The war in Ukraine and the ongoing sanctions against Russia will continue to disrupt the global tech industry for the foreseeable future, analysts warn in a new report.
Following Vladimir Putin’s invasion of Ukraine in February, the international community swiftly slammed the Russian Federation with unprecedented sanctions. The sanctions include several European nations closing their airspace for Russian flights and freezing the accounts of known oligarchs.
Research firm GlobalData forecasts that technological sanctions against Russia will continue to increase. The UK has issued a total of 1,123 new sanctions against Russia since the outbreak of the war, adding to the 215 already imposed, according to GlobalData.
“Sanctions will also force most western technology companies to reduce their presence in the Russian market,” according to a GlobalData report.
The war has also contributed to market uncertainties, with the skyrocketing interest rates seen in the US and the UK being partly attributed to the conflict, which have created a squeeze on tech funding this year and that has, in turn, caused mass-layoffs across the tech industry.
GlobalData now forecasts that the world economy will grow at just 3.1% in 2022, down sharply from the 5.9% growth in 2021. At the same time, the global inflation rate is now projected to rise to 8.4% in 2022 from 3.5% in the previous year, up from 8% in the last report.
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“The impact on software development supply chains will be felt, but its magnitude is hard to predict,” the researchers wrote.
Russia and Ukraine are home to a significant share of the global software developer workforce, which is mostly unavailable to global tech clients due to the war.
At the start of the war, Verdict reported how the global tech industry quickly snapped into action to keep their Ukraine-based workforce safe in the face of the Russian onslaught.
That being said, despite Russia and Ukraine are regionally significant technology, media and telecom markets, GlobalData predicts that technology vendors will not feel a major impact to their top line revenues.
“Demand globally is higher than supply, and shipments for Russia or Ukraine will be easily rerouted elsewhere,” the researchers wrote.
GlobalData is the parent company of Verdict and its sister publications.