IT Regulation in Russia: 5 Key Aspects by 2024

Contents:

• Russian support for the IT industry: new horizons
• Prohibitions and coercion of the authorities: what awaits the IT sector?
• Why did the IT sector become part of the Constitution?
• The goal of the Digital Economy program
• Long-term goals and current situation
• Components of the Digital Economy program

Russian support for the IT industry: new horizons

As of autumn 2023, approximately 2 million specialists work in the information technology sector in Russia, which is approximately 3% of the total number of employed in the country. This fact highlights a significant personnel shortage in one of the most important and dynamically developing sectors of the economy. The growing demand for IT specialists requires attention to issues of education and professional training, which can contribute to an improvement in the labor market situation.

According to research by the Higher School of Economics (HSE), the demand for IT specialists continues to increase even in the context of economic difficulties caused by the pandemic. Experts note that the shortage of qualified personnel is one of the main barriers to the sustainable growth of the IT sector. It's important to note that the development of technology and digitalization creates new opportunities for professionals in this field, making them even more in demand in the labor market.

The situation on the IT labor market has become particularly tense since 2014. The increased outflow of specialists abroad, as well as the formation of in-house IT teams by large companies, have significantly changed the landscape. This has led to increased competition among employers and higher salary expectations. In this environment, companies must adapt to these new realities to attract and retain qualified specialists.

To address the shortage of personnel in the IT sector, the Russian government has decided to significantly increase the number of state-funded places in IT specialties. Deputy Prime Minister Dmitry Chernyshenko noted that the number of state-funded places at universities is planned to increase by 2.5 times by 2024. This decision is aimed at training qualified specialists capable of meeting the growing demand for IT personnel in the country and contributing to the development of the digital economy.

In the 2023-2024 academic year, the number of state-funded places in IT specialties will increase to 100,000, which is 25% more than the previous year. This category includes areas such as "Computer Science and Engineering", "Electronics, Radio Engineering and Communication Systems". The increase in the number of state-funded places in the field of information technology underscores the growing demand for qualified specialists and the development of the IT sector in the country. This creates additional opportunities for students and contributes to the development of highly qualified personnel necessary for an innovative economy.

The state will allocate funding for advanced training courses for teachers and methodologists of colleges and universities. Training will be held at Innopolis University, which has established itself as a leading center for training specialists in the field of digital economy and information technology. This initiative is aimed at improving the quality of education and training personnel capable of working effectively in the modern digital world.

The professional development program plans to train 700 teachers capable of teaching 10,000 students from various fields. This initiative aims to improve the quality of education and expand educational opportunities for students, which will positively impact their professional future.

Despite government efforts, experts continue to doubt that the increase in the number of university graduates with IT degrees will significantly improve the labor market. The quality of IT education remains questionable, which could negatively impact the qualifications of specialists and their readiness for real-world work. Improving educational programs and introducing practical training are important steps to increase the competitiveness of graduates in the IT field.

Valentin Dombrovsky, co-founder of LearnPython, emphasizes that high-quality IT education is characteristic only of a few universities. He also notes that many educational programs are outdated and do not meet current industry requirements. This creates a need to update curricula and implement modern teaching methods to prepare specialists capable of working effectively in the rapidly changing world of information technology.

Petr Karpov, a researcher at the Plekhanov Russian University of Economics, notes that modern technologies continue to develop rapidly, but educational programs at many universities remain outdated. Most educational institutions continue to use traditional teaching methods, ignoring modern approaches to design and development. This mismatch between educational standards and the needs of the modern market creates gaps in the training of specialists. Curriculums must be adapted to modern realities so that students can successfully compete in a rapidly changing world.

There is a significant shortage of practicing teachers, which complicates the quality of student training. Anna Ogluzina, a recruiter at MegaFon, notes: "Education is only a supporting factor, while real-world experience is decisive for employment." This emphasizes the importance of a practical component in educational programs, which can significantly increase the competitiveness of graduates in the labor market.

Graduates who have completed additional courses and possess practical skills are the most preferred candidates for employers. Additional education and practical experience significantly increase the chances of successful employment, as employers value skills that can be immediately applied.

Government Prohibitions and Coercion: What's in Store for the IT Sector?

Starting in early 2022, Russian authorities intend to restrict the use of foreign software in educational institutions and government agencies. The bill, developed by the Ministry of Education and the Ministry of Digital Development, may come into force in the coming months. The ban is expected to include widely used programs such as Windows and Microsoft Office. However, there is currently no information about possible domestic alternatives that could replace these popular solutions. The introduction of such a restriction could significantly impact the work of educational institutions and government agencies, requiring adaptation to new conditions.

According to Mikhail Stetsenko, a lawyer at Legit, ignoring the use of necessary software in educational institutions is a serious mistake. Similar measures will also apply to state-owned companies, where domestic developments will be prioritized during public procurement. This approach not only supports the local IT sector but also ensures more secure and nationally adapted solutions.

According to a study by the Association of Russian Software Products (ARPP), in 2020, 57.8% of Russian developers reported an increase in revenue, while only 22.9% recorded a decrease. The most significant growth was observed in the public sector, where revenue increased by 24.5%. These results highlight positive trends in software development in Russia and indicate growing demand for IT services, particularly in public administration.

Deputy Minister of Digital Development Maxim Parshin announced the involvement of 50 state-owned companies, which account for approximately 17% of Russia's gross domestic product, in the digital transformation program. These companies include major players such as Aeroflot, Russian Railways (RZD), and Rostelecom. However, less than a third of these organizations have approved digitalization plans, highlighting the need for further development of strategies in this area.

An additional 600 companies are planned to be included in the program by 2023. The government has approved directives aimed at supporting government agencies in the development and implementation of digital solutions. This will accelerate the digitalization process and improve the efficiency of government organizations.

As part of the national program "Digital Economy," an experiment has begun to migrate government information systems to cloud platforms. The project involves the Ministry of Digital Development, the Ministry of Labor, and other key agencies. This step is aimed at optimizing the work of government agencies, increasing their efficiency and the accessibility of services for citizens. The use of cloud technologies will improve data processing, ensuring the security and flexibility of systems.

The President ordered the development of the "Gosuslugi. Let's Decide Together" feedback platform, which is scheduled for implementation by the end of 2021. This initiative is aimed at improving citizen interaction with government agencies and enhancing the quality of services provided. The platform will allow users to leave feedback, ask questions, and make suggestions, which, in turn, will facilitate more effective problem-solving.

The State Duma is developing a bill that will require foreign IT companies to open representative offices in Russia. Otherwise, they may be prohibited from advertising in the country. Furthermore, a new tax is proposed for foreign companies that use Russian user data for targeted advertising. This step is aimed at protecting the interests of citizens and increasing control over data, as well as developing the local IT market.

Mikhail Stetsenko noted that these measures are aimed at ensuring national security and creating a level playing field for domestic developers. These initiatives support local technology and innovation, which is an important step towards strengthening the country's economic independence.

Since 2015, Russia has been actively discussing the need to regulate cryptocurrencies. In 2021, the Law "On Digital Financial Assets" was adopted; however, it contains several shortcomings, including uncertainty about the legal status of mining. Regulating cryptocurrencies is an important step in creating a safe and transparent environment for investors and market participants. Without a clear legal framework, it is difficult to protect user rights and prevent fraud risks. Further steps are needed to improve legislation to ensure the sustainable development of the crypto industry in Russia.

Experts believe that the new law creates uncertainty for crypto investors and increases risks for existing crypto exchanges. Establishing a dialogue between businesses and government agencies can be an effective solution to this problem, as has already been demonstrated by the example of the Joys Digital project.

Anton Gulin from AAX emphasizes the importance of explaining the benefits of modern technologies to authorities. This is necessary for creating a more favorable business environment. A compelling presentation of technology's capabilities will help secure government support and create an environment conducive to business and innovation.

Why did the IT sector become part of the Constitution?

In 2020, amendments to the Constitution of the Russian Federation recognized the IT industry as a key area of ​​state policy. This decision emphasizes the importance of information technology for the country's economic development and its future. Recognizing the IT sector as a strategically important area opens up new opportunities for investment, innovation, and the development of high technology in Russia.

Mikhail Stetsenko of the law firm Legit emphasized that the constitutional amendment underscores the importance of strict federal regulation in the field of information security. However, in the absence of developed regulations, this decision remains largely declarative.

Government measures are aimed at supporting and developing the IT sector, which is confirmed by the launch of the national program "Digital Economy". This program includes initiatives that promote innovation and the implementation of modern technologies, which in turn creates favorable conditions for the growth of the country's digital economy.

Goal of the "Digital Economy" program

The main goal of the program is to fully digitalize the country's economy and social spheres by 2024. To achieve these objectives, the government intends to improve legislation, develop the necessary infrastructure and implement modern technologies in key industries. This will increase the efficiency of public services, improve the quality of life of citizens and create conditions for sustainable economic growth. Proper implementation of these initiatives will form the basis for the formation of a digital economy, which in turn will strengthen the country's competitiveness on the international stage.

Mikhail Stetsenko notes that the Russian economy is stagnating, and the time has come to seek new sources of growth. Obviously, these sources are largely related to the development of IT technologies, including software, artificial intelligence, and business process automation. Investments in these areas can become a catalyst for innovative development and increased competitiveness of the Russian economy. The use of modern technologies will not only optimize existing processes but also create new markets and business opportunities.

Long-term goals and current situation

The authorities are striving to increase the share of the IT sector in the country's gross domestic product (GDP) to 2%. Currently, this figure is less than 1%, while in Western Europe it reaches 3%. Increasing the IT sector's share of GDP will contribute to economic growth, the creation of new jobs, and investment in technological innovation. This will also improve the country's competitiveness on the international stage and raise the standard of living of its citizens.

Components of the Digital Economy Program

The Digital Economy Program encompasses six federal projects focused on the development of key areas in information technology. These projects are aimed at modernizing infrastructure, introducing innovative solutions and increasing the level of digital literacy of the population, which contributes to the acceleration of the digitalization of the country's economy.

IT expert Mikhail Stetsenko emphasizes that the program contains clear and reasonable goals, which gives reason to expect significant results in the IT field.