Brain power key to the future of Russia

  • 2002-07-11
  • Marielle Eudes

Unlike most of his peers, this leading Russian businessman shuns bodyguards, owns no villa on the Cote d'Azur and enjoys an unblemished reputation for probity.

Anatoly Karachinsky is, nevertheless, a Russian high-flyer, head of the country's largest IT company and a pioneer in an area where Russia has yet to make an impact.

Last month he was named on a list of 50 "stars of Europe" drawn up by the magazine Business Week; he is the first Russian to gain this distinction together with President Vladimir Putin's economic adviser Andrei Illarionov.

As founder-president of Information Business Systems, he believes that Russia's future lies not in black gold - the huge oil reserves that form the bedrock of its economy at present - but in gray matter - the intellectual prowess of its people and its capacity to develop new information technologies.

"In the world of computers, and for IBS in particular, everything changed totally with (the) Sept. 11 (attacks on the United States)," Karachinsky said.

"The continuing tensions in the Middle East and in the Indian sub-continent have changed things around in Russia's favor. Dozens of major international groups which traditionally sought programming skills in India or Asia have started contacting us."

Apart from being geographically closer to the West, Russia has a number of substantial advantages, Karachinsky said, citing a "highly qualified and cheap labor market," and programmers "well-known for their creativity and ability to find original solutions."

Among his clients are some of the West's biggest names, including Boeing, IBM, City Bank and Credit Suisse First Boston.

Sales, rising annually at a rate of between 25 percent and 30 percent, stood at nearly $220 million last year.

For a brief moment Kara-chinsky was associated with the "oligarchs" - the fabulously wealthy Russian businessmen who got in on the ground floor when the country's resources and utilities were being auctioned off at rock-bottom prices - and invited for talks in the Kremlin.

But the corridors of power are not a natural haunt for this former engineer whose first job came in ticket-bookings for the Soviet rail system.

He gave up his "safe" state job in 1986 to join an Austrian firm that was one of the first to profit from Mikhail Gorbachev's perestroika reforms.

This gave him access to his first computer - then a luxury far beyond the means of most Soviet citizens.

On the advice of one of his early fans, Internet pioneer Esther Dyson, he decided to create his own firm, IBS, in 1992.

It started life with 12 employees and one main client, the leading Russian bank Sberbank.

Now, the group's 2,000 employees range over every aspect of IT, working for almost all of Russia's giant corporations.

Karachinsky believes the company will continue to grow by means of acquisitions. "We're ready for launching on a foreign stock exchange. We're still sizing up where and when."

The IBS chief initially lined up a U.S. Nasdaq launch set for last November, but the collapse of world stock markets two months earlier and the subsequent fluctuations of high-tech share values meant that the project had to be scotched.