most effectively when replacing not a single product or solution, but a whole stack of software. An enterprise cannot simply take one product from the registry of Russian software to replace a foreign one. In this case, there is a high risk of software incompatibility or a decrease in the efficiency of the entire IT system. Therefore, it is necessary to replace the entire stack. To do this, a company has to have experience in integrating products into a single system so that they are compatible and work effectively. This is the task not only for vendors – manufacturers of specific products, but also for an integrator who can refine the links between them.”

The most important thing in this process is that the accumulation of experience in building full stacks of industry software leads to the formation of platform solutions — this is a fundamental change in the goal-setting of Russian software developers. To do this, it is necessary to complete the import substitution of individual products and proceed to the formation of Russian platforms that will be able to replace entire stacks on both domestic and global markets:

“Exports in 2021 amounted to about $9 billion and almost formed half of the total sales of the Russian software development industry. With the initiation of sanctions, work in developed markets became impossible or was seriously hampered. Exporting companies from Russia were forced to quickly enter emerging markets. There are few specialists in these markets who are able to implement not only platforms, but also individual software products. They need entire IT systems. Therefore, for success in the global market, we need integrators who are able to build platform solutions, and government support mechanisms are needed for their implementation.

In friendly countries, the opinion is clearly visible that Russia has shown itself to be a leader in opposing the technological dominance of the United States, which can replace foreign products that reigned all over the world – and it is necessary to unite with such a leader in order to ensure technological sovereignty for itself. Our main partners here are China and India. But other countries of Southeast Asia, Latin America, and Africa are no less important.”

Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation, also presented at the session. He spoke about tax benefits, grant and credit support for the IT industry, as well as about a new tool – the marketplace of Russian software solutions, which is currently being tested together with industry representatives. This platform will be an addition to the register of domestic software, but it will be important not only in the domestic market, but also on the world stage:

“Now new opportunities are opening up for Russian software, which previously successfully competed in the market with foreign software. In all areas of development, we have at least one product that is ready to replace companies which left the Russian market. We are ready to offer the same solutions as part of the development of export potential through digital representatives who are already working in 17 countries.”

Dina Gaizatullina, Deputy Director General for Interaction with Public Authorities of the Innotech Group and Coordinator of the RUSSOFT GR Committee, also spoke at the session. In her speech, she focused on the promotion of domestic IT developments and the support of the state in this process:

“The demand for domestic IT solutions is growing. It is important for manufacturers who are developing new software products to pay special attention to their promotion. We are grateful to the state for the opportunities open to us and are actively working with the proposed support measures. Their successful implementation will be facilitated by an open dialogue between business and customers in the face of industry leaders, which is now taking place on the basis of the industrial competences centers.”

The session was attended by:

• Stanislav Kuznetsov, Deputy Chairman of the Board of Sberbank, spoke about the situation with cybersecurity and the directions of the necessary development of this sphere
• Alexander Pavlov, CEO of RFRIT, shared data on grant support measures for IT companies and presented a new tool – compensation of marketing costs for promoting developments on the Internet in the domestic market
• Andrey Samokhin, Chief Managing Director of VEB Group.The Russian Federation, mentioned the culture of knowledge about domestic products among the population and joint projects in the IT industry.

Valentin Makarov also spoke at the session “The Great Eurasian Partnership: Ways of Economic Development”. The main topic was the turbulence of the geopolitical situation and the actual reshaping of economic ties and geopolitical realities that need to be taken into account in the relations of countries within the framework of integration in the Eurasian space, as noted by the moderator, Mikhail Petrov, Deputy Director General, Russian News Agency “TASS”.

As part of his speech, Valentin Makarov stressed the role of sanctions as an impetus for unification and development of cooperation in the Eurasian space. According to the President of RUSSOFT, there are still 5-10 years to determine the leaders of the markets of the New technological paradigm.

The interaction between Russia, China, and India can be considered not only as a partnership to achieve technological sovereignty, but also as a process of forming the joint potential necessary to become a world leader in the implementation of cyber-physical systems and gain a competitive advantage in the New technological paradigm.

To achieve this advantage, countries need to undergo some changes in their vision of IT and software development:

1. To reach a fundamentally new level of security, which will allow Regulators in different countries to implement cyber-encryption systems. This new level of security requires the application of new physical principles, such as those used in quantum cryptography.
2. Create a unified information and cyber security infrastructure to ensure the operation of cyber-physical systems on the territory of the whole (or most of it) Eurasian Space
3. To develop a general regulatory and technical regulation for the use of cyber-physical systems in Eurasia
4. To use digital financial assets to reduce costs, increase the security and transparency of financial transactions (now Russia has a unique chance: together with China, India, Vietnam, and other Asian countries to create a unified payment system based on blockchain technology, independent of SWIFT and any third-party regulators)
5. To change the business model in the region, to leave the dominance of profit as the main success factor, to equalize the level of technology development in all countries of the region to the level of leaders through technology transfer and training.

Other speakers of the session also spoke about the future and development of partnership in the Eurasia:

• Kirill Barsky, Acting Head of the Diplomacy Department of MGIMO University under the Ministry of Foreign Affairs of Russia
• Alexander Vedyakhin, First Deputy Chairman of the Board of Sberbank
• Dmitry Volvach, Deputy Minister of Economic Development of the Russian Federation
• Maxim Protasov, Head of “Russian Quality System” (Roskachestvo)
• Andrey Slepnev, Member of the Board (Minister) for Trade of the Eurasian Economic Commission
• Alexander Shokhin, President of the RSPP

At the session “Strategic Technological Alliances – a new imperative for business cooperation in Eurasia”, which was moderated by Andrey Bezrukov, President of the Association for the Export of Technological Sovereignty, Valentin Makarov became one of the experts and expressed his opinion on the development of the IT industry and the New technological paradigm:

“We are at a critical stage in the development of the world economy, in the period of transition to a New technological paradigm. Alliances will play an important role in it, which will be able to solve the global task of moving from automated systems for managing critical processes and infrastructures to cyber-physical systems. Major Eurasian countries, including Russia, can unite and become leaders of this process, if, of course, they can offer the world an alternative and more effective model of economic organization than capitalism. The experience of the Soviet Union’s interaction with developing countries gives Russia an important advantage in building this model.

It is also important for our country to increase the role of IT industry exports in the country’s policy. RUSSOFT recently handed over to the Ministry of Digital Development a roadmap for the development of software exports. In it, we noted that the export of IT should be included among the priorities of the national program “Digital Economy”. By combining Russia’s export potential with major Asian countries, together we can become leaders of a New technological paradigm.”