For Unlikely Tech Hub in Russia, Recession’s a Godsend

Russia's economy is in a quagmire thanks to sanctions and low oil prices, but it's a boom time for Mikhail Khorpyakov.

The 32-year-old, who develops software for Russian and foreign clients, has seen his earnings rise over the last two years even as the country fell into recession and the national currency lost half its value.

At the airy, well-lit office he shares with friends in a newly built block in the thriving provincial tech hub of Voronezh, Khorpyakov recalls his last workspace was "in a basement, with noisy sewer pipes all around," before their earning power allowed them to aim higher.

Khorpyakov and his friends are part of an unlikely tech revolution in Voronezh, a former Soviet industrial town where startups and online contract work are proving the only source of good jobs and escape from economic decline.

In fact, the crisis has turned out to be the tech sector's biggest fortune. As Russia fell into recession, the ruble's nosedive to record lows made tech workers here much cheaper for foreign companies to hire or buy from -- letting them compete with traditional tech offshoring hubs like India and China.

Even as officials in the United States and Europe warn about the threat posed by government-backed Russian hackers, tech workers in Voronezh say security concerns don't affect their international business relationships.

Ivan Grishaev, a 30-year-old software engineer, moved to Voronezh with his wife and son from Chita, a remote city in Eastern Siberia, in 2013. He chose Voronezh because it offered better career options, lower rent and warmer weather than traditional magnets for migrants such as Moscow or St. Petersburg.

First he worked for DataArt, a Russian software company with more than 800 employees in Voronezh. But when the ruble's value plunged, Grishaev struck out on his own, working directly for foreign clients. As well as...

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