Since the invasion of Ukraine, it has become evident that many Russian software engineers have left the country, seeking new homes, escaping military conscription, and, in some cases, pursuing political asylum in the Caucasus. As a result, for the first time in post-Soviet history, we are witnessing a reverse flow of highly trained professionals, not least software engineers, settling primarily in Yerevan and Tbilisi.

The United States is no longer the default destination for these highly skilled Russians. Although they have left their home country, many continue to work for Russian companies. It is possible, however, that their stay in the Caucasus could become permanent.

To examine whether this "brain gain" is temporary or irreversible, we turn to Oliver Gnad, an adjunct faculty member at the Hertie School of Governance and a senior fellow at the German Marshall Fund. For nearly two decades, he worked in policy development for the German Development Aid Agency (Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ), specializing in foresight and analyzing emerging socioeconomic trends.

So, in the last two years there has been a wave of immigration to the Caucasus working in the IT sector. You have data on where they are and what they do. Where is this data coming from? 

As foresight analysts, we look for new and emerging patterns of societal development – so-called “weak signals of change” – to get ahead of developments that could really change the logic of how societies, systems, or orders work.

What do you call the weak signals of change? 

As we can see in other environments, such as the US elections, current patterns of analysis or interpretation of change are no longer sufficient, perhaps because we are using tools from the past. We are using key assumptions from the past to look into the future, and we see that those assumptions no longer work. So, we look for alternative data. This is not about looking for alternative realities. There are clusters of data that can help us interpret the world before our eyes, in real time, data in real time, signaling emerging trends. 

To answer your question, we now rely on data sharing across borders. These come from platforms used by IT developers to upload or share code. The most important of these data sharing platforms is GitHub. In the source code management market, GitHub has a market share of 85 %. That means: Almost 9 in 10 developers globally share data on GitHub. Day in, day out. So, if you look at developers communicating across borders on GitHub, you can see massive changes in patterns due to Russia's war on Ukraine. This is real-time data flow, which is probably the best way to analyze emerging patterns of change.

How is the data exchanged between developers significant?

So, the beauty of being a developer is that you can work remotely from anywhere in the world, right? Most of them do. They no longer go to the office. This is a highly decentralized industry, not just within countries and the industry, but across continents which opens up new patterns for analysis. 

And you can see where they upload? Where are they uploading code from?

Yes, because you can analyze GitHub entries and search functions which allows you to localize developers. You can see that someone is working from Georgia or Armenia or Central Asia. 

Data analysts have been looking at the patterns of data exchange since the first quarter of 2020, because these digital environments are developing rapidly, especially in Uzbekistan, which is a thriving economy. So, you saw constant but moderate growth rates up until the start of the war in Ukraine.  Then the patterns change considerably. 

Growth rates within Russia remained basically the same. Then, after the start of the war, they faltered. The same is true for Ukraine in Belarus. There's no growth in cross-border data exchange. But for the countries of the South Caucasus and Central Asia, the data tell a different story.

For example, from the last quarter of 2021 - just before the war - to the first quarter of 2023, data exchange from Georgia quadrupled and data from Armenia doubled. We all know that these are very small economies, nascent digital ecosystems. So this rise in data traffic cannot be explained by an actual economic boom. 

The data from Georgia to Russia quadrupled, and from Armenia it doubled. Is it because the starting point in Armenia was higher? Was there more exchange to begin with?

No, there are more IT developers in Georgia. Estimates indicate that approximately 100,000 Russian and Belarusian citizens have relocated to Georgia, while around 55,000 have moved to Armenia. Surveys suggest that a substantial portion of these individuals are employed in the IT sector, with 44% in Georgia and 37% in Armenia.

What eases the relocation of IT specialist to the Caucasus is that you have an established community of Russians who have lived there throughout the post-Soviet period. And you have a thriving economy in Tbilisi.

A telling example is the Russian IT company Yandex, which has relocated from Russia to Amsterdam to circumvent Western sanctions. Many of its coders now operate from the Caucasus and Central Asia.

Anyone who has been following migration studies for the past 25 years would think that "brain sharing" was a nice concept that rich countries used to describe the poaching of intellectual elites and technical experts from developing countries. The concept now seems more viable. Right? 

Absolutely, and you see it not only in the South Caucasus, but also in Serbia. If you go to Belgrade, there's a massive influx of Russians, not least because it's a Slavic language. You don't have the language barrier that you have in Georgia, even though most of the people there are Russian speakers, too.

Patterns of value creation are changing, especially in industries that are not geographically bound, like the IT service industry. As we move into the age of mass data service economies, this becomes a completely new pattern. Overall, the economy is less tied to nations. It is tied to intellectual centers and communities, yes. 

In the 1990s we had an explosion of offshore economies and tax avoidance. We seem to have the first phenomenon of offshore data economies that can connect Russia and the Western digital ecosystems, despite the current barriers. 

I think so. It's not only the kind of brain drain from Russia to the eastern neighborhood, but also to other places with good quality of life, like Thailand. Thailand has a massive increase in programmers working with Russia. It's relatively cheap to live there, cozy, warm and mostly safe.

What else drives the decentralization of the IT service industry?

People with a "God Complex", like Elon Musk, who are able to create decentralized business networks around the globe - even though geopolitics is now threatening their business model to some extent. But geopolitics is also a door opener for international private, non-territorial actors. The logic of national economies is becoming less relevant, especially in the IT services sector. The power of companies and individuals to pool their brains around a project or process is unprecedented.  I think this is the game changer.

To what extent are language and culture an obstacle to these developments?

At best, language is a cultural barrier. But it is no longer an obstacle to working from abroad. As we all know: Coding has already become a lingua franca. And with the rapid advancement of automated AI translation, language barriers are no longer an issue.

One might assume that diaspora nations are better adapted to such digital environments: Israelis in Silicon Valley in the 80s, building Silicon Valley, Indians in the 1990s and 2000s. I thought Armenians would lead the trend in the Caucasus. Do you have an opinion about it? 

Such a hypothesis needs to be tested with the underlying data. The data indicate that IT specialists are moving to Georgia in greater numbers. This brain grain may be a good way to boost the local economy. But you have to take measures to keep the human capital – incentives, linked to the quality of life in a foreign country. 

What do the current data tell us about what's next after the war in Ukraine? When we talk about the IT sector, once people take their suitcases and go, are they unlikely to return to Minsk, Kyiv or Moscow?

Here we are in the realm of educated guesses, and to make educated guesses. When you talk about Ukraine, a lot depends on what the country looks like after the conflict is over. If one thinks of a Russian puppet regime in Kyiv, a mass return is unlikely. Not to mention the shattered infrastructure. 

The question for the highly educated is: "Do I really want to return, or is the best way to help rebuild my country from abroad?" - My hunch is that the exodus of well-educated and wealthy people to richer countries may be irreversible. The longer the conflict continues, the less likely it is that well-integrated Ukrainians will return home. 

The first wave of migrants were wealthier people whose skills enabled them to be mobile. The second wave consisted of less skilled people. In a possible third wave, we would see a mass exodus of those who can make a living abroad. As a result, Ukraine is likely to experience a mass skills shortage, especially in services that can be provided remotely. People who don't have those skills won't have the opportunity to move back and forth. 

Much depends on the conditions under which Ukraine will be reconstructed. People could go back to the big cities, particularly Kyiv, Odessa and Lviv. But you won't see a massive reflux to the countryside. Most of the migration will be urban, around hotspots with safe infrastructure and better quality of life.

When it comes to Russia, a lot depends on the regime's grip on the people. Those who have left have often been the more liberal-minded and well-educated, sometimes fleeing conscription. Not everyone who escapes the draft is liberal. But those who see no place for themselves at home, politically or economically, will obviously not return. Relatively speaking, Russia is doing quite well economically, but from a democratic and social point of view, I don't see people going back unless they can make a better living working remotely and tapping into other societies.

There are a lot of nice places to live where you can make a living, stay connected to your home economy, and live better. That will probably become an economic model to attract the programmers. So, we are not likely to see a rebound effect if people are settled in thriving economies.

Interview conducted by Ilya Roubanis