Weekend Economists Salute Ruin July 3-5, 2015

[MattSh]

32. Anti-Americanism provides big boost to Russia's small IT businesses - CSMonitor.com

MOSCOW — At a glance, starting a company amid Russia's perfect economic storm of Western sanctions, bottoming oil prices, and a devalued ruble seems like a bad idea.

But that's what Sergei Sherstobitov did, launching Angara, a small Internet security company, in February. And he thinks the prospects for Russian IT firms such as his are quite good.

His optimism is not due to much-hyped but largely mythical government assistance to small business. Rather, he insists, things are looking up mainly because of a bad news cocktail that includes Western sanctions, a 30 percent devaluation of the ruble, the growth of anti-American sentiment, and burgeoning suspicion toward all foreign digital goods and services in the wake of the Edward Snowden revelations. That has made Russia's IT sector surprisingly fertile ground.

"Every coin has two sides, and it's true that this crisis has tightened the market, there's less money in people's pockets, and the competition has become really fierce," says Mr. Sherstobitov, sitting in his central Moscow office. About a dozen young employees are spread around the casual workplace, hunched over computers or seemingly staring out the windows.

"On the other hand, the market for IT services is really opening up, and people only want Russian goods and expertise – even if the quality isn't quite as good as the Western ones everybody had gotten used to. There are a lot of new niches appearing, and I aim to move in to some of them."

It's not an unusual story. The share of small business and self-employment in the Russian economy is astoundingly low – about 20 percent, compared to up to 70 percent in developed Western economies – but experts say there is a new wave of 30-something entrepreneurs coming up.

Complete story at - http://www.csmonitor.com/World/Europe/2015/0630/Anti-Americanism-provides-big-boost-to-Russia-s-small-IT-businesses