Press about RVC

Technological Entrepreneurs Fear for Staff

30.03.2020
Source: Kommersant

Photo: Anatoly Zhdanov / Kommersant

Introducing tight proliferation restrictions to combat coronavirus will complicate the preservation of jobs for technology companies. Against the backdrop of a weakening rouble, the risk of employees switching to remote work on foreign projects will also increase, as follows from a survey conducted by Russian Venture Company (RVC). The business is also concerned about the lack of liquidity for paying taxes, repaying loans and rent, and is experiencing difficulties with external logistics.

In total, about 100 representatives of small and medium-sized companies among the participants of the TechUspekh rating, portfolio companies and recipients of support participated in the RVC survey. The study was conducted from March 25 to March 30, 2020.

The most urgent interviewed entrepreneurs considered the problem of maintaining team and jobs — 56% of respondents indicated it. Entrepreneurs are worried about the issue of salary preservation during a period of indefinitely extended business downtime and a decrease or absence of cash receipts. Several respondents indicated the need to increase employee salaries in connection with the growth of the dollar, to avoid the transition of developers and engineers to remote work to foreign employers.

Problems associated with a lack of liquidity, including for taxes (53%), insurance payments (38%), bank loans (29%), rent, and other obligatory payments (38%), come second. According to entrepreneurs, the deferral of fees is not a solution, as it does not eliminate the need for subsequent payments over a long period. Also, without a liquid collateral base, technology companies are having difficulty obtaining borrowed funds for development.

The third risk zone for the technology business is the difficulty of marketing products (47%), difficulties interacting with international partners (32%), and problems with the procurement of components and materials (30%).

The change in the rouble exchange rate leads to an exchange rate difference for the concluded agreements. The import of components requires payment of VAT upon importation, which creates cash gaps, respondents indicated.

With foreign partners, difficulties arise due to the cancellation of flights and logistics problems, which leads to the failure of export contracts. Besides, entrepreneurs pointed to challenges encountered in working with government customers due to the cancellation of projects and reduced costs for innovation.

About a third of respondents noted the availability of growth opportunities, including export, provided that external investments were attracted to scale the business.

The Head of RVC, Alexander Povalko, said that the development institute is preparing a “bunch of proposals on priority measures to support the technology sector”. According to him, it will be sent to the government in the coming days.

By: Tatyana Edovina.



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