Leader of Russian delegation to G20 YES discusses the young Russian entrepreneur

Modern Russia continues to follow the G20 Young Entrepreneur Alliance, of which Russia is an active part. At the G20 Young Entrepreneur Summit in Nice last November, Modern Russia interviewed several of Russia’s rising entrepreneurs. We caught up with the Russian delegation again at the most recent G20 YES, held in Mexico City in June 2012. Below, the head of Russia’s delegation, Victor Sedov , president of the Center for Entrepreneurship, shares his impressions of the summit and discusses Russia’s intention to host the G20 YES in 2013. Modern Russia will be publishing individual contributions from the delegates over the next several weeks.

What qualities do you need to be a successful entrepreneur in Russia?

An entrepreneur is someone who creates something new, finds opportunities and has the courage to take the risks that go along with them responsibly. One has to be adventurous, but reasonably adventurous. Knowledge and education are critical, but so is the ability to network with people. Russia has a lot of entrepreneurs in IT, software and “apps” development. In addition, new companies are emerging in areas like biotechnology and alternative energy. 

Are there regions within Russia that show particular potential?

Tatarstan, because it has a venture capital fund capitalized by the government. Similar developments are also emerging in Voronezh and other regions. I was amazed that this year’s G20 YES participants from Russia were not from Moscow or St. Petersburg, but from all over the country.

What is driving development in those regions?

Tatarstan’s regional government has instituted the right policies for entrepreneurial development, including promoting transparency and discipline. They pay special attention to investment and education, and therefore have the right climate. Southern Russia enjoys good availability of capital and is third after Moscow and St. Petersburg financially. Human resources are available there too, as the region is more densely populated than central Russia.
 
What do you think is the greatest challenge to aspiring entrepreneurs in Russia?

Bureaucracy and corruption make it quite difficult for entrepreneurs. Some entrepreneurs who start their businesses in Russia decide to relocate to Europe, the U.S., Canada or Israel because conditions are more favorable outside of Russia.

In your view, what have been the greatest improvements to the business environment in the last few years?

There is a significant political pressure from the top aimed at reducing the administrative barriers to starting and growing a business. The number of unplanned visits by officials has decreased significantly, giving companies more room to breathe.

Having just been at the G20 with the world’s largest economies, how would you say the participants of Russia related to those from other countries?

When I asked them what was most valuable, they said networking among themselves and with delegates of other countries. The networking even produced a special communique on tourism between Russian and American entrepreneurs that will be signed soon. The Russian group was very impressed by the organization of the event itself and the meeting with the President.

Overall, the Russians look very similar to other participants. Representatives from all 20 nations were concerned about access to capital, especially because Europe is in crisis. Attendees discussed innovative instruments for funding and growing startups. Some of the other countries represented also struggle with bureaucracy. Others felt that their countries lack an entrepreneurial culture and share Russia’s need to develop an entrepreneurial ecosystem.

How do you think hosting the G20 YES in 2013 will help Russia? What are your hopes and objectives for hosting?

The G20 summit will be in St. Petersburg in September preceded by the G20 YES several days prior. The length of the summit will most likely be a two and half days. We will have 20 delegates from 20 countries, with perhaps an additional hundred from Russia since we are hosting. I hope to work closely with the Russian government, the Ministry of the Economy, the Russian youth agency and other key players in organizing this event. Russia needs to prove to the world its commitment to improving the climate for entrepreneurial activity, so such events are crucial.

The summit produced an action plan that was presented to the Mexican President. What specific steps would you like to see taken by Russia to foster entrepreneurship there?

The five key action points from the communique – creating a continuum of funding sources, increasing access to integrated youth culture enterprise support, promoting a collaborative environment across private and public sectors, minimizing regulatory and tax barriers and fostering a stronger youth entrepreneurship culture – are quite clear in themselves. So far, in all Russian regions there are loan guarantee funds that make it easier for entrepreneurs to get loans from commercial banks. We have made progress with regard to venture capital with the creation of the Russian Angel Association.

More needs to be done in the area of entrepreneurship education. Currently, we are sending Russian professors from different universities to special trainings, such as at Harvard Business School, the IESE School in Barcelona, and this summer we are sending five to Cambridge. We also bring American professors to Russia. We have trained 250 professors already, but we need thousands with expertise in teaching entrepreneurship.

In conclusion, experience, development and capital will foster entrepreneurship and bring more foreign direct investment to our economy.