Off-offshoring from Russia to Ukraine: How Russian Transnational Entrepreneurs Created a Post-Soviet IT Offshore

abstract

Offshore has become a staple term in the lexicon of economic globalization, and, yet, it has also become a bit of a black-box term. The range of meanings attached tends to mask the complex, dynamic, and emergent qualities that are vital for the constant reinvention of offshore spaces. This article examines the activities of Russian transnationalizing entrepreneurs of the Russian information technology (IT) offshore—a sector that is made up principally of firms based in Russia specialized in providing IT and software services for clients located in Western Europe and North America—and analyzes how their unique experiment to expand operations to Ukraine is generating a new spatial reality, one with internal hierarchies and subspaces, which I call the off-offshore.

Drawing on the narratives of engineers, managers, and directors of Russian firms who drive the creation of this new off-offshoring reality, the article focuses on the process and practices developed by transnationalizing entreprenuers. I document how these actors devised the initial attempts for expanding their operations in Ukraine, how they proceeded to implement and adapt their plans, and what language—from biological metaphors to pragmatic business terminology—they use to grasp the newness of this process. The article highlights various unexpected difficulties that the firms encountered in their expansion efforts and discusses the unique new multidimensional knowledge work spacethat becomes the reality of such firms as a result of experimental rhizomatic techniques and practices that they develop—such as management circulation, multidirectional and reversed training, and the development of online forums and in the flesh groups to encourage enthusiasts based in the new locations.

Key words:

• offshore
• off-offshore
• IT
• entrepreneurs
• Russia
• globalization
• knowledge spaces
• communities of practice
• software

Acknowledgments

The author would like to thank Dace Dzenovska and Alexei Yurchak for helpful insight on the arguments being made in the article. The author would also like to thank the Aleksanteri Institute, University of Helsinki, and the European University in St Petersburg for their invitations to present an earlier version of this article.

Notes

¹ See “Endnote” for analysis of how the present political situation between Ukraine and Russia has a minimal effect on the IT industry.

² “Tapping Ukraine’s IT outsourcing potential” beyond brics blogspot, Financial Times, August 22, 2012, http://blogs.ft.com/beyond-brics/2012/08/22/tapping-ukraines-it-outsourcing-potential (by subscription only).

³ Grey teams are small groups of independent contractors who do not have employment relations with firms. Each member has an independent contract with the firm, but the members work together as a team.