Chris Osborne of the Trioka Dialog USA began the session by asking how many audience members had been to Russia in the last two years. Surprised by the show of hands, he began discussing the rapid growth of Russia's GDP, its rising middle class and the recent flood of foreign direct investment. However, Osborne noted that most observers are aware that investing in oil and natural gas is not sustainable. He added that the incoming Russian president Dmitri Medvedev has stated his priorities for investment in the three I's: infrastructure, innovation and institutions.
Most of the panelists agreed that now is a good time to invest in Russia. Asadov emphasized opportunities outside the oil and gas sector, noting that other industries are ripe for innovation and have little competition.
Gregory Karpovsky of Eurokommerz, the largest factoring company in Russia, used his own story to illustrate the degree of opportunity that is available. A young, self-made entrepreneur in an industry outside of the oil and gas sector, he started a company at age 22 and is now a CEO at 28.
Dmitry Mosin of Sochi 2014 described the upcoming Winter Olympics and Paralympics as an opportunity to showcase a new country to the world, attracting investment and commerce. Mosin cited the Olympic Games as a priority for the prime minister; as a result, all investments will be guaranteed by the government. Private funding will drive construction of the needed infrastructure and hotels.
Vadim Asadov described his experience in Russia's technology sector. A physicist turned investment banker, he established NeurOK in 1998 as an angel incubator for technology financing and commercialization. To nurture the human capital necessary for innovation, he has also founded advanced institutes for physics and mathematics.
Evgeny Zaytsev of Asset Management Company affirmed that there is a great deal of potential in Russia's life sciences sector. Consumer demand is rising, especially in health care. The problem, he says, is the shortage of managers in Russia.
That issue is being addressed by Wilfried Vanhonacker, Dean of the Moscow School of Management. The Russian government has made it a priority to stimulate entrepreneurial talent and leaders who can manage a fast-moving economy. Although Russia's president-elect, Dmitry Medvedev, is chairman of the school's advisory board, the school is entirely privately financed.
When asked about Russia′s negative image abroad, Asadov said that he is surprised at how inaccurately the Western media portrays Russia. "This contradiction of reality is bad for Russia but even worse for America," he said, noting that it leads U.S. investors to shy away from investment opportunities. "Russia is a best-kept secret."
"Russia has been doing a pretty poor job of managing its PR as a country," said Zaytzev. He discussed the lack of awareness by Westerners of all the positive developments in business, education and the arts.
Vanhonacker noted that the problem of Russia's image has some cultural origins, observing that Russians are very direct and don't always consider the audience they are speaking to. He has found this issue a challenge in building the business school. "I have no problem selling the projects to get faculty. The problem is selling Russia."
"Communication is everything. It's all about how you are going to communicate your country," said Moisin. He cited his experience with winning the Olympic bid for Sochi, calling it in effect a global election. "Intense, targeted, and motivational communication is key is in how you want to present your story. It can be done."
Despite the challenges, Vanhonacker reaffirmed that Russia is where the opportunities lie. "Russians are proud and highly educated, with a maturity and understanding of what goes on the world." The country only lacks soft skills such as management. "But these are the challenges that come when faced with high growth and different talents," he said.
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
