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upstart writes:

The invasion of Ukraine supercharged the decline of the country's already struggling tech sector—and undercut its biggest success story, Yandex:

You may think, as I did, that Russia's current tech woe's are as a result of their invasion of Ukraine, or perhaps the annexation of Crimea. But it seems that the real problem started back around 2011 when it decided that the population having free access to information was not a good thing and, anyway, there must be money to be made if someone can take the tech industry under their control.

In Russia, technology was one of the few sectors where people felt they could succeed on merit instead of connections. The industry also maintained a spirit of openness: Russian entrepreneurs won international funding and made deals all over the world. For a time, the Kremlin seemed to embrace this openness too, inviting international companies to invest in Russia.

But cracks in Russia's tech industry started appearing well before the war. For more than a decade, the government has attempted to put Russia's internet and its most powerful tech companies in a tight grip, threatening an industry that once promised to bring the country into the future. Experts MIT Technology Review spoke with say Russia's war against Ukraine only accelerated the damage that was already being done, further pushing the country's biggest tech companies into isolation and chaos and corralling its citizens into its tightly controlled domestic internet, where news comes from official government sources and free speech is severely curtailed.

"The Russian leadership chose a completely different path of development for the country," says Ruben Enikolopov, assistant professor at the Barcelona School of Economics and former rector of Russia's New Economic School. Isolation became a strategic choice, he says.

The tech industry was not Russia's biggest, but it was one of the main drivers of the economy, says Enikolopov. Between 2015 and 2021, the IT sector in Russia was responsible for more than a third of the growth in the country's GDP, reaching 3.7 trillion rubles ($47.8 billion) in 2021. Even though that constituted just 3.2% of total GDP, Enikolopov saysthat as the tech industry falls behind, Russia's economy will stagnate. "I think this is probably one of the biggest blows to future economic growth in Russia," he says.

[...] Yandex is just the latest example in the Kremlin's long history of trying to take control of Russia's tech companies, fearing what might result from the population's unfettered access to information online. These efforts date to 2011, when Facebook and Twitter helped spark the largest antigovernment protests in the country since the 1990s.

Some in the tech industry joined the protests, hoping to help put Russia on a more liberal, democratic path. Igor says he was one of them. But he gave up on protests after a few years. "It felt hopeless," he says.

In the ensuing years, Russia imposed increasingly restrictive laws, arresting social media users over posts, demanding access to user data, and introducing content filtering. This put pressure on both Western social platforms such as Facebook, Twitter, and LinkedIn (which has been blocked in Russia since 2016) and their domestic counterparts.

VKontakte, often described as Russia's Facebook, was "de facto nationalized" after its founder, Pavel Durov, was squeezed out of the company in 2014 and Kremlin-aligned oligarchs assumed control, says Enikolopov. After fleeing the country, Durov, who would later go on to create the messaging app Telegram, described Russia as "incompatible with Internet business." According to a study from the National Research University Higher School of Economics, more founders of "unicorn" startups leave Russia than any other country.

The Russian government thought it should control everything, says Enikolopov: "Tech companies could not be left alone."

The entire article is an interesting read if you have a few minutes to spare...

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