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. Last Updated: 07/27/2016

U.S. Firm Importing High-Tech Programs

BOSTON — The Russian economy now dances to the tune of surging oil prices, but Boston technology executive Scott Killoh says programmers banging out software code could be the drum beat of the country’s future economic expansion.

In downtown Moscow on Tverskaya Ulitsa, Killoh’s company, Openpages Inc., employs 140 Russian programmers and engineers turning out software code at "light speeds." Their blocks of code are shipped via the Internet to a computer server in the United States. Openpages engineers in suburban Boston then download the data for building and revising the company’s latest software content management product.

"We don’t have any problems with customs," Killoh joked on Saturday at the U.S.-Russian Investment Symposium in Boston.

Indeed, the company’s Boston-Moscow connection already has gained the approval of blue chip investors such as Goldman, Sachs & Co. and Matrix Partners, who have invested more than $50 million in Openpages. Russian expertise at producing software code for the Internet economy, however, has largely been overlooked by American firms, said Killoh, chairman and founder of Massachusetts-based Openpages.

While countries such as Ireland and India have become magnets for U.S. technology companies strapped for high-tech workers, Russia’s reputation for corruption, its crumbling infrastructure and complicated tax code has overshadowed Russia’s intellectual capital, Killoh said.

Economic Development and Trade Minister German Gref agreed his country should study the success stories of India and Ireland.

Openpages is growing at an annual rate of 400 percent selling software to leading U.S. media companies such as Knight Ridder Inc., Gannett Co. Inc. and Tribune Co. that allows them to build web pages automatically, Killoh said. He expects Openpages to generate about $15 million in revenue in 2000 and go public by midyear 2001.

Openpages’ Russian employees come at one-fifth the cost of their peers in Boston, a hot bed of high-tech firms.

"If you’re in Boston, there’s a negative unemployment rate for technology talent," Killoh said. "We would not have had success without our Russian talent."

Killoh, 35, relies on Yury Kirkel, 28, to find programmers and software engineers for the Moscow operation. The two met in Boston not long after Kirkel ended a two-week stint delivering pizzas.

Kirkel honed his programming skills at a biochemistry institute in Russia, where he earned about $15 a month. Now, he recruits scientists from the prestigious Moscow State University. These workers can earn as much as $30,000 a year, not including stock options.

"Some are pure scientists who discuss quantum physics in the lunchroom for fun," Killoh said.

In contrast, 20 percent of Russia’s population lives on less than $2 a day, said Johannes Linn, vice president of the World Bank for Europe and Central Asia.