Ecosystem for "picky geniuses".

Ecosystem for "picky geniuses".

Comments of InfoMarket agency

Moldova officially launched a new, practical work for the development of first element of (IT) information technologies ecosystems habitat . IT ecosystem designed for "organisms" from this sector, companies and programmers. In other words, the aim is to create a habitat for IT-industry in Moldova, which is like a bee on a flower to attract IT-specialists from the outside and it will help to keep local talents from searching "honey" in other countries.

The Ministry of Information Technology and Communications (MITC) with the support of USAID Moldova launched conceptual foundation in early August in order to create IT ecosystem. This project should take the form of an action plan with clearly defined results in one and a half months.

There is no purpose to compete with the world's "Silicon Valley" obviously, the project targets are startup projects, as noted by minister Vasile Botnari, there are a lot of examples of successful startups in the world, capitalized billion-dollar business within months (he specifically mentioned Skype and WhatsApp). (By the way, shortly before speaking in Parliament on the issue of " No trust" vote to his Cabinet, the Prime Minister Pavel Filip said that the Moldovan economy should be developed on the example of the game "Pokemon GO" : Moldova should focus on such areas as games and IT-technologies, which in demand in today's market, he noted ).

IT sector has long attracted the attention of the country’s leadership from the economic development point of view. There was created state program "Moldova Digitala-2020" and strategy for improving the competitiveness of IT ground, implemented by MTIS. Also, MTIS advancing a bill to create a virtual IT parks for specialists which can be physically located anywhere in Moldova, as well as flat tax of 7%, exemption from VAT and exemption from customs duties on import of equipment. To summarize the results of Moldovan ICT Summit 2016 in April, IT ground is the most relevant for the country.

Vasile Botnari announced the statistics: over 1100 IT companies registered in Moldova today, more than 10 thousand professionals producing goods for $22 million at the local market and $70 million for export. In this case, as the world’s practice shows the potential growth of the industry in this country with traditionally strong educational base is terrific, that is also including similar experience of small countries.

Basically, we are talking about the creation of ecosystem for entrepreneurs in IT ground, focused primarily on startup projects, unfortunately, Moldova is not a pioneer in startups, this is a huge disadvantage but can benefit from the experience of countries which already implemented startup programs (such as Malaysia, Chile, Belarus, Poland, Denmark, Lithuania etc.) and that is a way to go. USAID Moldova involved some experts at this stage to define three main components of "Startup-Moldova" project: attracting Startup Visa specialists; fundraising experts; regulatory and infrastructural habitat.

Doina Nistor, the project manager of USAID Moldova said: programmers are people who are very intolerant towards bureaucratic procedures, especially when it comes to their legalization in one or another country. They don’t want to bother about it and picking the place where you can create "one-click business opportunities". "Star-up Visa is a state program that delivers the message: We are open and willing to accept talents from other countries, you can get the appropriate visa in our country very easily, live and work here." Of course, a lot of work to do here with the Migration Bureau, the National Employment Agency and many other agencies. These type of foreign-local experts’ activities and support of USAID Moldova, could push up the development of the industry promptly.

The second element for this industry environment, such as water and air in a biological ecosystem, must be sponsorship. The amount of funding injections should be determined for this industry in Moldova.

"We consider several models: from Business-Angels to large investment funds support" says Doina Nistor. Business-Angels is the domestic commercial investors, who have their own business, but have additional money for investments, they might want to invest personally or with their partners in challenging IT startup projects, it’s meant to be like a club of domestic investors and it is on its stage of creation. This factor could make the industry more attractive and contribute in favor of startup projects development.

Dovydas Varkulevichus (Dovydas Varkulevičius), Lithuanian expert created terms for attracting various foreign funds, from venture to investment funds. The example of Lithuania with a population of 3 million is relevant enough for Moldova. The government allocates resources to venture funds (2-3-4-5-10 million USD) in many countries, under the condition that venture funds would invest their resources in the development of IT startups in the country. It can be government funds, international credit resources or foreign investors.

When a project grows into something bigger than just a startup, there is an elaborated mechanism to attract higher investments. It is intended to develop different strategies in Moldova and implement them into IT ecosystem, so that the industry becomes a solid infrastructure but not a slippy business or losing time and specialists in the future.

Favorable entrepreneurial ecosystem also provides a multi-level (not only financial) state support - in relief of tax legislation to provisions of physical infrastructure areas "environment", including the implementation of public-private partnership, the creation of IT parks, IT accelerators etc. Moldova implemented many initiatives for the development of IT sector in recent years (many of them with USAID support), which are fundamental for future IT ecosystems: Startup Weekend Moldova (http://www.up.co/communities/moldova/chisinau/startup-weekend/7124), Generator Hub (http://www.hub.md/), Dreamups Innovation Campus (http://www.dreamups.com/), Tekwill (https://www.facebook.com/tekwill/), iHub etc. The latest project will be launched in September this year. The main scope of IT undustry is really get a good "habitat" here, in Moldova and still a lot of work to be done.

There are a lot of talks about problems to be solved in six weeks but anyway mid-September will be a breaking point for the program to be transformed into a public project, creating real IT ecosystem for Startup-Moldova.

There is no doubt about the fact that the program will be running but it depends on the activity and interest of local investors, professionals, experts and authorities.

Authorities expressed their involvement but they depend on political events in the country. Forthcoming autumn in Moldova will be very hot because of the election campaign and presidential elections, political parties mobilize all their resources. Is it possible to expect rapid adoption and the beginning of the program Startup-Moldova in such circumstances?

Programmers - very capricious people, most of them are not involved or interested in politics, they are like fish looking for crystal clear and less dangerous rivers. Political stability of the country is very important for development of IT industry. Experts say that Moldova has still a small chance to catch on and become one of the cabins of the world’s "4.0 Industry" locomotive, each month (yes, the countdown goes on for months) is relevant and could be crucial when it comes to catch up "4.0 Industry" locomotive. // 04.08.2016 – InfoMarket.