Development Prospects for the IT Industry in the Russian Far East Discussed at the Far East and Arctic Development Corporation

As part of preparations for the Eastern Economic Forum 2021, the Far East and Arctic Development Corporation discussed issues related to the development of the IT industry in the Far Eastern Federal District and the creation of conditions to stimulate exports, including to countries in the Asia-Pacific region.

The discussion brought together representatives of investors, digitalization experts, government authorities and heads of research organizations.

Welcoming participants to the roundtable “Far Eastern IT Hub 2030: Targeting Asia-Pacific Markets,” Roman Chichkanov, Deputy CEO for Investment at the Far East and Arctic Development Corporation, outlined the objectives of the Eastern Economic Forum’s key industry sessions and noted that federal and regional authorities were making significant efforts to develop high-tech industries in the Russian Far East.

The speaker presented preliminary results of joint work by the Russian Ministry for the Development of the Far East and Arctic and the Corporation to introduce digital services across the Far Eastern Federal District.

Under the Lesvostok.rf system, more than 100 million hectares of forest had already been digitized. A service for aquaculture investors had also been launched, allowing users to select marine areas for commercial activities online and acquire them through electronic auctions.
Personal online accounts were created for investors, enabling them to sign agreements remotely and obtain resident status under preferential regimes.

In addition, during the four years of operation of the Far Eastern Hectare digital service, more than 90,000 people received land, of whom 18,000 had already declared activities on their selected plots.
“IT parks and technology parks have been launched in a number of regions, and their residents have entered global markets with their products and services. For example, the Yakutsk Technology Park has around 120 residents and annual revenue exceeding RUB 750 million. International companies such as MyTona and Indriver each employ more than 1,000 people. Exports of IT services from the Russian Far East contribute to the national project aimed at increasing non-resource exports, exceeding RUB 1.5 billion and growing by double-digit percentages annually,” Roman Chichkanov said.

Digital infrastructure was also developing actively across the macroregion. Data centers had been built in the Sakhalin Region and Primorsky Krai.

The data center in the Republic of Sakha (Yakutia), developed in 2013 as part of the region’s digitalization and e-government program, was already operating at 85% capacity.
The new data center serves as a technology platform capable of hosting more than 700 information systems and resources used by regional government authorities.
The Corporation representative added that most new data-center projects were being implemented by Russian and foreign investors with resident status in Advanced Special Economic Zones.

For example, in 2022, a Tier III data center with five security levels was expected to open in the Nadezhdinskaya Advanced Special Economic Zone in Primorsky Krai, with specifications comparable to those of leading Russian data centers operating in Moscow and St. Petersburg.
The key challenges facing the IT industry in the Russian Far East and its potential were addressed by Elena Kharisova, CEO of the Development Fund of the Russky Innovation Science and Technology Center, which was established by a Russian Government resolution in November 2020 at the initiative of Far Eastern Federal University.

She discussed the rapidly developing innovation science and technology center on Russky Island in Primorsky Krai.

According to the speaker, the pilot site with its first residents, which would benefit from special tax, administrative and legal incentives, was expected to begin operations in March 2022.
By 2025, Russky Island was expected to have a dedicated “city” providing a comfortable 24/7 environment for thousands of technology entrepreneurs, scientists and engineers from around the world, with laboratories equipped with modern scientific instruments, pilot production facilities, comfortable housing and social infrastructure.

“Taking advantage of its geographic location, the Russky Innovation Science and Technology Center will become a national hub for promoting technologies, businesses and startups to global markets, while providing access to capital and technologies from Asia-Pacific countries and the rest of the world. This is our mission — to connect Russian technologies with global markets and, through this, ensure our technological presence at the center of global development,” Elena Kharisova said.

The Center’s main areas of activity were expected to include IT technologies, the World Ocean and biotechnology, with environmental technologies, energy, transport and logistics, and natural-resource exploration and extraction identified as additional promising fields.
Among the potential IT technologies to be developed by Center residents, the speaker named neurotechnology, artificial intelligence and 5G/6G networks.

Special infrastructure was planned to support these projects, including a data center and supercomputer.

At the end of her presentation, the Vice Rector for Advanced Projects and New Infrastructure at Far Eastern Federal University and CEO of the Russky Innovation Science and Technology Center Development Fund invited roundtable participants to consider becoming residents of the pilot site in 2022.

The discussion of the IT industry in Russia’s Far Eastern regions continued with a focus on the need to create centers of attraction and opportunities to export the services of IT specialists.
Andrey Prokhorovich, CEO of Eurasia Development Limited and Advisor to the Chairman of the China-Russia Innovation Technology Park in China, drew on the experience of the Chinese technology park and emphasized the need to develop talent for high-tech industries proactively and ahead of demand.

Another potential stimulus for development, he noted, could be the attraction of “smart investment.”

These points were also supported in the presentation by Sergey Lebedev, Vice President for Government Relations at AliExpress Russia.

Anatoly Semyonov, Minister of Innovation, Digital Development and Infocommunication Technologies of the Republic of Sakha (Yakutia), shared experience from the implementation of a digital project using the Yakutsk IT Park as an example.

A resident of the Nadezhdinskaya Advanced Special Economic Zone also addressed whether the construction of data centers could become a driver for the IT industry and what infrastructure would be required.

Evgeny Virtser, CEO of Key Point LLC, argued that given the current shortage of high-quality data-center services in the Russian Far East, the main priority should be a large-scale transition of services into digital form, taking into account strong demand from Russian and foreign companies, particularly Asian companies from China, South Korea and Japan.

Construction of the first commercial Tier III data-center park in Eastern Siberia and the Russian Far East, classified according to the international Uptime Institute standard, was already underway.

Construction of the first phase in the Nadezhdinskaya Advanced Special Economic Zone began in May 2021, with completion scheduled for July 2022.

Construction of the second phase was then scheduled to begin in September, with commissioning planned for July 2023, while the third phase was expected to be completed in the summer of 2024.

The project envisaged the creation of common infrastructure and networks on a 2-hectare site, with data-center modules to be constructed gradually as demand for services increased.
The three phases of server rooms, providing a total of 440 racks, were designed as complete, fully functional data-center modules.

This approach was intended to allow clients to be connected gradually, support further development of services within the allocated site and preserve the facility’s relevance and capacity to accommodate new clients over the long term.

“We held negotiations with Korea Telecom and discussed a project to build a data center on a site adjacent to the Key Point data center in the Nadezhdinskaya Advanced Special Economic Zone. The facility would serve customers from the Korean market for the export of cloud services, as well as Korean and Russian companies operating in the Russian Far East,” Virtser explained. “The Nadezhdinskaya zone has considerable potential for developing the data-center business.

We plan to build one of the largest data-center clusters in Russia — a complex with a total capacity of around 2,000 racks and aggregate power consumption of approximately 15 MW.”
At the conclusion of the roundtable, Semyon Zagainov, CEO of ExpoPromoter, discussed prospects for exporting IT services to Asia-Pacific countries, while Dmitry Borovikov, Director of the Russky Technology Park, spoke about the development of the high-tech sector in the Russian Far East.

“There are objective barriers to the accelerated development of the IT industry in the Russian Far East. First and foremost, these include a shortage of personnel, a lack of highly qualified specialists in the sector and strong competition from Asia-Pacific countries,” summarized roundtable moderator Tagir Aushev, Corresponding Member of the Russian Academy of Sciences. “The high-tech industry of the Russian Far East has considerable growth potential, but realizing this potential requires the creation of specific conditions. Developing these conditions is the main objective of today’s roundtable.”