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. Last Updated: 07/27/2016

Reiman Makes Case for Teamwork in IT

Russia and the United States have similar interests in the information technology industry and should work together to overcome obstacles to further development, Communications Minister Leonid Reiman said Friday.

"There are currently a number of reasons that prevent or slow down development of international cooperation in the IT field, but they can be eliminated because the two countries' interests in this sphere complement each other," Reiman told the first Russian-American Roundtable on Information Technology Cooperation in Moscow, which was attended by U.S. Commerce Secretary Donald Evans.

The conference was organized by Russian IT companies, the American Chamber of Commerce, the Communications Ministry and the U.S. Commerce Department. President Vladimir Putin had suggested the event during talks with U.S. President George W. Bush on a visit to the United States in November.

Participants, including representatives of U.S. and Russian IT majors such as Microsoft and Information Business Systems, elected a bilateral working group that will focus on cooperation in the sector. Participants also signed an address to Putin and Bush with recommendations on how to solve the problems faced by the industry.

While Russia's low costs and large number of skilled researchers have made the country attractive, poor legislation -- particularly a lack of intellectual property protection -- acts as a major barrier to investment, the organizers of the conference said in the address.

Another barrier is "U.S. companies' lack of information on positive changes in the Russian IT industry," the address said.

Russian companies themselves, however, are also to blame for the lack of investment, said Alistair Stobie of Mint Capital, an investment fund.

"Most Russian IT companies are woefully unprepared for venture capital investment," said Stobie, adding that companies often are unable to sell themselves to venture capital funds.

Russian IT revenues totaled $3.2 billion in 2001, according to IBS figures. A report presented at the conference by Morgan Stanley said the IT sector here represents just 1.2 percent of gross domestic product, compared to 4.6 percent of GDP in the United States.

Russian businesses on average spent 2 percent to 3 percent of their revenues on IT in 2001, compared with 10 percent to 15 percent on average in developed countries, the report said.

The discussions were a step in the right direction toward ending the industry's problems, participants said.

"We do have problems. For commercial organizations and governmental officials being able to meet together is the best way," said Robert Agee, Cisco Systems' general manager for Eastern Europe and Central Asia.

"As the Russians say, water hones the stone. So a little step at a time, we'll be able to crack down on these problems and issues for the mutual success of American and Russian IT companies."

Also at the conference, Moscow State University and California-based company Exigen announced that they would jointly build a multimillion-dollar IT center at the university, which should be completed by 2007.