Does Georgia have a future in the IT industry? The StrategEast State and IT Eurasian Forum held in Tbilisi answered these questions. The forum was one of the largest international events held during the pandemic. We spoke to its organizer, StrategEast President Anatoly Motkin.
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The IT industry does not occupy an important place in the Georgian economy today. Do you think this field has a future in Georgia?
Absolutely. First, you know perfectly well how creative and intelligent the people who live in Georgia are. Today, computer science graduates from local universities such as BTU, Caucasus University, and the Free University find employment quite easily.
Also, at StrategEast we make a great effort to attract major international companies to Georgia so that young people can gain experience from world-class specialists. Some of these companies have already opened offices in Tbilisi and brought across several staff from other countries – in order to work and to train the local talent.
At the StrategEast forum, several statements were made by Georgian government officials and industry leaders about tax cuts for IT companies as well as the opening of offices of American companies in Georgia. What were the results of the forum for Georgia?
Based on the dialogue between the participants and the results of the plenary discussions – in addition to forming so-called policy papers, which we share with key stakeholders in the Eurasian region – three important statements were made at the forum. First, the government of Georgia has named the IT industry among the three priority sectors for the country’s economy. Second, for the first time at our forum, the Chairman of the Georgian Innovation and Technology Agency (GITA), Avtandil Kasradze, and the Deputy Minister of Economy, Irakli Nadareishvili, announced a reduced 5% tax for IT companies in Georgia. This law has already been approved. Third, Arkady Dobkin, President of EPAM Systems, a leading U.S. engineering company and a member of StrategEast’s advisory board, announced the opening of an office in Georgia. It should be emphasized that the results of all these actions can already be seen, and I assure you that in less than a year, Georgia will occupy an important place on the IT world map.
The StrategEast Center recently published a report on the development of the IT industry – “Changing Economy Changing Society”. As its name suggests, you consider the IT industry to be not only an economic but also a social factor. What changes does IT development bring to society?
We have long noticed how IT changes the pattern of social behavior in the countries of the region – mainly thanks to the fact that IT specialists work for western customers and collaborate with colleagues from large western corporations. Along with the acquisition of professional skills, these professionals will perceive a new, non-Soviet cultural code.
Suffice to say that in Minsk – where in the past ten years, right under our eyes, thanks to young IT professionals – public catering facilities with kolkhoz service have been replaced by numerous hipster cafes, public workspaces and other public establishments, which can easily be imagined in California, Berlin or Warsaw. But this is not the main thing; the major transformation that is taking place because of IT development is the formation of a new class of highly responsible professionals. For many years, the only generator of quality staff in Georgia was the banking industry and, partially, the law sector. Here, a major part of the population, as in most post-Soviet countries, has not acquired the two main characteristics that distinguish “Homo Sovieticus” from a market-conscious person: who is ready to take responsibility and respects private property.
In the Soviet Union and the United States, an employee might steal a hammer from work. In America, the man would say, “I stole this at work”, whereas the Soviet man would say, “I took it from work and brought it home.” The latter indicates a lack of taking responsibility and absolute disrespect for someone else’s property.
StrategEast’s mission is to help the countries that escaped Soviet occupation, to clear a vicious Soviet legacy, and to create a transparent economic model, based on knowledge and responsible, effective institutions.
You talked a lot about IT education in the forum and the need for investment in it. You mentioned the educational center IT HUB, which you opened in Tbilisi. Could you tell us more about that?
Although StrategEast is fully engaged in the economic transformation of the region, I have long had a special attitude towards Georgia and have been thinking about how to create a successful and dynamically developing IT sector here.
The state itself has carried out colossal work in this direction. Georgia’s Innovation and Technology Agency (GITA) has, in a short time, become a real driver of innovative transformations in the country, and I am glad that StrategEast has such a qualified partner in Georgia. As I mentioned earlier, the role of the universities and the Ministry of Education itself, which also provides tremendous support, is important. As our own experience in Georgia has shown – without close cooperation with universities and the Ministry of Education, it is much more difficult to implement a vocational education program.
Our StrategEast IT HUB in Tbilisi is fundamentally different from similar initiatives in that we first create new high-paying jobs and our graduates, immediately upon completion of their studies, start working in major international technology companies without leaving Georgia. The StrategEast IT HUB in Tbilisi was forethought as a physical space where world-class IT specialists teach our students and conduct practical seminars. But by early March, the Coronavirus pandemic impacted these plans and made group training impossible. As a result, we have only benefited from a remote model, where each teacher works with one student. This allows us to teach not only talented young people from Tbilisi and the surrounding territory but also those who live far from the capital. We are currently teaching up to forty students and hope to increase the number of students tenfold with the involvement of donors. These hundreds of graduates will become the basis of the Georgian IT industry and will bring tens of millions of dollars into the Georgian economy.
As the experience of Ukraine and Belarus shows, thanks to each IT specialist, five more jobs are created; often these are as waiters, shop assistants, builders, and laborers. The main thing is that through their example, IT specialists motivate their peers to strive for better.
What is the financial model of this center? Who pays the tuition fee?
The tuition fee for the first group of students was paid by the StrategEast Center because it was important to us not to lose any time and to start implementation as soon as possible. In the second stage, we expect support from international donor organizations. However, our program is designed so that in two years it will become financially sustainable and tuition costs will either be covered by the students or by the companies that hire students themselves. At the same time, we will maintain a system of scholarships to help talented young people from the regions and families with a low socioeconomic status. In addition, our program aims to address important issues such as gender equality and the inclusion of ethnic minorities.
In the near future, StrategEast together with a major international partner also plans to launch a startup development program in Georgia, and, thanks to this program, we will be able to significantly increase the volume of foreign investment in Georgia.
How would you summarize why the digital economy is a priority for Georgia?
The IT industry is not just a budget increase mechanism for Georgia. Today, any country that is unable to integrate into the global digital economy will lag behind. Of course, both agriculture and tourism are and should be a priority for the Georgian economy; but the future of Georgia, as a country of wise and ambitious people, is still in the knowledge economy.
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