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. Last Updated: 07/27/2016

IT Boom Reverses Brain Drain

Victor Mikhaylov had high hopes when he left his native Chelyabinsk to work as a programmer at a promising Internet-based company on the U.S. West Coast in 2000, at the height of the technology boom.

Three years later, the U.S. high-tech sector is in shambles and Mikhaylov, like many other Russian scientists, engineers and programmers who left for jobs abroad, is back working in Russia.

The high-tech crisis in the West coupled with the growth of technology-driven Russian companies is sending skilled Russian techies scrambling for jobs back home. Industry experts say 10 percent of those looking for work in the Russian IT sector are recent returnees or would-be repatriates.

And this trend is likely to continue for at least two more years and will put a small dent in the technological brain drain that has plagued Russia for more than a decade, analysts said.

Mikhaylov's case is a textbook example. In June 2000 he was hired by a company in Seattle, Washington, that sells digital music on the Internet. He survived layoffs that cut the number of company employees from about 90 to six. But when business got so bleak that the CEO moved the company into the basement of his home, Mikhaylov quit.

He interviewed at Microsoft, and a telecom firm in Miami, Florida, but he couldn't land a job. With his wife already back in Moscow and his H1B visa running out, Mikhaylov reluctantly returned to Russia last October.

Within a couple of months here, he had multiple offers -- including his current job at Luxoft developing software for Dell.

"When American or European companies need to downsize, foreign employees are often the first to go," said Larisa Lukashyova, human resources manager at Spirit Corp., a Moscow software development firm with 100 employees. She says in the last couple of years she has hired five programmers who had been working abroad.

"People are coming to us not only because of the crisis in America, but because there has been stable growth in the Russian IT sector," she said.

In recent years, the domestic IT sector has expanded some 20 percent annually, causing salaries to rise steadily. Nonetheless, Lukashyova said, they continue to lag well behind those in the West.

Oleg Tsetovich, an IT personnel consultant at Avenir & Partners, a Moscow recruitment agency, said Russians returning from abroad have skills and knowledge that are in demand. Often, they command higher salaries than their counterparts who have stayed at home.

"They speak English. They have great business connections. Plus they bring Western corporate culture back with them," he said. Like Lukashyova, he estimated that about 10 percent of the people seeking employment in the domestic IT sector are recent returnees or would-be repatriates.

A4Vision, one of the country's hottest high-tech companies, was started by a pair of Russian scientists who moved back to Russia after working in Europe. The company, a developer of cutting-edge 3-D face recognition technology for security systems, maintains offices in Geneva and Silicon Valley -- but all the researchers are in Moscow.

Alexei Gostomelsky, the head of the firm's Moscow office, said the IT market trends coincided in a beneficial way for Russia. "At the same time the IT market was falling in the States, Russia started to grow and more opportunities became available for high-tech people here," he said. "It's difficult for pure researchers to come back to Russia. But for applied scientists, now is a very good time."

"They bring back unique skills like ... how to work in a team, project management skills and knowledge of how to work with Western people." he added. "That's important."

Understanding how to work with Westerners is especially crucial in a field as globally interconnected as the technology industry. Despite the ongoing high-tech crisis in the West, successful Russian technology companies depend primarily on sales to North American and European companies.

Luxoft, a division of IBS, develops software for Dell, Boeing, IBM and other firms. Spirit's biggest buyer is Texas Instruments. A4Vision's customers include Logitech, Siemens and Bell Group.

Software development centers established directly by large Western companies in Russia also employ many programmers. Sun Microsystems has about 500 programmers on staff in Novosibirsk, St. Petersburg and Moscow. Intel has 300 engineers at work at its research and development site in Nizhny Novgorod, while Motorola has 250 researchers based outside St. Petersburg.

The IT division of Kelly Services, an employment agency, says that the trend of Russians coming home to work is likely to continue for at least two to three years.

A sharp slowdown in high-tech emigration because of tighter visa regimes and a lack of jobs abroad has helped stem the brain drain that has afflicted Russia since the early 1990s.

Mikhaylov, the programmer from Chelyabinsk, says he likes his job at Luxoft and he admits that the repatriation trend is ultimately good for Russia. But, he said, "If I could have found another job in the States, I never would have come back."