Gulf states and 'The Stans' could become new tech hotspot – analyst

One has the talent, one has the money – both want more tech

The gulf states and former Soviet nations of central Asia are set to become a new hub of tech activity, according to Anatoly Motkin, president of Strategeast – a non-profit that operates in Ukraine, Georgia, Kyrgyzstan, and Kazakhstan, and works to develop their digital economies.

In Motkin's telling, European and Central Asian nations like Georgia, Uzbekistan, Armenia, Azerbaijan, Moldova, Turkmenistan, Tajikistan, and Kyrgyzstan are ripe to develop offshore tech services and business process outsourcing businesses. School systems across the region emphasize math, physics, and chemistry, Motkin said, meaning graduates have the foundations needed to learn IT skills.

The nations of the region are also keen to develop new industries and realize that IT businesses are an obvious candidate. Motkin said that established industries, such as mining, feature ticket-clippers who must be accommodated. The IT services industry lacks those complications – at least for now. Regional governments appreciate that tech is a less complex industry, in several dimensions, so are offering tax concessions.

Global demand for tech talent, meanwhile, means buyers are looking for new sources of skill.

While the region is not well known to those buyers, the success of companies from eastern Europe like EPAM – created in Belarus but based in New Jersey, listed on the New York Stock Exchange, and a member of the S&P 500 – means buyers have some reference and proof points for considering this part of the world as a source of talent. Motkin also points to the strength of Ukraine's tech sector, demonstrated before and during Russia's illegal invasion, as evidence the region can produce strong talent.

Tech outfits across the region understand that many perceive security as an issue and therefore work assiduously to ensure their own affairs are in order. Motkin said he's seen an offshore center working for a US aerospace concern in the region, with appropriate physical security in place.

Talent for hire is not enough – Motkin reckons local businesses have also paid attention to growing the team leaders and managers needed to operate in the services business.

One barrier to export – English proficiency – has largely been overcome. "All internal communication in regional companies is now in English," he reported. Another issue – the quality of delivery skills – is improving as existing firms share their expertise and new players gain experience.

The region's tech talent has attracted plenty of attention in the Gulf States, he said, as they are hungry to develop digital economies and share cultural affinities with Central Asian nations.

"We have a huge hunger for knowledge and to become leaders in Saudi Arabia and Qatar," Motkin continued, adding the he's also seeing plenty of startups develop in Central Asia, and venture capitalists in the Gulf region willing to fund them.

Gulf startups, meanwhile, often lack local developers and see the Caucasus and Central Asia as a good source of talent.

"It's the same time zone, but ten times cheaper," Motkin argued.

"Working together, the Gulf and the Caucasus could become a huge hub of digital skills," he opined.

Buyers beyond the region also stand to benefit, he said, in more ways that just finding well-priced talent, because he believes that the rule of law – and spread of civil society – follows the tech industry. ®

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