Social IT experiments would help Moldova to become an example for other countries

Vyacheslav Kunev is an IT professional with more than 30 years of experience in IT. President of the Moldovan ATIC Association since 2008, lecturer at the Technical University of Moldova and a successful entrepreneur. He is the founder of several startups and IT companies, such as Deeplace, Gustos.life, FoodHouse and the innovative company Winetech.

I was curious to discuss with Vyacheslav ways to develop the IT industry in Moldova, so that the IT market becomes more attractive for foreign companies.

We all know that IT park and ATIC make a huge contribution to the development of IT industry in Moldova. We also know that the IT park will end in 2028. Do you think the authorities will be able to prolong the IT park?

For any large company, the planning period is at least five years, so they will not come to IT park if there are possible changes to the tax environment in less than five years. Therefore, 2035 seems to be the most optimal timeframe.

There are other important aspects to consider. IT park is a structure where IT companies register and pay taxes under a special tax regime. Since the current IT park tax regime is very attractive, companies that are very indirectly related to IT are trying to get in. In fact, now, any business that uses computers can say that they have an IT business. This situation may have significant risks for the IT park.

What way out of this situation do you see?

I think it is necessary to separate IT companies from service companies and, if possible, make a separate park for them. And there may already be a different rate of taxation. But for this purpose, the state, first of all, should understand what kind of service companies it wants. After all, they can be legal, financial companies, and call centres. It seems to me that this should be a separate story. Because if now it turns out that some company pretended to be an IT company, but actually avoided taxes in this way, it may affect the very idea of IT park.

Right now, IT parks offer the most favourable tax conditions in Europe. But, judging by the latest news, it looks like they are about to start changing them.

It should be the lowest in the region, because our market is small. Few people will come here for the sake of the market. Large companies immediately consider the risks. There should be a risk fee, because this is entering an unstable country next to another country where there is a war. I think there should be a rate that will outweigh both the limitations of the market, the imperfection of legislative things, and the risk fee. In my view, when the government tries to raise the rate of taxation, companies consider and realise that it is not profitable and leave. Unfortunately, we have nothing to offer at the moment other than the best rate in the region. We cannot say that at the moment we have the best situation in the region in terms of protecting the rights of shareholders and businesses, as well as the best ease of doing business.

It is also important to realise that all this is happening against the background of the fact that we have a very small market of programmers. According to various estimates, we can count 30-35 thousand. This is extremely small. In this case, the changes in legislation should not only be tax changes, but also forces aimed at a sharp increase in the number of specialists. By the way, in this regard, relatively recently there was a dialogue with one company that was ready to come here, but they needed 200 engineers at once. 200 at once!

I agree, it is unlikely. What should Moldova do to increase the number of good programmers?

The problem starts at school when kids enter grades 10 - 12 and most of them choose humanities classes rather than real classes. About 1:3. All children already then make a choice not in favour of IT. That is why we have to tell children from school that IT is the future, and they should go there.

Also, we must significantly increase the capacity of our educational institutions, but here another problem appears - the availability of teachers. Today there is a terrible shortage of IT teachers. Their salaries are even embarrassing to say out loud. Good teachers are, as a rule, those who work and come to teach. This is an additional load. We need to substantially increase their salaries so that they would be really interested in it.

As far as I know, you've already started doing something for schools.....

At the moment there are a number of initiatives such as Clasa Viitorului and Tekwill School. But this is not enough yet. There should be constant educational lectures that there are more opportunities, prospects and money in IT. We need to see how many children go to real classes and how many to humanitarian classes, and at least reach parity.

There is another interesting point - there are very few product business models today. 90% of the Moldovan industry are service companies. This is very difficult to develop in a small market. Accordingly, the only way is to stimulate start-ups that initially set themselves the task of going outside Moldova.

What would you suggest to increase children's interest in IT?

I would recommend thinking in global ideas straight away. These ideas can be divided into two parts: services and something related to know-how. And if you choose the latter, then we should have R&D centres in universities, where there is always research and development of what you are trying to do, and then somehow monetise it. And this is where the university starts to play an important role.

It is necessary to make it so that there are 2-3 universities in Moldova, which will be able to unite students, scientists and business. Business comes to universities and offers its ideas. If you want, we attract you and during your studies we try to realise this idea. The university can be a co-founder in such a case. In the end, if it doesn't work out, the students have learnt, gained experience. And if it works out, then everyone starts earning, including universities. Such a mechanism should be worked out so that good guys from the first grade or the first year of study are already involved in some interesting projects.

What would it take to realise this idea with universities?

To make all this happen, we must have an ecosystem of venture capital funding. And do not forget about government programmes. To make it all flow, so that universities work on dozens of startups all the time.

In fact, if we give everyone a chance to try some startup ideas, there won't be many really worthwhile ideas in the end. That is why the money is small. There is a high probability that guys who are taking up a startup for the first time will not be able to get the money. 

Make more bets on startups that have already failed, that we have already learnt from and that already understand how to interact and what to look at. That is, when you try the third or fourth startup, it makes sense to take a closer look and invest more seriously.

Apart from universities and startups, what other avenue might be suitable for our small market?
Moldova can also become a territory where large-scale social IT experiments are conducted. I like those related to local communities, such as small towns or villages. This is the idea of Liquid democracy - when we in communities create systems of permanent online referendums on any issue with the possibility of identifying opinion leaders.

Over time, opinion leaders start to emerge who have 100, 200, or 300 votes on a certain type of issue, on ecology, construction, animal welfare, and so on. So we digitise the opinion leaders and give them, as experts, the power to vote. Now that is a very interesting concept for which we need to find an IT solution.

Why is it an IT solution?

Because a system like this is first and foremost IT. An app in the phone, authentication, data protection, data processing, etc. But from the user's point of view, it should be a very simple solution and allow them to participate in voting or delegate their vote.

Is it like the concept of an e-state?

I mean, it's not just a vote. It's not like what happens in parliament now, when you elect a person and he sits there for four years, no matter what he does. Through this kind of IT solution, we are significantly strengthening local communities, because there are opinion leaders there who can write a project, digitise it and push it through to a vote. The key point here is that we specifically create an environment where we identify opinion leaders who have the power to vote.

It will be interesting to think about what size of settlement this works in and what size it does not. How does it work in populations of different ethnic or gender composition, education, and so on. There would be no lose-lose here. It's an ongoing study that gives us very important information about how decisions are made, and as a result we can have a local government tool where a decision is made with everyone's voice in mind.

It's a different way of development....

It's about moving to a networked state. When we realise that our citizens are mostly around the world, we have to interact with them in a different way. And it's only electronic interaction where they want to interact and it's interesting for them. If we engage them in the localised communities that they come from, that's where it becomes a different story. And that's purely an IT solution. If we, as a country, do this for 5-7 years, we will gain experience.

Thus, Moldova can combine its IT development path:
1. The first is outsourcing people, jobs, and so on.

2. Two, this is the way when we seriously invest in startups, and give startups a place to stay. Startups can be taught from school, I would teach students about startup culture. You could ask them to launch some kind of business over the summer. It doesn't matter if it fails. They'll get experience. So that they have a clear contract with the university, where everything is legally verified. For example, the university would take on financial accounting or legal defense of a patent. 

3 And the third is when we create stories that no one else in the world has ever done, and we start doing it ourselves as a way of having a fundamentally new social experience. Then we become a player who has something to offer the world.

It would be interesting to try to do such a thing and see the results.

Let's move on to the topic of opening companies. It seems that the process of opening an SRL and joining an IT park has been simplified, and there is digitalisation, but it is still not working very well.

Yes, this is a problem. We need to make it possible to open an SRL for founders from another country in one day. This is where we should take the example of Estonia. I always dislike it when the IT industry is considered out of the context of the whole state. We are inevitably faced with the fact that there must be a good digitalisation of the whole state, and we must be attractive in terms of doing business, law enforcement and other aspects. It is a complex issue.

But there are some things that are up to us and our state. I agree, there's no money. But I think if we agreed to do social experiments, we could go to another level. When we conceived IT park, everyone said it was impossible. When we conceived Tekwill, everyone said it was impossible and no one would give us money.
So I think we need to set the next impossible goals, and then something might work out.

Totally agree...thank you so much!