Global IT Company Eyes Kazakhstan as Next Hub

ASTANA – UST Global, an international information technology services and software development company, is exploring the possibility of moving to Kazakhstan.

UST-Global-logoThe company, which has a presence in the Americas, Europe, East and South Asia and the Middle East, now wants to expand into Central Asia and UST Global Chief Commercial Officer Murali Gopalan told The Astana Times that Kazakhstan is “a natural choice.” According to him, Kazakhstan has great IT potential – and can’t afford to waste it.

In June, UST Global CEO Sajan Pillai, Gopalan and other company executives visited Astana and met with Prime Minister Karim Massimov and other ministers to discuss establishing a presence here, after which they rated the country’s attractiveness highly.

The government’s support for innovation and the IT industry is one of the country’s key attractions, the executives said. “We found the Kazakhstan government to be extremely progressive and dynamic [and] keen to build an innovative information technology industry. The government is very forward-looking in this regard and has invited constructive dialogue from us,” said Pillai. With the company’s experience in developing the IT industry in hitherto unknown IT destinations, like India, Mexico and other countries, they say, they can have a positive impact on the level of IT services in Kazakhstan.

“In addition to being a large market for advanced software services, the country’s involvement in the Eurasian Economic Union also allows a larger market access. This is also extremely attractive,” Gopalan said.

The government’s investment in technology parks is also a big plus for the company. “The Technology Park in Almaty is a great start for Kazakhstan. … Technology parks play a vital role of being a catalyst for labour force aggregation, especially in knowledge industries, where sophisticated interactions create innovations,” Gopalan said. “The Almaty Technology park … has high potential to aggregate the technology professionals in the country. Together with the IT universities that exist and that can be established in future, a great story in information technology services in Kazakhstan can be written.”

The company would expect to continue serving their global customer base with the move into Kazakhstan, Gopalan said. “[G]lobal organisations have requirements related to IT that stem from different parts of the world. At this time, there are a limited number of global IT organisations that have the capability to serve such needs out of Kazakhstan and neighbouring countries. We expect to be able to extend our service to this geography.”

They would also be interested in serving local businesses and government organisations within Kazakhstan and in neighbouring countries, he said.

Kazakhstan can’t afford to dawdle on developing its IT sector, Pillai said. “Technology is the new oil,” he said. “Information technology is today, without a doubt, the industry with the strongest growth potential worldwide. Nations cannot afford to ignore the importance of a robust IT industry to grow their economies, especially as driven by a middle class population.”

There are some challenges to establishing a global business in Kazakhstan, however. A lack of skilled workers is often listed as a problem, but the UST Global representatives said they found local talent they said they could build on.

“We have observed that Kazakhstan has excellent engineering and maths talent, which is vital for the IT industry,” said Gopalan. “We witnessed the work of some of the talented engineers in the country in the areas of robotics, artificial intelligence and so on, that has excellent potential.” What UST Global would like to do, he said, is bring businesses operations problems to this talent base and allow innovative solutions to flourish.

Other challenges relate to infrastructure and changing clients’ attitudes. Gopalan said, “The typical challenges for our business centre around the attraction and retention of good talent in the volumes that are needed by our business, the ability to convince global customers to have their IT requirements serviced from Kazakhstan instead of more popular destinations like India and infrastructural challenges including power, bandwidth, easy access to hardware, et cetera.”

In the World Economic Forum’s recently released Global Competitiveness Index, Kazakhstan’s ability to attract talent was ranked 37th out of the 144 countries surveyed, but ranked 71st in its ability to retain it. UST Global would enter the country with a plan to overcome the talent challenge, Gopalan said.

“We have several talent sourcing models that could help us overcome the talent challenge. Our understanding of our clients’ requirements allows us to position Kazakhstan’s strengths very well to overcome [the challenge of convincing clients to use IT services from Kazakhstan].”

Infrastructure is in the hands of the government, he said. “We have a high level of confidence that the government of Kazakhstan has the highest commitment to ensuring appropriate infrastructure that is necessary for the IT industry to succeed,” he said.

The tax breaks, including suspending corporate and land taxes for 10 years, and other incentives for investment announced earlier this year by the Kazakh government would be a great bonus, the UST Global executives said, but not the main reason they’d be drawn to the country. “We applaud the tax breaks and investment incentives that have been announced by the government of Kazakhstan. However, UST Global’s decision to move ahead in Kazakhstan is based on the immense potential that we see in the region, both as a producer and as a consumer of information technology services.”

In general, they say, the country is making the right moves to attract sustainable business. “Our experience with the government showed us their speed of decision making, solid support for our plans, openness in hearing our feedback, willingness to invest in infrastructure needed to create jobs and business.”

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