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Before Innopolis, Tatarstan Built Kazan IT-Park

All news are available in English since March 5

31 July 2012

This article was orginally published on The Kazan Herald website and paper.
by Wyatt Ford
In 2007, Russia launched a federal program to set up “technoparks” (technology parks) across Russia, as part of a bid to help wean the country’s economy off its dependency on oil.
The Tatarstan Ministry of Information and Communication was one of the first regions to jump at this opportunity. In October 2009, a newly built Kazan IT-Park opened its doors for business. The park was one of the first technology parks to be built under the federal program, which put up half of the funds necessary for its creation, an investment matched by the Tatarstan Ministry.
Kazan IT-Park is technically a “Gosudarstvennoe Avtonomnoe Ucherzhdeniya” (literally, State Autonomous Establishment). What this means is that, while the park is owned by the Tatarstan Ministry of Information and Communication, its operations are run independently, as if it was a business in the private sector.
As such, Kazan IT-Park receives no money from the Tatarstan budget. To the contrary, IT-Park Director Dinar Nasyrov argues that the park turns a profit for the government, via taxes on revenue. IT-Park’s revenue was 759 million rubles ($24 million) in 2010. In 2011, the park brought in 2.8 billion rubles of revenue, on which it paid some 432 million rubles worth of taxes.
IT-Park’s projected revenue for 2012 is 3.9 billion rubles, Nasyrov explained to The Kazan Herald in May, sitting in a café in the building’s lobby. At this rate, if one considers taxes paid on this revenue as return on investment, the government will redeem its initial investment by 2014.
The park earns this revenue through three principal channels.
First, the facility has a variety of conference rooms, seminar halls, and auditoriums which can be rented for commercial events.
Second, The Kazan IT-Park data center provides data storage solutions with a strong broadband connection of up to 300 gigabits per second. Tatarstan’s well-known electronic government is all stored in this data center, one of the first centers in Russia to offer off-site storage solutions. This spring, the data center hooked a big client, with the automobile manufacturer Kamaz signing a contract that will transfer the bulk of their infrastructure to the data center.
According to Nasyrov, data center services are cost-effective and efficient solutions for businesses. Furthermore, he added, confidential information is actually more secure kept remotely in the data center than on site for most businesses.
The third source of revenue, which provides the core of Kazan IT-Park’s identity, is office rentals. The park’s 10,000 square meters of office space currently houses 76 companies employing 1600 people, according to Kazan IT-Park Press Service.
1,000 square meters of this office space is set aside for local startup companies. The Business Incubator offers an open space with 6-person work areas for up to 20 startups. Resident startups, who pay 6,000 rubles a month for the fully-equipped work areas, are chosen through a demanding selection process that culminates in a final presentation in front of a jury of experts from the likes of Yandex and Microsoft Russia.
Applications for the eighth selection round are currently open, and the competition is stiff – during the seventh round, only two of the twelve projects who made it to the final round were allowed to move into the Business Incubator.
Kazan IT-Park has quickly become a popular workplace for IT businesses, whether established or startups. Not only is the IT-Park’s state-of-the-art facility a good showroom for potential customers, partners, and investors, Nasyrov explained, but companies have found that it is easier to hire new talent with the backing of the IT-Park brand.
Nasyrov did not mince words when speaking of the park’s accomplishments – for him, Kazan IT-Park is a clear success story. “We have shown that there is really a growing market for IT, and that local IT companies are growing very fast, and they can make products which can compete with products of multinationals,” he said. “This is a place that represents that there is huge demand and a huge trend for IT development.”
The accomplishments of Kazan IT-Park have laid the foundation for the spread of IT across Tatarstan. This fall, Kazan IT-Park plans to open a second park in Naberezhnye Chelny. Similarly, Kazan IT-Park provided much of the social proof underpinning Innopolis, a new city centered around the IT sector that Tatarstan plans to build on the outskirts of Kazan.
Kazan IT-Park has also renewed interest in IT education. Last year, the park helped Kazan Federal University open a new faculty, the Higher School for Information Technology and Information Systems. The park is similarly helping develop a new IT high school in Kazan, a school that Nasyrov believes will soon become popular. When students and parents visit IT-Park, he explained, they begin to discard their preconceptions that becoming a lawyer or manager is a better career path.
“The average salary is now more than 35,000 rubles a month in IT Park, so it’s 50 percent more than the average salary within the Republic of Tatarstan,” said Nasyrov. “And then you see the cars – we have new parking spots being set up here almost every year.”