''The communist era is not completely gone, but it’s certainly going away''

Pros and cons of running business in Russia from the point of view of an American economic adviser

''The communist era is not completely gone, but it’s certainly going away'' Photo: kremlin.ru

Running business in Russia is getting easier, although some challenges, such as corruption and brain drain, are still relevant. Other aspects like efficiency and customer service have significantly improved over the last years.

Russia is not the perfect place for business, but the country presents opportunities, considers economic adviser and Forbes' contributor Bill Conerly. He visited Moscow, met with many business and academic professionals to make his own impression and made a conclusion that business leadership in Russia was transitioning from people raised in the Soviet era to people raised post-Soviet. ''The communist era is not completely gone, but it's certainly going away,'' said Conerly adding that the process had resulted in a change in attitudes that affected many facets of the country.

Currently, Russian companies are more competitive thanks to a focus on productivity and efficiency. Many of them are now using electronic document flow. Customer service has been upgraded in many ways as well. For example, 20,000 World Cup volunteers and all the concession employees at the stadiums were specially trained to be more customer-friendly. The author assumed that these employees would retain at least some of the knowledge and set higher standards for customer service.

In Russia, the share of the population with post-high school education is the world's second-largest after Canada. Photo: kremlin.ru

Overall, the Russian workforce is very well educated. According to the Organisation for Economic Co-operation and Development (OECD), the share of the population with post-high school education in Russia is the world's second-largest after Canada. However, the quality of this education may vary, as the country's second-tier universities are considered much weaker than in other countries. Thus, the most talented students from all across the country seek to go to one of the top universities in Moscow or top schools around the world.

As for the cost of labour in Russia, it is not cheap compared to many Asian countries but much cheaper than in western Europe. At the same time, the national unemployment rate keeps decreasing. Its latest level of 4,7% was a little lower than the OECD average.

Speaking about the challenges, Conerly named corruption as one of them, although he admitted that it seemed to be less common than he had expected. Another problem is a brain drain in math and computer science due to lack of start-ups at home amid plenty of opportunities abroad. According to an unnamed high-tech entrepreneur, Russian programmers hesitate to locate their ventures in the country because they believe that intellectual property can easily be seized by politically connected competitors. The author also warned that foreign companies considering business in Russia should track the sanctions issue carefully, as changes were coming quickly.

By Anna Litvina