History of Belarus IT Industry

The beginning is here - Belarus High Tech Park. Memories of the Future.

Ildar Daminov: You touched on the issue of human capital development, which is crucial for building a knowledge-based economy. In state-owned enterprises and traditional industries, the director is often seen as both king and commander. But in a rigid, top-down system where coercion takes precedence over persuasion, wouldn't you agree that fostering human capital becomes a challenge?

Valery Tsepkalo: Absolutely. The more bureaucratic a system is, the fewer opportunities there are for initiative and professional growth. In hierarchical structures, motivation often boils down to simply following orders rather than seeking the best solutions.

Such a system discourages initiative, which is often punished, as it is perceived as a threat to the status quo. Employees are expected to be obedient and compliant, rather than take risks, innovate, or experiment. Their role is merely to follow directives issued from above.

Once, Sergey Levteev, chairman of IBA Group, a Belarusian entrepreneur and IT innovator, shared with me how he made a bold decision to purchase an IBM mainframe—a high-performance computer costing over $1 million—to train specialists.

At the time, industry analysts from Gartner were predicting that mainframes would soon become obsolete. Companies were moving away from these bulky, expensive systems in favor of distributed computing and, later, cloud technologies. Even Fujitsu announced it would stop producing mainframes, urging clients to switch to cloud services.

Despite these forecasts and the fact that mainframe use in Europe had declined to just 3%, some top executives refused to transition to newer technologies and continued relying on them.

Sergey Levteev with the keys to his new office

Sergey recognized both a risk and an opportunity in investing in a mainframe for education. The risk was that, if analysts were right and the industry abandoned mainframes completely, the investment in hardware and specialist training would be wasted. However, the opportunity lay in IBA becoming one of the few European companies with deep expertise in supporting these systems.

A government enterprise director would never have made such a decision. If the project succeeded, it would be considered merely doing his job. But if he was wrong, he would immediately face investigations from multiple government agencies—the Financial Control Department, Investigative Committee, Tax Service, State Control Committee, and others. He would be accused of embezzlement, mismanagement, or corruption, leading to criminal prosecution.

This highlights a fundamental difference between Belarus’s rigid, hierarchical management model and the flexible approaches adopted in the High-Tech Park (HTP). It’s one of the reasons why Belarus remains one of the poorest countries in Europe with the lowest wages, while HTP salaries reached $2,000 within five years of its launch.

A system built on strict control cannot compete with one that encourages active participation, risk-taking, and innovation. In modern companies, motivation mechanisms like stock options, bonuses, and equity shares turn employees into stakeholders, making them invested in the company's success.

In contrast to state-owned enterprises, where managers answer to bureaucrats, leaders in modern companies are accountable to shareholders and colleagues. Corporate culture is built on partnership rather than hierarchy, shifting away from the outdated mentality of "I'm the boss, you're an idiot." The role of a leader is not to enforce control but to build strong, effective teams, where mutual respect—both professional and personal—forms the foundation of collaboration.

To illustrate this, I’d like to share another story that reinforced my belief that our people can achieve great things if given the right environment.

In Salt Lake City, Utah, I was invited to visit the Utah Science Technology and Research Initiative (USTAR). Unlike Silicon Valley, which grew organically over time, USTAR was a planned and managed innovation hub, created with government support.

In Silicon Valley, success was driven by a spontaneous, evolving ecosystem, with minimal administrative interference—except for Stanford University leasing land to private companies. Companies grew at their own pace, adapting to market forces without centralized regulation. By contrast, the Utah tech park was established and managed by the state government, providing financial incentives and access to research facilities for startups.

I visited Utah at the invitation of the Governor and the President of the Church of Jesus Christ of Latter-day Saints to give talks at Brigham Young University and Utah Valley University (then called Utah Valley State College). The vice president at the time was Rusty Butler, with whom I still maintain a friendship.

Let me make a brief introduction of Rusty Butler — as Vladimir Vysotsky sang, “without protocol.” In America, an annual "Iron Man" competition is held for athletes over 60, featuring a grueling course: 3.86 km swim, 180 km cycling and

42.2 km marathon run. For over 10 years, Rusty consistently placed 2nd or 3rd, making him a literal "iron man"—until Robert Downey Jr.’s movie character claimed the title. At my request, Rusty arranged several company visits and meetings with Utah’s business leaders.

One company that stood out to me was Evans & Sutherland, a pioneer in video effects and laser technology. They created planetariums (including the Moscow Planetarium) and pilot flight simulators for civil aviation. Their core technology allowed them to recreate real-world flight conditions: virtual airports, weather simulations and immersive cockpit visuals.

Virtual Aquarium by Evans Sutherland

By that time, they had developed over 300 airport simulators worldwide, covering diverse weather scenarios. I had the chance to try a flight simulator myself. Since there was no Minsk airport simulation, I chose Montreal’s airport, which had similar weather conditions—rain mixed with snow, crosswind at 10 m/s. I accelerated to 200 km/h, pulled the control stick, and successfully took off. However, landing was another story (laughs)...

After my “test flight,” I met with the company's CEO. Over coffee, he mentioned that their chief technologist was a Belarusian physicist from Minsk. Surprised, I asked if I could meet him, but the CEO politely declined.

I joked: "Don’t worry, I’m not trying to recruit him." He laughed and replied: "That’s not the issue at all. He’s paid so well that he doesn’t need to think about anything except his research. He just told us this morning that he’d be working on a problem and asked not to be disturbed until 5 PM."

Curious, I asked why he, as the company president, couldn’t simply call his employee in. Smiling, he explained: "If money is the company’s lifeblood, then I, figuratively speaking, am its heart, pumping that blood. But your physicist? He is the brain—the one creating solutions and making things happen. People like him are our most valuable asset."

I.D.: It seems like this experience was quite eye-opening for you. Did what you saw influence the management practices in the Belarusian High-Tech Park (HTP)?

V.T.: Absolutely! In fact, my dream was never for Belarusians to move to America—it was for a piece of America to come to Belarus (laughs).

That being said, given the realities of Belarus, it was impossible to implement modern management and motivation practices nationwide. Instead, I focused on creating one successful model—a proof of concept that could showcase what the future of Belarus could look like.

With HTP, my goal was to demonstrate that it was possible to build an efficient system where people earn a good living based on their skills and intelligence—not their political connections. The hope was that HTP’s success would inspire other industries to modernize and become a model that could eventually be expanded across the country.

To answer your question directly, it’s important to note that HTP’s management system was not a one-size-fits-all model. There were three distinct aspects to it:

how HTP itself was managed, the relationship between HTP’s administration and its resident companies (which we’ll discuss in more detail later), and the internal management structures of the resident companies themselves.

When it came to HTP resident companies, they followed the best global management practices, which is why HTP didn’t just become a key driver of growth for Belarus—it became a model that former Soviet states and Central and Eastern European countries looked up to.

One of the clearest contrasts between HTP-style management and traditional state-owned enterprises was how employees were treated. In old-fashioned industrial enterprises, workers competed for limited jobs at factories. This meant that managers could afford to be rude, arrogant, or even openly authoritarian because employees had nowhere else to go.

For example, if an engineer or technician worked at the only nitrogen fertilizer plant in the country, losing that job meant almost no chance of finding a similar position elsewhere. Relocating was often not an option, as job opportunities in the field were limited even outside Belarus.

This power imbalance allowed bosses to mistreat workers, knowing they had no choice but to tolerate it. But in the post-industrial era, everything changed.

The primary means of production was no longer heavy machinery or expensive industrial equipment—it became the personal computer. Employees were no longer physically tied to a specific workplace, nor were they dependent on a single employer.

For instance, a software developer can now switch jobs easily, and companies must compete for skilled professionals. This completely transformed management styles.

In modern companies, workplace relationships are no longer rigid and hierarchical—they are collaborative. Instead of a strict chain of command, where bosses give orders and employees follow them, organizations have adopted horizontal structures, where teams work together as equals, leading to higher efficiency and innovation.

A modern leader is no longer a dictator but a facilitator, whose role is to create an environment where employees can thrive. They don’t just offer competitive salaries—they also provide: a comfortable work environment, flexible work schedules, opportunities for career growth, and a friendly, supportive culture.

This people-first approach became a defining feature of HTP resident companies. Many introduced employee-focused services to simplify daily life, allowing staff to handle personal errands without leaving the office. For example, software developers could schedule a tire change or a car inspection during the workday, and by the time they finished work, their car would be fully serviced and ready to go.

I.D.: With this kind of structure, it’s no surprise that a CEO, whose main role is to create an environment where specialists can fully focus on their work without distractions, might earn less than the top developers working on critical projects.

V.T.: This became a widespread phenomenon among our HTP resident companies. As Arkadiy Dobkin, the founder of EPAM, the largest IT company in Belarus, once told me: "If I lose a director, it’s inconvenient, but not a disaster. But if I lose my chief technologist or even a lead developer—that’s catastrophic." After all, a company’s most valuable asset is not its ability to navigate local bureaucracy but the knowledge and expertise of its specialists—this is what determines success and global competitiveness.

I remember an interesting moment that illustrates this shift. The HTP administration shared a building with EPAM and System Technologies, and on the first floor, there was a cafeteria. One day, I went there for lunch. Since there were no empty seats, I sat down next to two mid-level EPAM managers and unintentionally overheard their conversation.

One asked the other: "How do you invite employees to meetings?" The second manager began listing steps: "I outline the topic, provide context, set clear objectives…" The first manager listened and then added: "You forgot to include this one thing…" (I don’t remember exactly what it was.)

Curious, I joined the conversation and asked: "Why make it so complicated? You’re the boss—just schedule the meeting, and they’ll come." They both smiled and replied: "That’s not how it works. If they don’t see the value, they just won’t show up. They’ll say they’re busy with urgent tasks."

This is a fundamental difference between the old and new economies. In state-owned enterprises, a boss gives orders, and employees follow them, whether they like it or not. In the post-industrial economy, this approach no longer works—employees have real value, and if they aren’t engaged, they simply won’t participate. No one will openly refuse, but they’ll always find a reason not to attend.

People who are used to horizontal communication, mutual respect, and personal choice in the workplace extend these expectations to society as a whole.

In the past, a strict hierarchy was the norm—decisions were made at the top and simply passed down the chain. But in today’s world, there’s a growing demand for openness and participation.

Even something as simple as inviting employees to a meeting reflects the foundations of political democracy—authority can no longer just dictate; it must explain, persuade, and engage.

People who built their success through their own skills and hard work—rather than relying on connections or favors from a powerful figure—see the world differently. They feel independent and self-sufficient. They understand that their achievements are their own, not the result of someone's generosity or political influence.

This changes their relationship with the state. They don’t just want to live in their country—they want to be involved in its development, shape its future, and influence decision-making. They are no longer willing to be silent, powerless cogs in a bureaucratic machine, forced to pay taxes while being excluded from public discussions and policy-making. They demand transparency, honesty, and fairness in governance—whether it’s at the company level, within their local community, or across the entire country.

Thanks to HTP, a new class of people emerged in Belarus—individuals who no longer waited for handouts or relied on political favors. HTP’s resident IT companies were the driving force behind these changes, creating demand for professionals across various fields—not just programmers, but also marketers, financial analysts, event managers, restaurateurs, architects and construction specialists, etc. These professionals were building office spaces and residential complexes—not for state contracts, but to meet the needs of the booming IT sector. By 2020, according to Colliers, nearly 70% of office real estate in Minsk was owned or leased by HTP residents.

The growth of the tech sector in Belarus also triggered a wave of educational initiatives. Numerous training courses and schools emerged, offering additional learning opportunities for children and extra income for young teachers. At the same time, thanks to high salaries in the IT industry, the retail and service sectors also flourished. New restaurants, cafes, shops, fitness centers, and entertainment venues popped up across the city creating a lot of jobs out of the government participation. HTP wasn’t just building a new economy—it was reshaping urban life, creating a demand for modern housing, high-quality services, and well-designed public spaces.

All these people—professionals, entrepreneurs, and innovators—no longer wanted to live in a system built on rigid hierarchy and nepotism, where decisions were made behind closed doors by a handful of elites. They wanted a society that respected individual rights, where their voices were heard and their opinions mattered. These fundamental social changes became one of the key factors leading to the events of 2020.