The inability of the Russian educational system to keep up with the needs of business are well known to companies operating in Russia. Thanks to new legislation, companies are now investing more in education, both state and private.
With annual growth at over seven per cent, Russia’s is one of the fastest rising economies in the world. Russia has been transformed, apparently overnight, from a “transition economy” receiving support and aid from the West to an emerging energy superpower.
The country’s business reputation, however, does not match its economic success. World Bank governance indicators place Russia near the bottom of the pile compared to countries with similar credit ratings. In a survey by the Economist Intelligence Unit, the main concerns on the part of Western executives were the lack of corporate governance, transparency and business ethics. However, there is substance behind the misgivings of Western observers.
A lack of commitment to the environmental agenda, combined with devastating demographic trends, do nothing to help minimise the perception of risk. According to the World Bank, life expectancy for Russian men is 58 years — 14 years less than American men. The population decline has been shown to make the current precipitous rates of economic growth unsustainable in the long term.
Slick advertising campaigns and glossy social reports are clearly not the solution. Companies need to demonstrate their competitiveness in the longer term by being seen to invest in their own future — not just in capital equipment, but in the health of the workforce, in internal management and controls and in the capabilities of the new generation of managers.
The inability of the Russian educational system to keep up with the needs of business are well known to companies operating in Russia. Thanks to new legislation, companies are now investing more in education, both state and private.
Russian companies could pay more attention to reducing emissions, promoting efficient use of energy resources and developing alternative forms of energy. Here Russian business could win out in the reputation stakes by consciously transforming itself into a leader in the fight against climate change.
Clearly the delicate relationship between business and government needs to be continuously refined. On one hand, business and government should be working together more closely to resolve social issues.
Finally, Russia’s overall reputation will only improve once responsible practices are perceived to be the rule rather than the exception. A clear commitment by Russian business leaders to invest in the health and well-being of their own country’s workforce, population and environment will point the way for international investors to join with their own contribution to the continuing regeneration of Russia, and will encourage them to welcome Russian business into the fold of the world’s leading economies.
(The writer is executive director of the International Business Leaders Forum in Russia)
