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The IT Industry in Belarus: 2017 and Beyond THIS REPORT CONTAINS INFORMATION AS of 30 APRIL 2017 the IT INDUSTRY in BELARUS:  01 2017 and Beyond

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The IT Industry in Belarus: 2017 and Beyond THIS REPORT CONTAINS INFORMATION AS OF 30 APRIL 2017 THE IT INDUSTRY IN BELARUS: 01 2017 and Beyond CONTENTS Foreword 02 Labor market 40 Partnerships with Summary 42 technological companies 89 Executive summary 04 Demographics and regional Certification 90 Brief information about distribution 42 Personnel 90 the Republic of Belarus 08 Age structure 44 English language skills 93 General information 10 Supply and demand on Business environment 93 Visa-free travel 10 the IT labor market 44 Raising finance 96 Population 10 Employee turnover 47 Sources 96 Transport and communications 10 Distribution by age and length of service 48 Development centers opened Doing Business 11 by international companies Salaries in the IT industry 50 Economy 11 in the Republic of Belarus 97 Total labor costs 55 Foreign investments 13 Labor resources by gender Recent landmark Foreign trade 13 in the IT industry 55 transactions and events 100 The IT industry’s role in Belarus 14 Proficiency in foreign languages 57 Sources 15 Belarus in international Sources 57 IT rankings 106 Information about the Global Outsourcing 100 106 Infra structure 58 IT industry 16 Software 500 107 Summary 60 Summary 18 Everest Group MAP Matrix™ Office premises and other Employment in the ICT sector 19 for IT applications 108 utility expenses 61 Key ICT performance indicators 20 Sources 108 The ICT Development Index 61 Business of Hi-Tech Park residents 22 Internet access 62 Recent mentions of the Role of the Hi-Tech Park Mobile-cellular communications 63 Belarusian technology sector Administration 24 in the international media Commercial data centers 63 110 Foreign investments 24 Sources 64 Financial Times 110 Sources 25 Reuters 110 Doing Business 65 Education 26 The Wall Street Journal 110 Summary 66 Summary 28 Emerging Europe 110 State support and regulation Higher education system 29 of the IT industry 66 Methodology 111 STEM education 31 Overview of the legal and EY in the CIS 113 Leading institutions of higher regulatory environment 68 education 33 Investments in the Republic of Belarus 70 Key contacts in EY’s Affordability of education 35 Judicial system 72 Belarus office 114 Planning the number of students 35 Protection of intellectual property 73 Graduate placements 35 Cooperation between educational IT сompanies 76 institutions and technology Overview 78 companies 36 Business lines, types of service 79 IT company training centers 37 2020 HTP growth prospects 80 Achievements of Belarusian Customers 82 students in international competitions and olympiads 37 Sales geography 84 School education 39 Branches and representative offices 86 Sources 39 Map of sectoral industry competencies 86 Drivers of competitive performance 88 Development priorities 89 THE IT INDUSTRY IN BELARUS: 02 2017 and Beyond FOREWORD Foreword 03 Pavel Laschenko, FCCA Country Managing Partner for Belarus The digital transformation of all We have tried to bring together all the aspects of business is on manage- essential statistical and analytical ment’s agenda in companies every- information on the country and its where in the world. Today, three key business environment, and on the IT factors driving a company’s success industry and IT companies in Belarus, and future prospects are the ability to as well as to forecast key industry create and manage digital technology, figures for the future. access to technology talent, and the speed and cost of transformation. In In preparing this report, we analyzed the world of technology, where available statistics, conducted a large borders between countries tend to number of interviews with industry fade, it is essential to identify promis- experts, and surveyed numerous IT ing locations, find reliable partners, companies. and make well-considered invest- We trust that you will find the informa- ments. tion in this report useful. The IT industry in Belarus has grown If you have any questions or would like and developed substantially in the last to explore the Belarusian IT industry in decade. We are convinced that the greater depth, EY experts will be industry has great promise, and we happy to provide support and assis- are seeing ever increasing interest in tance. Belarusian IT companies from other countries and our clients. We are pleased to present The IT industry in Belarus: 2017 and Beyond, a report prepared by EY experts to give you an idea of the country’s IT industry and its potential. Enjoy the journey! THE IT INDUSTRY IN BELARUS: Executive summary 04 2017 and Beyond EXECUTIVE SUMMARY The Republic of Belarus is a country in tries. Over 90% of the market for communication), information security, Eastern Europe with a population of Belarusian IT companies is external establishment of data-processing around 9.5 million. The capital, Minsk, and involves exports, but the state centers, etc. As a result of the IT with a population of some 2 million, is retains a strong influence over the industry’s development, the range of the 11th largest city in Europe and industry in the form of local laws activities needs to be broadened to Belarus’s economic and educational regulating the business environment. meet the needs of companies develop- center, as well as its main technologi- ing their own products, whose form of cal cluster. In the IT products and services monetization may differ from that segment, these measures include the permitted at the present time (adver- The IT industry plays a key role in the Hi-Tech Park (HTP), a special regime tising revenues, for example). On the economy of Belarus. During the last for IT companies that was introduced whole, industry experts and compa- 10 years Belarus’s IT industry has in 2006 and applies throughout the nies have a high opinion of the Hi-Tech distinguished itself from other sectors country. Resident companies enjoy Park’s business climate — from the of the economy by steadily growing important government support: they point of view of taxes as well as other revenues, exports, workforce, and are exempted from most taxes, areas of cooperation with the state. other indicators. including value-added tax and income tax. Further, employees of the resident Hi-Tech Park residents may be The information and communication companies enjoy a 30% reduction in categorized as follows: technology (ICT) sector currently has personal income tax compared with a workforce of over 85,000, including other sectors of the economy. Due to • Companies specializing in IT some 34,000 in the IT products and the HTP, Belarus managed to build a services services segment. Another 30,000 IT mature export-oriented software • Companies specializing in develop- specialists are employed in sectors of development industry and became a ing and supporting their own the economy other than ICT according significant player on the IT services products (including startups) to our estimates. There are currently market in Europe in just 10 years. • Captive centers or R&D centers of no official statistics on the overall According to Gartner, Belarus is foreign technology companies number of ICT specialists in Belarus, among the nine most attractive but we conservatively estimate the locations for Outsourcing, Shared At the first stage of its development number at over 115,000. Service & Captives in the Europe, the Hi-Tech Park was established as a Middle East and Africa region. Today, Foreign demand for the products and regime for outsourced software Belarus Hi-Tech Park is a major IT services of companies in Belarus’s IT development and IT services based on cluster with over 30,000 software industry has seen strong growth in the offshore model. This line of engineers employed there. recent years. Exports of IT products business still prevails among residents. Five out of ten of the world’s largest and services increased by a factor of Under national law, Hi-Tech Park corporations, according to Forbes more than 30 in the period from 2005 residents can provide services rankings, are customers of the Hi-Tech through 2016, with the share of IT involving information-system analysis Park, and its residents supply software exports in the country’s total exports and software design and development products and IT services to 67 of goods and services rising from (IT consulting, audit, maintenance of countries globally. Six of the Park’s 0.16% to 3.25%. The IT industry has national information networks, residents have been selected as emerged as the second-largest database development, and implemen- 2017’s best outsourcing service contributor to the positive balance of tation and support of corporate providers — listed in the 2017 Global service exports (after the traditionally information systems). Since 2015, Outsourcing 100 — by the Internation- dominant transportation services). Hi-Tech Park residents have also been al Association of Outsourcing Profes- A positive external trade balance is involved in new R&D activities (micro-, sionals (IAOP). important for Belarus’s economy, and opto- and nanoelectronics, mechatron- a range of measures are being taken ics, telecommunications, radar to encourage export-oriented indus- ranging, radio navigation and wireless Facts about IT 05 in Belarus BELARUS 9.5 80+ 37th 48.3% million population countries’ citizens place out of 190 for share of services in 2017 allowed visa-free Belarus in the World in GDP, 2016 entry Bank Doing Business 2017 ICT SECTOR 85,000 5.1% 2.2% USD 1.4 b employed in ICT sector, share of ICT sector share of ICT sector foreign investment 2016 in GDP,
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    84 823 65 Special thanks to the Independent Institute of Socio-Economic and Political Studies for assistance in getting access to archival data. The author also expresses sincere thanks to the International Consortium "EuroBelarus" and the Belarusian Association of Journalists for information support in preparing this book. Photos by ByMedia.Net and from family albums. Aliaksandr Tamkovich Contemporary History in Faces / Aliaksandr Tamkovich. — 2014. — ... pages. The book contains political essays about people who are well known in Belarus and abroad and who had the most direct relevance to the contemporary history of Belarus over the last 15 to 20 years. The author not only recalls some biographical data but also analyses the role of each of them in the development of Belarus. And there is another very important point. The articles collected in this book were written at different times, so today some changes can be introduced to dates, facts and opinions but the author did not do this INTENTIONALLY. People are not less interested in what we thought yesterday than in what we think today. Information and Op-Ed Publication 84 823 © Aliaksandr Tamkovich, 2014 AUTHOR’S PROLOGUE Probably, it is already known to many of those who talked to the author "on tape" but I will reiterate this idea. I have two encyclopedias on my bookshelves. One was published before 1995 when many people were not in the position yet to take their place in the contemporary history of Belarus. The other one was made recently. The fi rst book was very modest and the second book was printed on classy coated paper and richly decorated with photos.