As Eastern European technology hot spots ride today's wave of international outsourcing, they are increasingly being considered as potential centers for more than just noncritical implementation work.
As Eastern European technology hot spots ride today's wave of international outsourcing, they are increasingly being considered as potential centers for more than just noncritical implementation work. EE Times' recent Going Global report ranked some countries that are ready to become outsource destinations (see Oct. 31, 2005, page 1). Among them, the Czech Republic, Poland and Estonia were listed as "Good bets," while China and India were considered "Sure things," as were Ireland, Malaysia and the Philippines. Israel, Sweden and Brazil were listed as "Sleepers."
I propose that another nation be added to the list of countries worth investing in: Russia. Several companies, like design and services company 74ze, have already shown that it's possible to find excellent talent in Russia for a fraction of what it would cost in the United States.
Sure, cracking the Russian matryoshka, or nesting dolls, will be a chore. As Winston Churchill so aptly put it back in 1939, commenting on Russia's unpredictable temper: "I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest." Indeed, Russian citizen-engineers are yearning to become "world citizens" who will be accorded all the honor and respect that term denotes.
In that same Going Global report, longtime Russia technologies watcher Malcolm Penn, chief executive officer of market research firm Future Horizons, said that when a company is deciding where to sink its foreign investment, "the only factor to consider is the access to engineers." If the cost of hiring and keeping an engineer locally happens to be cheaper, "it's a double bonus," Penn said. And engineering talent abounds in Russia. The question for Western companies is, how does one tap it?
Recently in Silicon Valley, a group of Russian immigrants held the first Silicon Valley Open Doors conference. The goal was to help technology companies from former Soviet countries gain exposure, and to network with venture capitalists and potential technology partners.
Pitch Johnson, a founding partner of Asset Management, reflected on the considerable amount of time he has devoted to investing in and developing the venture capital market in Eastern Europe. He stressed that venture capital is a "local business," but noted that "almost no business plan in Russia ever has a marketing plan but [they do have] great technology."
About 40 Eastern European enterprises presented their business plans and technologies at the conference, including Wostec, which is developing a novel lithography solution; Sborka (APMatrix), targeting the giant, flat, high-resolution color display market using a synthesis of light-modulating substrates; and Ferrobit, which is working with Tokyo University to develop silicon-substrate-based, nonvolatile magnetic memory.
The upcoming U.S.-Russia Technology Symposium has established itself as the primary investor conference for Russia. Conceived in part to fulfill Russia's desire to diversify its economy beyond oil and gas, the symposium is in its third year. The Feb. 9-10 event in Stanford, Calif., will directly address issues related to the changing role of global competition (www.usrts.org/stanford/live/home.asp). Its underlying theme is "Russia in the global marketplace."
-Nicolas Mokhoff (email@example.com), EE Times research editor