Russian Tech Industry Faces ‘Brain Drain’ as Workers Flee
Posted by Vuong Hoang. Colgate class of 2024.Source: Metz, Cade, and Adam Satariano. “Russian Tech Industry Faces ‘Brain Drain’ as Workers Flee.”The New York Times, 13 Apr. 2022.
The Russian-Ukrainian War occuring in the Republic of Crimea right now is having massive and potentially irreversible economic impacts. The refugee crisis and the many sanctions against Russia are not the only factors that will have long-lasting implications on the global economy, as there is another significant shift happening inside Russia – the Russian tech industry’s “Brain Drain” crisis. According to a Russian tech industry trade group, “between 50,000 and 70,000 tech workers had left the country” with “an additional 70,000 to 100,000” soon to follow (Metz and Satariano). There are many reasons why there is a significant outflow of tech workers. Many object to Putin’s regime and have decided to leave, while others were pulled out by their companies, many of which were based outside of Russia (Metz and Satariano). Because of sanctions on Russia, employers are struggling to pay their employees due to barred access to banking and internet service. Meanwhile, tech employees themselves are unable to gain access to “crucial computer hardware” as well as other “fundamental tools needed to construct modern software” (Metz and Satariano). As a result, the return to skill in Russia for tech workers has plummeted below the return to skill in other countries, leading to positive selection and the mass emigration of the tech industry. In theory, the mass outward movement of high-skilled tech workers should lead to a drop in labor supply and, therefore, raise the equilibrium wage for non-emigrant high-skilled workers. However, according to the article, many Russian tech entrepreneurs such as Artem Taganov are fleeing the country as well (Metz and Satariano). Taganov and other entrepreneurs are employers: their departure from Russia, and by extension their companies, will lead to a fall in the labor demand. This drop in the demand and the supply of other factors of production may very well negate any positive wage effect that a fall in labor supply would have caused.
One thought on “Russian Tech Industry Faces ‘Brain Drain’ as Workers Flee”
Voung, I really enjoyed your blog post because of how relevant the topic is today. With the Russia-Ukraine War continuing as we speak, the refugee crisis that we can see around the world is very prominent and can be examined closely. As for Russia, it is interesting to see the extreme number of Russian’s that are choosing to leave the country because of Putin’s regime. I assumed people would be leaving the country, but the extent to which it is happening is extremely surprising to me. I also thought that your analysis of “brain drain” and the economic impacts of this concept were very thorough. Clearly, with the number of high skilled workers leaving the country, we can expect to see a drop in labor supply, which would ultimately lead to a rise in the equilibrium wage. Overall, very well written.