The social economic development of the software development and IT-services sector, along with its accomplishments in Belarus, have been characterized by a steady growth over the past ten years. The export growth rates of software and IT services on average are from 35 to 40% per year. This percentage reaches far above the global average of 4% to 6%.

Being a significant player in the international IT market, Belarus stands among the top 20 countries in terms of custom-made software development. In many regards, growth in this area has been the direct result of the government’s support and the creation of the High-Tech Park (HTP) in 2005.

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Valery Tsepkalo, photo park.by

An Overview of the HTP

The HTP was created for the development and implementation of information and communications technologies, software for the republic’s industrial organizations as well as the exportation of these technologies and software offerings beyond the borders of the Republic (according to the Decree of the President of the Republic of Belarus of September 22, 2005 №12 “On the High Technologies Park”).

The park is located in the north-eastern part of the capital of Belarus, Minsk, and covers a total area of 50 hectares. The territory is home to the offices of HTP residents and the buildings of the Belarusian Academy of Sciences Institutes. However, unlike most European and Asian parks, the HTP of Belarus is also a virtual park.

This means that the legal system of the HTP is valid throughout the territory of the Republic of Belarus («the principle of extraterritoriality»). A Belarusian IT-company can register as a resident and benefit from all the advantages of the HTP, regardless of where its office is located. Thus, the educational, research and development, professional and infrastructural potential of the whole country is fully optimized.

The organizational and management structure of the HTP is represented by the Supervisory Board and the HTP administration. It is the function of the Supervisory Board to coordinate the efforts of the HTP, control its activities and makes decisions on the residents’ registration. Direct management of the park is carried out by the Administration of the HTP, a nonprofit institution that is subordinate to the President of the Republic of Belarus and accountable to the Council of Ministers of the Republic of Belarus.

The Belarusian High-Tech Park is the largest IT-cluster in Central and Eastern Europe. The uniqueness of the HTP lies in the fact that it successfully combines high-quality technical education, the high professionalism of IT-specialists and the government support of the IT-sector.

According to expert estimates, the IT sector is the most promising industry in the Republic of Belarus.

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The HTP is empowered to grant tax benefits on a regular basis. Park residents are exempt from paying income tax, value added tax (with some exceptions), land tax, and tax on real estate that is located within the boundaries of the park. Residents are also exempt from paying import customs duties and VAT if they import technological equipment, accessories or components for use in HTP investment projects.

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It’s not just the tax incentives that make the HTP attractive. It also offers access to highly qualified Belarusian specialists who are involved in IT-projects of varying complexity, starting with system analysis, consulting, hardware selection and ending with the design and development of complex systems.

The quality of Belarusian education in the sphere of the IT is well known throughout the world. There are 55 universities in Belarus that annually produce around 16,000 young ICT professionals.

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During his visit to the HTP, Cliff Reeves, General Manager of Microsoft New Business-Models Development said: “Belarus has a reputation of a country with a high scientific potential. This reputation is not gained overnight. It takes 50-60 years to establish a strong education system with highly qualified faculty.”

History of success

The contribution the HTP makes to the economy of the Republic of Belarus increases on an annual basis. When justifying the creation of the park in 2005, a «super optimistic forecast» was developed that claimed it would spawn revenues in advance of 300 to 350 million dollars from the IT-sphere by 2016. Valery Tsepkalo, Director of the HTP, later disclosed that, by 2014, the park had achieved a total revenue twice that estimation: 680 million dollars.

Work on the HTP started in 2006, and its first residents started to emerge in the same year. By that time, a market for Republic of Belarus IT-companies had already been established and the main players predominantly provided computer services under outsourcing schemes.

In 2005, the export volume of such services was under US$ 26.4 million.

In 2006, the export volume of computer and information services amounted to US$ 49.4 million (representing a 1.9 times increase on 2005). The share of the HTP amounted to US$ 17.31 million or 35% of total export volume, and that was just during the last seven months of the Park’s operation.

During the first half of 2015 at import level of US$ 1.7 million, the net currency avails of the HTP reached US$ 315 million.

In 2014, the export volume of the services offered by HTP resident companies amounted to US$ 585.2 million. During the first half of 2015 at import level of US$ 1.7 million, net currency avails of the HTP reached US$ 315 million.

The HTP activity has an vast positive effect on the economy of Belarus. The HTP promotes an additional influx of foreign investments and currency avails. In 2014, the park attracted US$ 34.3 million of direct foreign investment on a net basis.

In addition, the HTP resident companies are actively involved in major high-tech projects and industrial upgrading Belarus. Revenues from the sales of products and services of the HTP residents in the domestic market of the Republic of Belarus for 2014 were more than US$ 80 million.

The HTP Today

As of August 1, 2015, 144 residents are registered in the park, and more than 22 thousand people are working there. More than one-half of the HTP resident companies are foreign companies or joint ventures. During the first half of 2015, ten new residents were registered in the HTP and four of the existing resident companies expanded their activities.

The HTP acts as the largest and most recognized provider of IT-services in Eastern Europe and currently has customers in 55 countries. The HTP residents provide services to internationally renowned corporations such as Microsoft, HP, Samsung, Philips, Bosch, Toyota, Airbus, Honeywell, Reuters, Dun & Bradstreet, SAP, Oracle, IBM, Facebook, Google, Coca-Cola, MTV, Expedia, and many others. Four of the HTP residents are among the top 100 outsourcing companies in the world.

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About HTP Residents

The Belarusian Park has become of increasing importance in the global IT-scene. Many notable companies have opened offices in the HTP. For example, in 2014, the following development centers opened in the HTP: Hynix Semiconductor (South Korea), formerly known as Hyundai Electronics, one of the five leading manufacturers of internal memory in the world; Rakuten (Japan), one of the world’s largest holding companies, combining services in the field of e-commerce, banking, credit cards, e-books, media and other areas; and IAC (USA), one of the world’s largest media and Internet companies.

The first and one of the largest of the HTP residents is a Belarusian-American company called EPAM Systems. Today, EPAM Systems is the largest developer of custom-made software and one of the leading players in the field of IT-consulting in Central and Eastern Europe. In 2015, EPAM was placed in position 59 in the ranking of Fortune’s 100 Fastest-Growing Companies.

In 2010, Minsk studio Game Stream, an HTP resident and one of the main development centers of the company Wargaming, created a computer game entitled the World of Tanks. In 2012, the game appeared in a major international championship, the World Cyber Games, and on the national games in many countries, becoming a cyber discipline. In 2014, World of Tanks was named as one of the top five most profitable MMO games in the world.

In 2007, the HTP resident company Apalon started out as an outsourcing services provider, before progressing to produce its own products. Today, Apalon is one of the global leaders in the development of mobile applications for the Apple App Store, Google Play, and Amazon Appstore. In 2013, many Belarusian developed applications, such as Weather Live, Notepad +, and Emoji Keypad were downloaded more than 100 million times in combination. In 2014, in a landmark move, the American company Mindspark Interactive Network (an operating company of InterActiveCorp) acquired Apalon. This was one of the few times in history an American company acquired a Belarusian entity.

Business Incubator of the HTP

In 2015, to maintain high development rates in the IT sphere in Belarus, the HTP business incubator was established. The

HTP Business Incubator is designed to provide assistance to young startup companies that create and develop their own software and hardware products. Companies are provided with office space, and start-up teams are provided with co-working offices. An acceleration program was launched under which young IT-entrepreneurs receive expert support from specialists and top managers of successful companies, the HTP residents and leading consulting in addition to legal and venture capital firms. In addition, forums, seminars, workshops and IT/business master classes are held in the business incubator on a continuing basis.

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«The Business Incubator is intended to become a center of attraction for the talented, ambitious and creatively thinking young people. For these purposes, we have created all the necessary conditions for the productive work and development» Yury Sudarev, the head of a Business Incubator

In the spring of 2015, the business incubator hosted the Facebook summit on marketing, which brought together leading start-ups and entrepreneurs from Central and Eastern Europe. Following that event, the Republican IT-forum was held, which gathered the best representatives of the youth start-up movement of Belarus.

Some of the leaders of these teams already have experience of project management in the operating companies, including those commissioned by the world’s largest corporations.

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The HTP is actively promoting the development of the Belarusian IT-sector. As the research results to date demonstrate, the contribution the HTP makes to the national economy increases on an annual basis. Belarus has a huge potential for the development of the IT-industry and offers a favorable climate that attracts additional foreign investments. It allows Belarus’ high-tech sector to compete on an even footing in the global arena.

Business Incubator IT communications technologies software