It’s no longer a question of what we do; it’s a question of how we do that

I sat down with my managing editor the other day for a quick roundup of developments that had shaped things here at Marchmont over the past 12 months; and as we went on, him asking questions and me answering, broader matters of Russia’s advance down its long and winding path to innovation were discussed. It has been a tough year, but not without headway...

Another year of tumultuous progression to an innovation economy is drawing to a close. What have you observed that might be considered a distinctive feature? Are there any new elements in Russia’s regional innovation infrastructure?

I’d say that the chief accomplishment of the outgoing year were some real results from Russian Venture Company, Rusnano, Skolkovo and other state-run initiatives that are ready to support this innovation economy.

For example: it was just some months ago that Skolkovo announced that “already one hundred companies were accepted for residency in the hub.” And if I’m not mistaken this number jumped recently to about 250. Just a year ago they had only a few top employees at Skolkovo, and today there’s a whole team in place. 

There are five cluster funds and agreements to establish the Skolkovo Institute of Science and Technology together with MIT; and there are people working on those.

At Rusnano, hundreds of millions of dollars of revenue are being generated from projects that the firm has invested into in the nanotechnology sphere to create advanced manufacturing facilities working on nanocoatings, nanocosmetics and other things.

A year ago it was decided that Russian Venture Company had to start its Seed and Infrastructure Funds. Today, these Funds are operational. There are already three investments approved by RVC’s InfraFund and more by the Seed Fund—whereas five years ago the concept of RVC investing in such early-stage projects was far from any reality. RVC’s Seed Fund is also looking into pre-seed projects, and we at Marchmont are extremely interested in that area as that’s our focus.   

Which regions are in front in the advancement and which are trailing?

Tomsk is surely one of the leaders in Russia; Novosibirsk’s Akademgorogok is just fabulous. I think Nizhny Novgorod also has a good chance to be a leader with support from the administration and the Sistema Sarov techno-park and the creation of a pre-seed support and packaging center here in Nizhny Novgorod. If this comes to fruition, this will be a fantastic push for the Nizhny region. Other regions that have made huge strides include Kazan and Obninsk; of course, Moscow and St. Petersburg are taking leading roles.

Areas where I think there has been less progress but there’s huge potential would be Chelyabinsk, Astrakhan, Yekaterinburg and Tyumen.

The most important thing that we can see from our dialog across Russia is that the focus of the dialog has changed. It’s no longer a question of “what do we do?”; it’s a question of how we implement these things, how we can develop more business angel clubs, how we can channel private sector money into the development of innovation and support the infrastructure needed for that. And I think Marchmont has played an important role in helping shape this new dialog. Not the idea of “let’s build an innovation economy,” but “let’s think about what real impediments to that innovation economy are and how we overcome them.”

Is the state still the main player in the market, or are businesses and/or universities taking over?

The state is still the main player. The role of the government in this country is fundamentally critical to laying the right foundation for private investors to invest in innovation.

Universities are beginning to understand how to utilize the new laws such as Law 217, and there’s a growing body of evidence and case studies of success stories (and failures) allowing the authorities in Moscow to begin to amend laws to improve their efficiency.

The most important thing is that the private sector and the government sector in Russia need to understand how to work together to achieve common goals. Maybe in the old commodity economy the role of the government sat in the position to lead all efforts. In a modernized innovation-driven economy the role of the government is simply to properly motivate business owners to invest in modernization by establishing the rules of the game.

Are there any legislative moves that in your opinion could better bridge the current gaps between the state, science and business?

Absolutely! Tax policies, currency control laws and Central Bank laws are critical to be adjusted for the 21st century, revolving around electronic contracts without stamps, for example.

Young innovators need currency accounts to deal with global licensing companies. There must be ways for those young innovators not to resort to illicit activities but rather be comfortable in their home provincial towns working with local banks to be able to sell products and IP to global social networks and markets. The laws in Russia need to be fundamentally altered to lower the risk levels for individual entrepreneurs to jump into the game of business inside Russia, not outside.

I believe top-level authorities in Moscow deeply understand these problems. Unless there’s a new business-friendly set of laws in place in Russia within the next two or three years, the entire generation of entrepreneurial start-uppers may be pushed to leave this country, which would be a catastrophe to Russia.

The RF seems to be pushing innovative SMEs to look for export markets rather than domestic applications. Is this the right way to stimulate growth in the hi-tech sector?

Absolutely not! Pushing young innovative companies to sell abroad means pushing them to leave this country. The most important thing to do is to stimulate domestic demand and legislatively lower the cost of investing in modernization for business owners.

There should be a substantial revision of anti-monopoly laws to encourage the creation of a competitive market economy, not the economy filled with individual monopolists surviving without any competition in their niche markets. This system has no future. Only a competitive system, both domestically and internationally, will push the owners of corporations to invest in the improvement of their own competitive advantages.

As Russia enters the WTO and becomes more and more integrated into the global economy, the pressure of competition will only increase.

If you look at any historical example of an innovation economy in the U.S., Israel or Singapore, any such economy first and foremost established its own domestic industrial bias, and only after a strong market was firmly in place within the home country did companies use the strengths and profits from this market to then begin to export.

Regrettably, most industry doesn’t buy Russian technology for modernization. How do Russian companies get their innovation sometimes? Western companies come to their boards and persuade them to buy some fabulous new technology to improve performance. The problem is that technology from Western Europe might have been originally developed in Russia, then packaged beautifully in Germany, and resold to a Russian corporation at ten times the price.

What the RF government could do to address the problem is to encourage the development of domestic packaging centers—pre-seed level funding and support structures that help innovators from the academic world to package their technologies to be custom-made for Russian industry.

A US company is commercializing in the States a cutting-edge nanostructured titanium technology once developed by Bashkortostan scientists but never supported or used by Russian innovation market players. A Japanese company is commercializing in Japan a revolutionary plasma-based technology to harden and sharpen razor blades developed by Tomsk researchers but finding no market domestically. There are other examples of this kind. What do you think this is: sabotage? lack of understanding of how to apply domestically? backhandedness of modernization rhetoric?

The immediate problem is the lack of successful commercialization strategies by innovators. But the root cause is not enough business angel investors which play a critical role in developing such strategies.

There’s major disconnect between academia and business in this country. Western companies want Russian technology—one of the best in the world—and there’s the lack of domestic investors that test the technology first in the Russian market.

What happens often is that a scientist trying to sell his products domestically can’t find buyers, and then a large global corporation offers him a highly paid job overseas. This is a very attractive option because thus scientists can turn their dreams into products.

This is not sabotage—this just indicates that Russia has not prepared itself yet for this global economy. The top owners of corporations here in Russia don’t seem to be fully aware of what their assets need to improve themselves and don’t have internal mechanisms to receive bottom-up signals that would make them aware. Mid-level people simply wait for top-down instructions. They do not have the mentality to kick some ideas up from the bottom.

This is perhaps a legacy of the old times when Gosplan (the USSR’s government economic planning behemoth) alone decided what was to be done to improve an industry and how academia could participate in that.

In the same manner, Russian universities do not study markets—unlike US universities where researchers always think how to make a product that would improve, say, General Electric or Ford. These ideas come out from the bottom of American universities and are delivered by business angels to the board levels of large corporations. And in the symbiosis effect, large companies place orders directly with universities. In Russia, such connections don’t exist.

‘Innovation specialties’ in the Russian regions. Does this innovation cluster talk resonate with you?

Sure! Russia has the tremendous potential to develop a pharmaceutical cluster in Obninsk, an IT cluster here in Nizhny Novgorod, a nuclear medicine cluster in Chelyabinsk; of course, Novosibirsk and Tomsk have huge potential in many areas.

I believe that over the next ten years there’ll be more and more connectivity between different clusters as key fundamental scientific disciplines require cross-fertilization in order to produce specific solutions to problems. 

So, the nanotech specialist in Yekaterinburg will need to hook up with the biomed expert in Obninsk to create a new medicine which works at a certain molecular level to affect brain diseases, for example.

I believe Russia will develop what I would call system integrators across the country that would analyze various fundamental scientific trends and then piece them together into products for Russian industry first and foremost. Once the products are proved to be extremely efficient for Russian industry, their makers will then be able to go international. This is how it should develop within the next 15-to-20 years.

Your outlook for the 2012 innovation market in Russia?

In my opinion, 2012 will mark a milestone in the acceleration of Russia’s advancement to a diversified innovation-driven economy. There’s going to be more progress, I’m sure, and Russian Venture Company, Skolkovo and Rusnano will gather steam building the correct foundations.

I think the modernization drive will continue in Russia, and the recent political commotion will speed it up because young people who are actively interested in Russia’s development are making their feelings known—not in the aggressive way but simply showing that they want to participate in overall social life in Russia.

Please also take a look at my most recent interview on these and other issues with VentureVolga.com. Would love to have your comments.

Gregg Robins’ ‘Heroes’

In Support of America's 'Heroes', Singer-Songwriter Gregg Robins Joins With HonorVet to Raise Funds For U.S. Military Returning Home

"Helping our Heroes at Home" Initiative Will Donate All Proceeds From Robins' Song 'Heroes' to HonorVet

Robins' Plain-Spoken, Emotive Rock, with Unexpected Instrumentation, is Highlighted on Debut CD, Out October 25th; Early Raves Compare Robins to Cat Stevens, Praise the Music as Having "A Particular Resonance"

Singer-songwriter Gregg Robins will use the song 'Heroes' from his 10/25 debut CD 'Everything That Matters' to raise funds for American military returning home from the battlefield. Robins has partnered with HonorVet for his "Helping our Heroes at Home" initiative, in which 100% of the proceeds from sales/downloads of the song 'Heroes' will be donated to HonorVet. Robins comments: "Building community and empowering our veterans by giving them the tools they need to re­integrate back home - this is what's special for me about the HonorVet approach. We honor ourselves by honoring those who have so bravely served our country as we help them to feel at home once again."

The 'Heroes' song is available for purchase here: http://greggrobins.com/heroes/. There is a $2 minimum per download, but the hope is that supporters will be inclined to donate more than the minimum purchase price. All proceeds will be donated to HonorVet, a non-profit, non-partisan organization. Members of the HonorVet community will be able to download the song at no charge.

Jesse Canella, C.E.O. of HonorVet, commented: 

"It has been such a pleasure to get to know Gregg. He truly is passionate about giving back and supporting the military community and his song 'Heroes' makes that very clear. We are grateful for his support not only to our organization but also to the entire community of those who have and continue to serve our great nation."

Early reviews have praised Robins' CD as evoking the music of Cat Stevens, and of having "a particular resonance." The Record-Journal commented, "Robins' song "Heroes" tells the story of soldiers returning home. He does it masterfully and with such heart and passion, which is hard to capture in song."

The song was written on the eve of Robins' visit to the Landstuhl Medical facility in Germany. He recently discussed the track in an expansive podcast interview, and a transcript of the discussion re 'Heroes' follows:  "Heroes is written for our soldiers in Iraq and Afghanistan. The intention with this track is to raise funds specifically for them. In 2009, I was about to go to a place called Landstuhl, a medical facility in Germany where injured soldiers on their way back to America from Iraq and Afghanistan stop for medical treatment. Some of them are very, very sick. Some of them have lost limbs. I thought that maybe the soldiers there would appreciate some music, so I offered to bring a guitar and an amp and play for them. And the response back was that they would love that. So, I decided I should write something specifically for them, but that was very difficult, because I didn't know how exactly to relate. I've never served in the military, though I do have many friends who have served. I asked myself, what could I say, not coming from the perspective of having understood or understanding what they do? What essentially came to me was that they should be honored because whether we think the wars are just, right, unjust -whatever we think about the wars, certainly we should honor the soldiers who go there, who were sent there, and who try to defend our freedoms."

SOMETHING ELSE REVIEWS

SOMETHING ELSE!

Gregg Robins' debut album, and this is quite a feat, speaks to the idea of loss — loss of family, loss of country — without ever descending into a shivery gloaming. A Bronx transplant living in Russia, he was separated not just from his home but also from his children after suffering through a broken marriage, and that space between Robins and everything he so desperately loves couldn't, at times, be any wider on the appropriately titled Everything That Matters.

Yet, the album's intriguing instrumentation, and Robins' dogged determination to find purchase in this new and uncertain world, keeps the project aloft. For all that he seems to have lost at first, there is something gained for Robins through the telling — and, through sheer force of will, it seems, things begin to turn for him.

Like most singer-songwriter projects, this is, on its face, an autobiographical, deeply personal journey. But, along the way, Everything That Matters transforms into something more universal, beginning with the way Robins transforms the album's base of stark acoustic instrumentation — so reflective of the hard truths associated with divorce — with these richly expressive local textures. At times, you hear something in his soloing approaching klezmer; at others, there's an angular Eastern European feel to the strings, as well. By the time this trip is concluded, Robins has done much to reconcile things. There is a touching, ex-pat sentiment to tracks like "Morning In America" and "Heroes," but at the same time Robins slips into a unmannered, folksy Russian dialect for the tune "Pages of My Life." He moves from a desolate loneliness in his family life ("Sounds of the Day," "So Many Ways" and, in particular, the shattering "Memories & Yesterdays") toward the hill-topping vistas of "Just What I Needed" and the title track — songs that provide a detailed roadmap as Robins rediscovers love and ultimately reconnects with his long-lost daughters. There arrives this particular resonance. For all of its specificity, Everything That Matters ends up dealing with some very universal things, delving into meaningful thoughts on loss and on what's important. Just as particularly, Robins has crafted an album with a musical underpinning that keeps providing these small bursts of sunlight and surprise. Taken together, they make this one of the most uncommon of delights — an exploration amongst very familiar landmarks that somehow feels brand new.

Everything That Matters, a crisp, spacious sounding set scheduled to be issued Oct. 25, was mixed by Yvan Bing, who has worked with Phil Collins. The record was mastered by Greg Calbi, who did similar work for Bruce Springsteen's Born to Run and Paul Simon's Graceland. David Hadzis was producer, along with Robins.

THE RECORD-JOURNAL
By Jim Pasmski, 1 0/20/11

http://jpsmusicblog.blogspot.com/2011 /1 0/c

d-review-gregg-robins-gives-us.html

CD Review: Gregg Robins Gives Us "Everything That  Matters"

Classical trained musician, Gregg Robins is releasing his debut album "Everything That Matters" on October 25. Robins started out as a classical clarinetist, he then moved on to alto saxophone. His passion now lies in American folk music, which is showcased on his new album as he tells of his journey of human emotions and experiences.

The gentleness of his sound is noticed right from the beginning with the opening song "Sounds Of The Day." His song-writing style draws similarities to Cat Stevens, where each artist would only use the minimal instrumentation to convey the song's meaning. Robins' song "Heroes" tells the story of soldiers returning home. 

He does it masterfully and with such heart and passion, which is hard to capture in song. Robins' songwriting rarely strays from the mellow acoustic background that only enhances his vocals on the songs "Pages Of My Life" and "If I Could Be There." Robins' does plug-in for a couple songs, the up-tempo rocker "Walk Away" and the patriotic "Morning In America." But, his strength lies in his folk-style storytelling as in "Just What I Needed" and "Angel."

More about HonorVet.org:
HonorVet.org is a non-partisan, registered 501(c)(3) not-for-profit organization devoted to giving back to the men and women who have dedicated their lives to serving our country. HonorVet.org provides transitional, psychological, spiritual, educational, and career support using an interactive-community to serve veterans, service members and their families in a safe and trusted environment. Learn more about HonorVet, the 'next generation community for veterans,' here: http://honorvet.org/.

More about Gregg Robins and his upcoming debut CD:

With plain-spoken, emotive lyrics and unexpected instrumentation, singer-songwriter Gregg Robins crafts a heartfelt debut CD dedicated to his three daughters. Robins, a Bronx transplant living in Russia, builds engaging songs that are direct and conversational in tone, many driven by the pain of a broken marriage, the estrangement from and ultimate reconciliation with his daughters, and the hope of finding new love. On the October 25th release 'Everything That Matters', Robins' understated delivery is often juxtaposed by lush instrumentation, ranging from strings to klezmer-infused solos to songs that suggest a Native American rhythmic undertone, and more. Visit www.greggrobins.com for audio samples and additional information. Listen to Robins discussing the evolution of the CD, via this expansive podcast: http://www.youtube.com/watch?v=ZDgWTc58Rjc.

There's an emotional integrity to the music that is reflective of the subject matter, as Robins suggests in his song notes, below. Highlights include the rich and winning track 'If I Could Be There,' the ironically titled 'Angel', and a Russian-language version of the song 'Pages of My

Life'. There is also a pair of tracks, 'Morning in America' and 'Heroes', which convey Robins' patriotism from abroad. 'Morning in America' focuses on the 2008 presidential election, and 'Heroes' shines a light on our men and women in the military.

The Production Team for the album includes:
David Hadzis of Arthanor is the Producer, with Gregg Robins as co-Producer. Since the mid-80's, Hadzis has been involved in the production of over one hundred record releases in Europe, the U.S., Canada and Australia. Yvan Bing of Kitchen Studio is the Mixing Engineer. He studied audio engineering at Berklee Music College in New York and was the main engineer at Dinemec Studios in Geneva. He has worked with Phil Collins, including on his last album. Greg Calbi of Sterling Sound is the Mastering Engineer. He has mastered at the highest level for decades, including Bruce Springsteen's "Born to Run" and Paul Simon's "Graceland."

For more information about Gregg Robins, to set an interview, or for a review copy of his debut CD, contact sethcohenpr@earthlink.net

“Everything that Matters”

Gregg Robins is not only a long-standing member of Marchmont’s Advisory Board; he’s also an interesting musician playing plain-spoken, emotive rock. He’s releasing his debut album titled “Everything that Matters”, to be available in stores from October 25, 2011 and is promoting a special website, http://greggrobins.com/ whose goal is simple: to connect with fans that are moved or touched in some way by the music. Here’s Gregg:

“Everything that Matters” began being recorded in 2009, spanning four countries and many studios, and involving many talented musicians, from guitarists to drummers, backing vocals and strings, and with tracks in English and Russian.  It is a debut album that represents the realization of a dream.

“Everything that Matters” is a journey for me across the spectrum of human emotion and experience: from heartbreak to love, separation to reuniting, to the euphoria of an historic election and the spirit and saga of our soldiers far away.

I’m encouraging you to sign up on the website as fans, see press news, hear a blog, and hear some songs—including one in Russian!

The value of history

South Korea has been awarded their Winter Olympics—after a third try. I read about it and my memories of that country came to mind. Perseverance in achieving goals is not the only characteristic its extraordinary people have.
 

In addition to heading a rating agency, OmniGrade, I also work as a board member of an international factoring association, IFG, and am responsible for Asian factoring operations. I have been to many Asian countries as an IFG representative, meeting managers of local financial institutions. It’s so easy to arrange such meetings; you simply write a letter or email with an introduction and a topic you’d like to discuss and soon receive a reply confirming an appointment or courteously denying it for a reason.
 

With South Koreans, however, it was different; to every letter of mine I received similar answers: “to decide whether to meet you Mr. X is kindly requesting your bio.”
 

My first reaction was astonishment: why on earth do they need to know my bio if they are aware of my current position? But such requests would come over and over and over again; and I then realized that asking me for this did make certain sense. It is the history of an individual with its past experience and reputation that is the best criterion for the Koreans to see if interacting with that individual is worthwhile.
 

The same is valid for companies. It’s by no accident that many European firms still apply considerable efforts and spend a lot of money to whitewash themselves from the ‘legacy’ of their predecessors who, for instance, collaborated with the Nazis in Germany.
 

Keeping corporate history open has positive effects. A company has survived several crises—that means its viability is high and it is capable of honoring its contractual obligations in tough times. A company has repeatedly introduced new products and services to the market—that means it is genetically prone to innovation.
 

Remembering and analyzing a firm’s past can turn problems into achievements when managers can rightly say: yes, we lost something at a certain point in history but we have gained invaluable experience that is ours for good. The reverse may also be true, though; disregard for a company’s history wipes out prior achievements, and the past stops being a helper when it sinks into oblivion.

Greek lessons

Greece is a poor wretch economically these days. Capital flight; workers going on strike across the country; its banking system losing liquidity; credit ratings going down—no luck.

I think, if we analyze the reasons why this traditionally affluent country has found itself in a predicament like this, we will learn some valuable lessons, both macro- and microeconomic.

Lesson #1: as the saying goes, if you hang a rifle on a wall, be prepared for an eventual shot. If an economy bears a burdening ‘rifle’ of systemic problems, including lack of diversification and multibillion dollar image projects like the Athens Olympics a country can’t capitalize on as there’s no sane strategy, etc., the problems will erupt one day.

Lesson #2: spending cuts (government spending cuts in the Greek case) are hardly a focus of counter-crisis policy. This is relevant for companies as well as countries.

Lesson #3: be honest. The Greeks once chose to falsify its stats to qualify for the longed-for Euro zone; now they have to pay the price as national currency devaluation—an effective tool to combat debt crisis—is beyond their reach.

Last but not the least: something has to be implemented to keep in check rating agencies that exacerbate the calamity. For example, S&P has recently degraded Greece’s sovereign rating further—a fourth straight such move in just one year, this time by two grades. This is a potential threat to not only countries but companies as well. People pay for a service that undermines their future—isn’t it strange?

I myself run a small rating agency, and we keep emphasizing that no matter what a rating level, the very fact of a company’s willingness to be scrutinized by external experts adds to more credibility—in contrast to companies that opt not to do so. And this works; in a contemporary business, whichever it is, upholding the interests of your clients is key.

A bit more on honesty and confidence. In my perception, when Greece was faking its data its creditworthiness was much lower than it is today. No wonder to me: the Latin word “credit” means “trust.”

With Jackson-Vanik in place, ‘Commercial Reset’ is a target

As talks over Russia’s accession to the WTO are apparently drawing to a successful close and the ‘Commercial Reset’ of the U.S.-Russia relations is seemingly right around the corner, the U.S. House of Representatives predicts an uphill battle the White House will have to face in persuading Congress to approve permanent normal trade relations (PNTR) with Russia “due to concerns over Russia’s trade practices and human rights record.”

I think it’s clear that the House Republicans are playing a high-stakes game with Barack Obama this year. They don’t want the American president to have so many successes, such as the most recent nuclear treaty with Russia. The G.O.P. representatives are nervous that by continuing a string of successes Obama will cement his leadership position to win the next presidential election.

There’s a lot of infighting for who are going to be the ‘serious’ candidates for the American presidency and who are absolutely non-starters. Look at Donald Trump, a Republican Party candidate for the 2012 campaign! A master at PR and promotion, he’s hardly a serious candidate to run the national economy, I’m sure; it’s no fun job.

The reality is that there aren’t enough high-powered candidates that are stepping up to the plate who can really win. So the leadership of the Republican Party is quite scared. To immediately agree, “yes, this is a high priority, we have to get Russia into the WTO and rescind the Jackson-Vanik amendment” would simply play into the hands of President Obama.

A large majority of sizable US businesses that have experience in Russia are quite interested to expand their business relationships. For example, the US-Russia Business Council in Washington recently made a strong appeal to the business community to look at the situation rationally and very carefully.

When Russia is accepted to the WTO (probably before the end of this year), if the U.S. has not rescinded the Jackson-Vanik amendment, it will put all American companies doing business in Russia in jeopardy, as the amendment is not consistent with the WTO membership. The situation will give huge advantage to French, German and other international companies.

There are three other countries that are applying for a special trade status in relations with the U.S. I think in this situation the Republicans are trying to gather some arguments that they can use to make some win over the Obama administration. By threatening to block the repeal of the Jackson-Vanik amendment they are trying to get some concessions from Obama.

Everybody knows Jackson-Vanik has to be rescinded; it is outdated, and Russia no longer restricts people of Jewish heritage to emigrate. But the Republicans want to get something first from Obama.

I don’t know who made this comment, but it seems rather logical: if the administration simply lets Russia join the WTO without Congress repealing the amendment, who’s then going to look stupid are the Republicans. I think the Obama administration is trying to be smart now that the G.O.P. is playing games, saying, “if you refuse to do this, then you’ll be to blame for the entire business community losing out on opportunities for Russia.”

Is Russia a normalized market economy? No, not yet. Is it on the road to becoming a normalized market economy? Yes. Will membership in the WTO encourage the development of Russia as a normal market economy? Absolutely. It’s in everyone’s interest.

There’re some vested interests in Russia that don’t want the country to become a member because they make a lot of money as long as Russia stays out. But the vast majority of companies will gain from the membership.

In my opinion, the Republicans’ “maybe we won’t allow the amendment to be rescinded” makes them look rather childish, and it’s a game they are not going to win because if they fail to extract concessions, the business community will speak up loudly, and every member of the House and the Senate will be receiving letters from American businessmen who are going to lose out by the U.S. kind of ‘withdrawing’ from this trade program with Russia.

On biathlon woes and business competition

The Russian national biathlon squad has failed at all key events of the outgoing season. I couldn’t care less for this in an economic context, I admit, unless we had as the head of Russia’s Biathlon Union one of this country’s most high-profile entrepreneurs, Mikhail Prokhorov—a billionaire who owns Onexim Group and a US basketball team, New Jersey Nets, and is the chairman of Russia’s largest gold producer, Polyus Gold . He is Russia’s second richest man and the 39th ultra high net-worth individual in the world according to the 2010 Forbes list with an estimated fortune of $13.4bn.

I have read perplexed comments from dismayed advocates of a market economy and winter sports: hey, where is the efficient management that we all know should be part of any private endeavor?

I think it is one of the most widespread illusions cherished by Russian society in transition. In fact, managers employed by private businesses are hardly any more efficient than those working for contemporary government corporations or even socialist enterprises in the Soviet times. In fact, it’s not ‘effective managers’ that are an advantage of a modern market economy; it’s competition helping people with good managerial skills surface and prove themselves that is. Outside competition any management system, be it a privately owned business or a government-run project, is doomed to degradation.

We still have hopes that it’s competition with the Norwegian, German, Swedish and other leading biathlon federations that can eventually improve the quality of management at Russia’s Biathlon Union, thus contributing to more medals.

I would recommend another ‘therapy,’ too, which may look a bit eccentric, though. The sport once brought Mr. Prokhorov into it, among other things, for the businessman to pony up funds to develop biathlon. So, why not attempt the reverse: rearrange the system so that the patron could stop spending but rather start gaining from the Union’s proceeds?

Maybe, the situation will be faster improved if the stakeholders start regarding the sport as a business project capable of generating money.

In any actual business, overinvesting may do harm unless applied to a healthy competitive and creative environment.

All that said, we can however be sincerely enthusiastic about the way Mr. Prokhorov’s ‘Yo-mobile’ hybrid car project is progressing. Odd on the face of it, the Yo project is undoubtedly business-oriented and able to ‘gnaw out’ its share of the automotive market.

Sexy sloganeering, forgetful sloganeers

Mikhail Gorbachev had his 80th birthday celebration just last week. The entire planet remembers Gorby as the one who put an end to the Cold War; when his fellow countrymen talk about him, it’s the word “perestroika” that usually comes to mind.

Few remember, however, that even before perestroika (standing in English for “reconstruction” or “upgrading”) Gorbachev had another slogan: “the speed-up of the USSR’s socio-economic development” or just “acceleration.” A pretty good slogan from the mid-1980s that correlates perfectly with today’s “modernization” buzzword. Nevertheless, the “speed-up” was strikingly short-lived; the watchword fizzled out within a year of its birth.

Too bad; slogans are important as they outline for political elites a vector of where to move to redesign society. What you put into a slogan can hardly be made part of a program—the latter will wolf it down and none will get the sense of it.

Alas, this seems to be the doom for most national mottos in Russia; they die away fast. Do you recall another one that was born at the turn of the century—about “the doubling of the GDP”? Great slogan for a country that at that time didn’t expect any population growth; the guideline meant the doubling of the per capita GDP. To put it in simpler terms, the goal was set to make an average Russian twice as moneyed as he was then.

The slogan ebbed almost as fast as its ‘predecessors.’ Prior to that, there was a lot of speculation and derision about it being unrealistic. It would have been much more useful, I think, to stop booing its impracticality AT THAT TIME and think of what could be changed in laws, law enforcement, etc. to make it realistic. That would have probably made a huge difference for all of us.

The tendency persists in many Russian companies as well. Managers wake up with a strategic vision and bustle about framing it in a sexy slogan—only to forget about it next day. Isn’t it the reason why really great companies are so few in Russia?..

Why does every Russian also need better Internet than Barack Obama’s?

Few countries speak so much of modernization and innovation as Russia does now. However, what we can see is kind of different from the stated objectives. There’s still a gap between the promise and the delivery. While Microsoft alone put up last year 3,000 new patents, Russia’s 22 largest government corporations combined only generated 1,000. I can’t help thinking if modernization is going to be anything more in Russia than a political mantra that the president and the prime minister keep repeating.

I was reading an interesting article the other day; it was about South Korea.

Well, all the different countries in the world choose different strategies; it’s all about what strategy you pick. South Korea picks to be a leader in innovation and technology, and they gave a young guy in a teacher’s jacket a budget of $25bn to raise the speed of Internet access for every domestic household to 1GByte/sec. When US President Barack Obama learned about this strategy he confessed that in that scenario, every single household in South Korea would have faster Internet access than the White House. That must be pretty fast, I guess, and in doing some Twitter and Facebook blogging any South Korean will get his or her downloads in one-tenth of a millisecond, while President Obama will only get his in a millisecond.

This is great competition, and domestic demand for improving efficiency is what drives countries’ development. Russia has picked up this mantra, and it’s good it has because this country has no choice but to get on this bandwagon.

Now it must show real results because young people will not stand for years and years of stagnation like the Brezhnev era. We live in an open world today; Russia is no longer a closed submarine under the Arctic ice. It is open for business with the world, and young people in this country know that.

Sure, there are lots of forces here that are against WTO, proper IP protection, modernization, etc. because they stand to lose a lot of money if the country modernizes. People make money in good or bad times, in modernization or stagnation; some people will always make money. The question is who and how much, and what generation.

It seems to me that the top leadership in this country is pushing the young people to drive Russia forward to modernization. Overtime they’ll have to be consistent on this message and deliver actionable results.

Margaret Thatcher also had an uphill battle back in the 1970s. Gee, her whole country was against her plans! The labor unions, the Academy of Sciences, the political elite, the educational elite—people across social strata were totally and completely against what Margaret Thatcher wanted to do to modernize the economy. Yet she continued to tell her message day after day, night after night on TV to every audience that would ever listen to her, and enough people began to believe her, and they began to implement her plan. She got laws passed, and she changed culture and set up the framework to create new society.

So the question is: does the political elite in Russia have a long-term vision to stick with this? It’s ok to start, but if they change in two or three years to a new mantra, or some new idea, it will just be hopeless. If they stick with this and fix the laws, and use law to motivate private innovators and investors to invest in the modernization of the economy, and if they use tax law and policy to push owners of companies to invest in themselves, creating a domestic market for innovation, then there’s a real, honest chance to develop this country as an innovation leader. Creativity here is clear; innovation is possible. Yes, the barriers are high, including cultural ones, but Russia has all the potential.

So, does South Korea need a 1Gbyte/sec. Internet access for every household? Absolutely. And so do the United States and Russia. And how does that compare to Cuba, North Korea or other countries that are closed? Those simply fall further and further behind.

Those that are advancing will advance faster; those that are falling behind will continue falling. Russia has no choice but to join the leaders. And that means investing not only in workable roads that are smooth enough for trucks and people to move around the country but in whole infrastructure: the energy grid, the electronic grid, the Internet grid, etc. Infrastructure for a 21st century economy implies liquidity and flow of people and information.

If Russia backs up its commitment—call it a mantra or rather a stated strategy—to go forward with real money, real infrastructure and real laws to encourage private investment, then Russia has every chance to succeed. I wish it will.

Time for stronger disincentives for those on the take

The RF State Duma is considering President Medvedev’s bill making a bribe-taker/giver liable to fines of 100 times higher than the bribe itself. A great move in corruption-plagued Russia, on the face of it, but is it going to make a difference?

Whether or not Russia will be able to vanquish the high level of corruption it faces is an extremely important issue. A lot of people today wonder how to reduce graft in this country and what mechanisms can be used to eliminate these types of practices and make Russia more attractive for foreign investors.

My opinion is that before we answer the question how we need to understand why Russia has suffered from so much corruption historically. What are the root causes of this? It’s very important for Russia to understand those and only through that to then create new laws which will reduce graft.

To my mind, one of the main root causes of corruption is that Russia has been a classic, top-down, centralized commodity economy for nearly its entire existence. In this type of economy, a certain legal structure has been developed, which historically protects those owning resources of the economy and enshrines the latter’s position above the law, making the rest of the population live below the law.

Therefore, one has to address the entire concept of law. I’d like to draw a parallel with protection of intellectual property.

The innovation-driven economies have extremely high penalties regarding IP fraud. For example, in the United States you can see very tiny small companies or individual entrepreneurs suing large global companies and literally winning billions of dollars in the IP lawsuits. If you look at other strong innovation clusters such as Israel, Finland or Singapore, they have very tough laws protecting IP, too. The penalties they have could bankrupt the largest companies in the planet.

But with China or other emerging markets, one of the basic problems they have is that the penalties are very low, and for someone to break the law and have a very small fine is not enough of a disincentive. According to some articles I’ve read, the largest fine ever paid for breaking IP laws in Russia is 125,000 euros.

I would 100% agree with new laws coming out that will increase the fines that people involved in corruption will have to pay. The very concept of what bribe givers and takers deserve has to be dramatically reviewed. In this light, the new proposal by President Medvedev is in line with what disincentives for people who act in such a way should be.

Societies behave according to the laws that are passed. If laws are weak, people will take advantage of those laws and act on their own behalf. If laws are strong, then society can be guided by those laws and this, in effect, increases the trust between individual parties. Likewise, if the institutions that guide a free-market economy and a democracy are weak, a system cannon work as efficiently as systems with stronger incentives for positive actions and disincentives against negative actions.

The law is the instrument that society agrees to use to regulate itself. This is the bottom line. If society as a whole wants to create a market economy with strong democratic institutions, then the people responsible for setting laws must develop and write those laws correctly, implementing them on the ground, on a daily basis, at the local and national levels.

This is a critical aspect Russia is going through now. In the U.S., for example, the legal system has been evolving over the past 200 years; Russia has only had 20 years for that. It’s very small amount of time, and it’s understandable that people writing laws in Russia very often have no business experience. So, how can they understand the implication of a law?

The first thing is to start putting in the basic structure of commercial law. The next step is to start building the body of case studies of how that law works, with example of where it works properly and where it fails. Lawyers, prosecutors and judges will begin to build the body of experience so that if a law is written badly, it will show itself with many negative examples which society rejects.

And in the end, laws that don’t work will not properly motivate people. If people are not properly motivated, they will not follow the actions that the government wants people to do, like investing in innovation. If laws are correct, innovation and investment will follow.

So, will Russia always suffer from high levels of corruption? No. I believe that by choosing the path of increasing the strength of laws, the disincentives to cheat and the incentives to do things properly, and by shifting the economy away from trading and more toward investing in technology and innovation, a critical mass of an effort to change Russia as a system will be created. This will support the ability for people to negotiate in a fair way, and when they suffer from some inequities they have a way to address those.

When people trust the law, they will enter into legal contracts and they will do business. If they don’t trust the law, then everything has to be done secretly and in a corrupt way. So, by strengthening laws against bribery you strengthen the system. Each law is like a brick laying a foundation for a new system.

Standards vs. creativity?

Russia has gotten carried away lately with heated debates regarding new educational standards for high schools. This is understandable; what and how our kids will be taught concerns each and every one of us, and molds this country’s future capacity. It is an important determinant that economic growth hinges upon, as skilled workforce is as prized an asset globally as Russia’s commodities.

Each camp has its own pros and cons arguments. When I listened to them, as a former schoolteacher I first tended to side with those who are worried about the new standards. But it dawned upon me then: why do schools need federal educational standards at all? We have a Centralized Testing system of exams that lists a minimal number of subjects to study; why not allow each school to teach a select number of subjects outside the list to an extent the school deems necessary? The authors of the new standards want multiple-choice alternatives for schools; so, the above option would provide a student and his parents with a choice of a school to go to. The reformers’ opponents advocate classical approaches to education; with what I just said there will surely be schools that cherish traditions.

I went on thinking and asked myself: why does such a vast and multi-culture country as Russia have to have so many various standards? Why not grant the regions permission to levy or abolish their own taxes (keeping the federal taxes intact, of course)? Why not let each region think of how to raise budget revenue while presenting itself as investor-friendly?

Or: why does almost every Russian company set January 1 as the beginning of a fiscal year? It is so inconvenient to prepare for a holiday season, do shopping, etc. and at the same time think of planning and reporting. Most international corporations start their fiscal year on April 1 or July 1, and they do fine…

There is a whole raft of standards, both written and verbal, which we hardly ever analyze. But if we bother to do so, we will understand that preserving all of them makes little sense. And as we do, then we’ll be more confident saying that Russia’s competitive advantage is not only well-educated but also unorthodoxly thinking and creative people.

A centrifugal force of Russia’s innovation

It seems to me there’s a growing critical mass of different individual catalysts that are themselves initiating new innovation-stimulating projects.

Many of these are emanating from Moscow out to the regions. Look at the project GreenField, look at StartUp Point or Start in Garage. There’s a lot of new types of people that are emerging, who feel there’s an opportunity for Russia to develop this new innovation economy. They are actively starting to go out of Moscow and participating in regional conferences, regional innovation conventions, i-Camps, various Seliger types of programs that are bringing these young people together.

Just as you can see around the world, young people networking through new media, though Facebook, LinkedIn or alternative social networks are starting to collect themselves into groups. They are starting to begin to support one another. This is a critical phase because when all entrepreneurs view each other as competition they don’t help each other. And as young entrepreneurs realize that they are in a common cause and need to support one another sharing experience, networks and contacts, these things begin to build a critical mass.

Why are such areas as Silicon Valley successful as innovation clusters? Because of the liquidity of movement of people going from a year or two in one company to another company, and every step on the way they are building their personal networks. This is what creates a critical mass of an innovation cluster.

Up to this point in history Russia’s market economy began with ‘Big Bang’ of privatization back in the early 1990s. The people that took over many of the companies were ‘red directors’ or government officials—just people who had no prior experience in the market economy.

So, absolutely everything that happened in Russia’s evolvement in the last 20 years is more or less understandable. There were no ‘smart money’ business angels here; everything had to be developed from scratch. Corporations were bought and large-scale industries were privatized into a very small number of people’s hands.

But today the people who are in their twenties have a completely different mindset. They had 20 years of a different education, of different upbringing, of parents who themselves are first-generation entrepreneurs and worked in the world in a different way and viewed life in a different way than previous generations.

So, these young people—just as in Egypt, the Philippines, America, the Middle East or Thailand—form themselves into their own individual independent social networks. And that’s exactly what’s beginning to happen in Russia. What I can see is that many of the leaders of this effort are coming from Moscow out to the regions.

That’s my main point. They have found that the networks they built in Moscow are extremely valuable, and they can see that it’s in their own self-interest to go out into the regions to find new partners, alliances and representatives to expand their own businesses, networks and experience. So, more and more young people from Moscow who are real leaders in this new generation are bringing in their new brands and new products.

People like Yevgeny Savin with UNOVA Media, like Elena Masolova with AdVenture, Renat Garipov with GreenField, and with StartUp Point, the BIT competition, etc.—the list is growing day by day. Future Russia and the Bortnik Fund’s U.M.N.I.K are other programs. These support programs which the Russian government initially created are now spreading down to a next layer of people.

And this is the critical phase. My view is that the next five years are going to see a massive increase in liquidity of young people going around to the regions. As transportation and infrastructure improve, as lower-cost hotels are established, it will be easier for people to take a speed train from Moscow to Nizhny Novgorod or St. Pete; easier to take a flight to Samara or to the new beautiful airport in Ekaterinburg. It’s easier when you can go and stay in low-cost two- or three-star hotels. So, as this infrastructure develops more and more people will reach out to try and expand their own business and their own networks into the regions.

Marchmont is encouraging that now for more than five years. We’re trying to support these types of programs because what we’d like to see is a critical mass of these types of people developing their own businesses. We realize what role that will have in the development of Russia’s IT sector. And not only IT, by the way.

We firmly believe in the huge potential for Russia’s nanotechnology, biotechnology, energy-efficiency, automotive components. We see huge potential in Russia’s advanced sciences.

IT is an extremely important sector, really moving this world forward right now. IT has a lower cost of entry; it has a shorter investment horizon; it’s easier to develop an IT project compared to developing the new generation of metal which may require millions of dollars worth of equipment for testing. Developing new medicines per day can only be done by the largest global multinationals that have deep pockets to invest in clinical trial testing. So, a lot of these types of more advanced technologies are very difficult for new young Russian entrepreneurs and innovators to deal with; therefore IT is a natural pool for people to jump into and develop.

That’s absolutely logical and absolutely correct. I however really feel that Russia has potential to develop new medicines, new generations of metals, alternative energy sources, life sciences, and so on. I think that as these entrepreneurs become more established in the regions, they will eventually begin to help their friends in laboratories, universities and R&D centers develop their business in other more advanced scientific spheres.

Marchmont wants to position itself exactly as helper in developing that growth in other technologies emanating from Russian regions.

So, am I optimistic about the development of Russia’s regions?

Absolutely.

Am I optimistic about the development of Russia as a leader in the innovation sphere?

Absolutely.

Do we see the opportunity for creating wealth, generating value and really improving the living standards of the Russian population through this?

Absolutely.

One of the key things we want to see is when parents talk about their children they do it with pride that their children are entrepreneurs and innovators. A good friend of mine in Moscow was recently talking about the fact that for her it was very important to know that the children of her friends are creating new real things that improve life in Russia. For her it was very important to know that it’s not just about exporting the top technology to the United States or wherever—it’s about innovating the way we live here, and improving the quality of life here.

And I believe that this trend that Moscow people go out to the regions is simply going to extend the process of increasing efficiency, modernization, and the quality of life by having better ranges of products. Having a better range of products results from having better infrastructure for cold storage, refrigeration, transport. All of these things are innovations which Russians can develop here, and develop companies to provide these innovations and services inside of Russia. I think this process starts in Moscow and is going to accelerate and spread throughout the country.

Taking stock of your potential investment

One of the pitfalls in VC financing is erroneous perceptions that investors develop when analyzing entrepreneurs. Not completely erroneous, of course, but rather vague and ungrounded.

Unfortunately, sticking labels on people has always been a tendency. Those labels are a ‘summary’ of what a person has done and still does, and others tend to build upon those their ‘forecasts’ about how the person will act in future. Assuming that an entrepreneur’s past flaws will not necessarily repeat in future is routinely ignored. Analyzers simply take an occurrence and develop their long-term perceptions of other people based on that occurrence.

Sticking an ‘honesty’ label is a classic, I think. We use our prior observations to say if a person is honest or dishonest, thus alleging that the person will be such in all of his future moves.

It’s not so easy to determine whether or not an entrepreneur will act honestly; each step could be interpreted differently, depending on what circumstances preceded it. An investor looks into the past and analyzes how an entrepreneur was evaluated before, but in most instances the investor lacks current data to see if the entrepreneur is honest enough now.

Even with the data aplenty, you can’t fully rely on their truthfulness. According to much research, there’s a major flaw in testing people for honesty, as all of us have at least once done something, for which we can be called dishonest, but does that mean we all want to do other dishonest things in future?

Such traits as perseverance, aggressiveness, inclination to dependence or submission and others are as hard to determine as honesty. While some other traits of an entrepreneur’s character may be just irrelevant.

So, how to take stock of an entrepreneur?

When we assess a person, we set for him standards that we expect from him or adhere to ourselves.

We develop ideas we expect people to act upon, based on prior experience.

When assessing we do not weigh all pros and cons in everything a person does. We respond spontaneously and are oftentimes dependent on our intuition. Intuition is a skill that can hardly be studied and which we typically use unconsciously. We always tend to subconsciously weigh up other people’s doings as ‘correct’ or ‘incorrect,’ and we do not ask ourselves what our assumption is based on.

There are two major approaches to evaluating an entrepreneur that are still valid: analytical and psychological.

The analytical approach is used when an investor completes his study of an entrepreneur (recommendations received, credit reports scrutinized, etc.), and comes down to the investor getting answers to the below questions:

• How will the entrepreneur treat the investor and his company?

• Does the entrepreneur have the traits of character that one should have in this particular business field to achieve success?

• Do the entrepreneur’s traits match those that ensure a successful business?

The psychological approach provides no answers to why people act in a certain manner and not otherwise. The approach helps figure what a person is capable of. With this approach an analyzer purposes to frame a ‘pared-down model’ of the person under scrutiny to predict his reactions in various situations rather than reasons for the person’s action.

You may request the person to undergo some tests (not the best option, I believe), or you may ask him to tell you his life story. Encourage him, and he will eagerly give you an account of his family, achievements, business experience or what he thinks of important aspects of life. It takes asking open questions and be able to listen. A good listener will hear many things he’s interested in reveal themselves unsolicited in a conversation. What questions are worth asking?

First of all, about intellectual efficiency. An investor should try to compare this manager with others he has ever met to see if this new one is part of the investor’s top list (5% of the best). Can the person learn fast? Can he think in conceptual terms? Can he work with numbers fast and accurately? Is he equally skilled in expressing ideas verbally and in writing? Can he make impromptu decisions or does he only stick to plan?

Secondly, about his business approaches and styles. Can he prioritize things or doesn’t know what to start from? Is he impetuous or prudent in decision-making? What strategy does he prefer? Is he reserved or quick-tempered? Sure-footed or easy to stray with the wind? How does he react to force-majeure? Are his goals realistic?

And thirdly, about his personal relationships. What type of relationship does he prefer with his bosses? Is he sincere, stubborn, loyal, responsible? How does he prefer to build relationships with inferiors? Does he feel his responsibility?

A VC investor doesn’t have to have a psychologist on staff to be able to screen an entrepreneur’s personal qualities. Learning some psychological techniques and applying them in work would do.

What do VC investors expect from entrepreneurs?

Personal characteristics:

• High efficiency

• High risk assessment capabilities

• Ability to convince

• Detail-oriented performance

• Psychological compatibility

Entrepreneurial experience:

• Knowledge of the market

• Business records

• Leadership

• Reputation

I recommend that as you analyze an entrepreneur you put down five things you liked and another five things you didn’t like. If a ‘like’ list is shorter than that of “dislike’—do not invest in such a person. When you detect negative traits think how you would act in his shoes. Sometimes, when interacting with your entrepreneur, you might come across things that may prima facie seem negative. If you do not delve deeper and make a no-investment decision, it might turn out that you have missed a terrific investment opportunity.

As an investor you have to consider everything. And make the right decision.

Out of the flu: a famous deadly foe unlooked-for

Russia’s still reeling from the global economic meltdown and its aftermath, but another foe is already taking out domestic businesses. In 59 Russian regions accounting for more than 60% of this country’s population, flu and acute respiratory viral infections have topped the permissible maximum levels.

You may think that the above doesn’t belong here and the crisis and flu just can’t be compared. I disagree; both recessions and outbreaks of diseases are external factors that adversely affect the Russian economy.

Lots of my business partners have been frustrating me lately with plans derailed, promises undelivered and deadlines pushed back, explaining that their responsible staff were sick. It’s a delayed-action mine for thousands of businesses in Russia.

Unlike the economic recession that is typically not very easy to predict (but still requires preparations for), the outbreak of flu and other acute respiratory viral diseases always coincides with winter—a season one doesn’t have a tough time forecasting. Why didn’t most of Russian entities take preventive measures?

Vaccination is a measure but doesn’t work 100%. But why then not let staff work from home in a web-based mode? Well, it’s true that some employers disfavor any remote kind of operations as they fear employees might leak commercial secrets to outsiders. Here’s an important nuance, however. With a company’s ability to introduce one innovative solution after another, thus developing fast enough to always outperform competitors, will such a company ever need the very notion of ‘commercial secrets’ in the first place?

“Take this Cup away from me..?”

I’ve heard many Russian colleagues and friends speak a lot, and with excitement, about the 2018 FIFA World Cup ever since the awarding ceremony in Zurich last December sent Russia into euphoria. Some others I’ve heard were less sanguine. I also took thought about the developments the other day, and in speculating on them I reflected on issues, which are pretty far away from soccer—and still are intimately related to the prospective Cup.

First of all, let me say congratulations to Russia on winning the opportunity to host the World Cup in 2018! This marks another success for Russia in a global competition to highlight its newfound strengths and develop its potential in the 21st century.

There appears to be a lot of such successes lately, with Skolkovo, with the Sochi Olympics; new bridges in the Far East, large-scale techno-parks, special economic zones… and now this. And a lot of these successes are indeed very important infrastructure work. The question is how to prioritize developing such projects in the country; what are the main requirements and needs?

On the one hand, it’s very important for Russia to show itself off as a leader in the global economy. On the other hand, there’s a lot of domestic problems, pretty serious ones, that need to be fixed, and this involves infrastructure. This involves water purification, hospitals, roads, etc. It’s a matter of what the strategy of the leadership of the country is in prioritizing which project to accept and which to reject.

I’m not sure which of these projects are really more valuable. They are all infrastructure; they are all going to create jobs and opportunities for people to build things, and in Russia we all know what that means. So, it’s kind of hard to pick and choose, but I can say that in picking the priorities my suggestion would be to focus on what’s going to improve the efficiency of the economy and the quality of people’s lives.

I think the Olympics are very important because the event crosses very many boundaries; it is sports for all ages. The World Cup is a particularly political topic, and certain age groups are really focused on this sport and support it; it is a particularly ‘hot potato’ right now. And if Russia won this opportunity, it’s probably very hard politically for the power in Moscow to turn this opportunity down.

But to what degree will Russia pick and choose going forward?

Clearly, the country needs massive investments in water purification and other infrastructure projects. I think this is essential. I believe this country needs to develop the mechanism on how to award contracts. I’ve seen editorials of leading academicians from the New Economic School, the Higher School of Economics and others, which clearly point out the importance of Russia developing its tender process.

In any of these projects the first priority is to look at what this country really needs; the second is to really spend the money efficiently. In doing this, there should be a transparent process to evaluate different competitive proposals. This is where Russia really can improve itself and show itself off internationally by having fair open tenders that would allow participants from all over the world to take part in building roads, stadiums, hospitals, in supplying equipment for hospitals, etc. Domestic Russian companies need to be given an equal fair chance with international companies as well.

In such a case that the Russian elite decides to modernize their tender process, not only will they be helping to improve the infrastructure but they’ll be using the people’s tax money in a most efficient way.

18+

Innovation has become a buzzword around here. Everybody keeps saying, “Russia must push for innovations to get rescued! Modernization can only materialize with innovators!” All that is true; I agree it’s high time we said bye to the commodity economy we have had. However, innovative ideas do not come out of the blue; they get conceived in the minds of the inspired.

Being innovative always takes change; one has to tear himself or herself away from the comforts he/she is used to. Who will want to work in uncertainty and high-risk conditions? That’s right; those are innovators. They are ready to move mountains to see their ideas accomplished. They make progress possible; they invent, create, try and improve goods, technologies and services that push the entire civilization upward and forward.

When we talk about “setting up a partnership” with a certain company we have in mind a very specific person representing it (the CEO, a sales manager, etc.). This is the person who is motivated to have anything to do with us. The same is with innovation; there’s a specific person behind each innovative idea. Who’s the guy? What makes him different from others? What dominates his character?

With more than ten years of experience in venture business I have a clear picture of the innovator I have worked with. This is how I view his personality:

1. Inquisitiveness. Innovators vigorously study the world that surrounds them. They look for opportunities everywhere.

2. Challenging a ‘status quo’. A current state of things doesn’t content innovators and pushes them to action. They tackle routine head on and oftentimes defy themselves.

3. Self-motivation. Innovators are pro-active in studying their environments because this helps such people develop. They are quick in hunkering down when they have an idea. They take action instead of just talking and are not always rewarded for the efforts made.

4. Vision. Vibrant imagination is innovators’ second nature. They peer far beyond today.

5. Risk. Innovators break free from their ‘comfort zones’ and experiment, undeterred by the fear of making a mistake. A failure is sometimes more precious than success.

6. ”I have a dream!” Innovators can identify opportunities where other can’t. Their great imagination helps them depict unimaginable things—things that they can turn into reality.

7. Sportiveness and a sense of humor. Innovators prefer the unanticipated and can piece together what others deem incompatible. They aren’t afraid of looking silly or acting childishly; they are venturesome and laugh a lot.

8. On the move. Innovators don’t ‘take root’ and prefer changing their working environments, moving from office or home to restaurants, libraries, forums, exhibitions, etc. They travel a lot in search of inspiration and new ideas. They are cut out for moving and embracing the world.

9. Seeing the backbone. Innovators can see links between seemingly isolated things and try new combinations to bring them together. Such people identify the core of a problem and make use of the fundamentals.

10. Reflection. They ponder a lot on problems and ways of addressing them. They can develop ‘clear consciousness’ and use their inner sight to find solutions.

11. Modeling. Innovators are astute and know everything that surrounds their ideas. They can discern trends where other can only see trifles and are therefore able to visualize the future in its entirety.

12. Defying uncertainty. Innovators feel comfortable in chaos and aren’t afraid of taking risks. They aren’t content with just one solution and seek as many options as possible.

13. Always learning to fly. Innovators need new knowledge just as flowers need the sun. With new information in hand they immediately try to apply it. What makes them efficient is quick move from looking for information to implementing ideas.

14. Balancing intuition and analysis. Innovators trust their intuition within reasonable limits but also scrutinize situations meticulously. They employ both cerebral hemispheres to do their work.

15. Wording ideas. Few innovators have the ability of presenting their ideas to audiences in succinct and comprehensible ways. Many tend to speak in abstract or overly scientific terms feeling no ‘wavelengths’ of their audiences. Stewing in their own ‘idea juice’ they find it hard to convey their messages to listeners.

16. Resilience. Innovators attract both positive and negative energy and use both to keep trying until success is achieved.

17. Flexibility. Innovators are like chameleons; with their openness to change they easily adapt to any environment.

18. Doggedness. Innovators are workaholics. They are persistent and persevere to get what they want. Their focus on end results helps them achieve success.

This is a ‘model’ innovator. Let’s try and look for more traits—or maybe question some of those mentioned above.