OREANDA-NEWS. July 28, 2011. Vladimir Putin: Good afternoon,

We held a video conference about two weeks ago when you were at the Innoprom Exhibition in Yekaterinburg. I very much regret that I could not be there personally. I'm told it was really quite interesting. We agreed then to meet with the winners of the contest who joined the Strategic Initiatives Agency (SIA) Expert Council.

First of all, I’d like to thank you and everyone else who took part in this process. There were about a thousand young, active and successful people who participated in this contest. The contest commission, which had to choose four people to head the agency and its three main areas of activity, was faced with the very difficult task of selecting from among a thousand successful, personable and ambitious young people.

I’d like to note that there will be no losers in this marathon race, because we’ll try to make sure that in any event, all of you have work to do, nobody gets abandoned and everyone can take part in the agency’s activities in the regions. As I’ve said more than once, I’d like for the agency not to limit itself to Moscow, not to function only within the limits of the Garden Ring.

We had different approaches and different views regarding the final decision-making. But let me repeat again that despite the complexity of this process the commission had to make a decision, and we did. I’d like to make public the results on behalf of my colleagues. I won’t keep you in suspense any longer. Andrei Nikitin, director-general of the managing company Ruscomposite, has been elected the agency’s director-general. Artyom Avetisyan, president of the NEO Centre Consulting Group, will head the New Business area. Dmitry Peskov, general director of the Metaver project group, will be in charge of the Young Professionals area and Vladimir Yablonsky, director of the state educational institution Information and Analytical Centre, will head the Social Projects area. Congratulations. I’d like to congratulate all of you foremost. I’m sure you will organise the agency’s work properly and turn it into an effective instrument for promoting innovations and forward progress in the chosen fields.

I’m confident that everything will work out for us. Most important is that all of you, practically all one thousand of you, have the drive, the daring and the readiness to achieve success.

The activity of the agency should be striking and multifaceted, it should change existing stereotypes and overcome the barriers of which there are, unfortunately, still so many. We often rightly criticise ourselves about these barriers. I must say that in reality they are everywhere, but we should have fewer of them than in other countries. I’d like to give the floor to those colleagues whose names I mentioned. Let’s start with the director-general. Please, go ahead.

Andrei Nikitin: Mr Putin, thank you for giving me the opportunity to speak. I’m grateful to the members of the contest commission for selecting me. When we started our business nine years ago, we had the option of either opening a trade centre in place of the factory or doing something absolutely new. We chose the second path. Now our company produces 90% of something that has never been manufactured in Russia before. Some products had never been manufactured in the rest of the world, either.

We don’t regret our choice. In my opinion, the agency’s primary goal should be to support projects by removing regulatory and administrative barriers that foster irresponsible behaviour and may lead to disastrous consequences. We must assist business people in packaging projects and obtaining funding from development institutions. I think this should be the main task.

The second task is connected with the image of business people in modern society. To put it mildly, it is difficult to communicate with a society that perceives business people as not exactly respectable. I believe we should improve the image of business people.

Third and final, excuse me, I am a little nervous. The third goal is to improve the business environment. My view on the workings of the government machine is as follows: the government machine carries out instructions, and once an instruction has been carried out hardly anyone ever follows up to monitor the actual effect of a particular regulation on business operations. I believe that the agency should work closely with business associations, Delovaya Rossiya, Opora and so on.

Finally, professional standards don’t get enough attention these days. As a businessman, I can say from my own experience that it’s hard to find good professionals among college graduates. Actually, we are using some ingenious ways trying to find them, including the Zvorykin project among others. The educational standards and approaches practiced by higher educational institutions are totally out of sync with what medium-sized businesses are looking for in applicants.

Vladimir Putin: Mr Nikitin, what is the Zvorykin project about? Please let us in on it.

Andrei Nikitin: The Zvorykin project is run by the Federal Agency for Youth Affairs. This project has young people post their ideas on the internet, and businesses are supposed to choose the ones that are worth implementing. We joined this project this year. We held a special contest as part of the composite materials project and managed to find young people who will help us significantly cut our spending on foreign-based research. In other words, these guys are doing things that… In short, this is really a top-notch way to conduct calculations and manufacture the latest composite and carbonic materials.

Vladimir Putin: Where are these young people from?

Andrei Nikitin: Moscow, Samara, Cheboksary. Actually, from all over Russia, Mr Putin.

Vladimir Putin: They work at research institutions, don’t they?

Andrei Nikitin: Yes, these are post-graduate students and researchers, people who love science and do their work not because… You know, the designs they showed us aren’t about some project that’s being done in six months with the only goal being to get grants from us. These people have been involved in these projects for years, seeking ways to strengthen structures and improve the reliability and service life of various devices.

Vladimir Putin: So, you are hiring them or what? How is it going to be organised?

Andrei Nikitin: We will invite some of them to work with us. Those who wish to stay with their research educational institution, perhaps we will sign a contract with such an institution and they will work on some projects. Anyway, we will work closely with them.

Vladimir Putin: In what fields could their research and designs have applications? What is the end result of their proposals?

Andrei Nikitin: One of the projects pursued by our company involves the creation of innovative composite slabs for building makeshift runways in remote regions to be used by aeromedical aircraft and so on.

Vladimir Putin: This is very important.

Andrei Nikitin: Durability and longevity are very important in such projects. Initially, we planned to have the Dutch run the calculations for us, but now I realise that by using this kind of talent we will be able to do it in Russia.

Vladimir Putin: Great. This is really important, especially knowing that, unfortunately, the small aircraft industry has been unraveling in Russia since the early 1990s. We should move forward with building such runways, because the infrastructure is poorly developed in remote Russian regions. Whether you are aware or not, you are working on something that is extremely important.

Andrei Nikitin: Thank you very much. Finally, promoting social initiatives is perhaps the most important objective. I will not elaborate, because I believe my colleague will do a much better job of this. I can say that personally this will be among my priorities, because this is really important. This is something that we absolutely must do.

Vladimir Putin: Mr Nikitin, speaking about the organisation of work at the agency, what are your priorities?

Andrei Nikitin: I believe that we have chosen the best organisational form for the agency, because, above all, the agency is a civil society institution, right? We should be very friendly towards business, educational institutions and social initiatives. Perhaps the first thing we will discuss with our colleagues will be how to create an empowering environment so that we do not turn into inaccessible bureaucrats. When I was filing the application, I was primarily driven by the fact that this is a non-profit organisation. I believe that we will start with this premise and work concurrently with our colleagues from the expert council on refining specific approaches and ways to support medium-sized businesses. My favourite Eastern saying is that a journey begins with a single step. Thank you very much, Mr Putin, for giving me the opportunity to make this step. We will follow this road. We will try to talk less and do more.

Vladimir Putin: Good, thank you. Please, Mr Avetisyan, go ahead.

Artyom Avetisyan: First of all, I would like to thank the competition committee and you personally, Mr Putin, for choosing me. I understand that the choice was hard to make, and, therefore, my responsibility is great. I know this from personal experience. I started my business at age 22 using my own assets: cell phone, business suit and my confidence in myself. They taught us at the Finance Academy, and they taught us well, that in order to be successful we must stand out from the crowd. It is called “competitive advantage” in business. Back then, 13 years ago, I realised that a deep understanding of Russia and the way business is conducted in Russia will be a competitive edge for my company. This understanding helped my company become a competitor to leading international businesses. Second, the experience I gained from working in a competitive environment taught me that success, however small, doesn’t come by itself, but through hard work. I spent 13 years building my company. I evolved together with my team, and we followed in the wake of changes that took place in the Russian economy. Of course, we knew successes and disappointments. Perhaps the biggest disappointment for me as the head of a consulting company was when the business-building ideas that we generated for our clients failed to get off the ground for whatever reason. When I heard your speech, Mr Putin, about a month ago, where you explained the logic behind the Strategic Initiatives Agency, I realised that this agency will, for the first time ever in Russia, help implement the ideas that failed to be implemented previously. Indeed, there’s a fairly large distance between a good idea and its translation into reality.

The agency is called on to shorten this distance. Perhaps something useful will be created on top of an initiative that comes from the bottom. I think this is exactly the way the agency should work. Any smart and proactive person with a worthy business idea should not only be heard but should also be able to implement this idea with the agency’s help. 

You are all aware of the many problems confronting medium-sized businesses, and I am aware of them from my own experience, too. However, I believe that the agency’s resources should not be spent on discussing these problems (although it’s also important), but on creating the so-called lifts for entrepreneurs in the sphere of social initiatives, training professional teams and, certainly, new projects. Not just new projects, but the ones that can be implemented across Russia.

As a businessman, I appreciate that time is a factor. Therefore, I believe that bureaucracy has no place in the agency.

Vladimir Putin: Mr Avetisyan, how many people are employed in your company?

Artyom Avetisyan: About four hundred.

Vladimir Putin: Quite a lot. You’ve got that many consultants?

Artyom Avetisyan: Yes.

Vladimir Putin: Four hundred people providing consulting services day and night?

Artyom Avetisyan: Day and night, exactly.

Vladimir Putin: Wow! Round-the-clock consulting! I’m really impressed.

Artyom Avetisyan: We’re involved in what is known as project packaging. We make projects attractive to investors.

Vladimir Putin: So people come to you with their project proposals, and you help them find sources of financing, right?

Artyom Avetisyan: Well, an idea, however bright, cannot be translated into reality without a proper business plan. And there’s also a need for a financial model, for market research and for attractive packaging because different banks and investors have different requirements.

Vladimir Putin: So that’s what you do?

Artyom Avetisyan: Yes, we cover the entire spectrum.

Vladimir Putin: I see. I’m torturing you with questions because this is, actually, what the agency will have to provide, albeit at a different level.

Artyom Avetisyan: Of course. Medium-sized businesses have been part of my clientele for 13 years. We’ve had close to 4,000 such clients over this period. One point I’d like to make here…

Vladimir Putin: I wonder just how much money consulting agencies make? How big are the earnings of your agency, for one?

Artyom Avetisyan: We are a medium-sized business, and we make about a billion roubles.

Vladimir Putin: A billion annually?

Artyom Avetisyan: We are among the leaders on the Russian market.

Vladimir Putin: So your 400-strong team generates a billion roubles every year, right?

Artyom Avetisyan: Yes.

Vladimir Putin: Using just a pen and a computer.

Artyom Avetisyan: Well, I was surprised to meet so many bright and talented people over the past month when the competition was in its final stage. I thought to myself that the Strategic Initiatives Agency was, indeed, a step in the right direction. It’s not just a good concept but also a platform for communication. We had an open and frank dialogue in Yekaterinburg. Perhaps it’s that openness that has attracted so many of my business colleagues. I, too, have readily embraced the idea. And now I realise that it’s a serious commitment, as well.

We simply can’t let down the people who are already sending their applications and project proposals to the Agency. And, of course, I feel responsible vis-à-vis you personally, Mr Putin, and all the other people who have chosen me among other contenders.

Vladimir Putin: Thank you. I’d like to point out that it’s not the only forum we’ve got. But perhaps it’s one of a kind. We’re now trying to create a whole network of organisations through which we can propose and implement some ambitious and interesting projects that are important to the advancement of specific fields as well as to the nation.

We’ve created a whole network of special economic zones. They aren’t structured in the same way and their modes of operation differ, but all of them function quite efficiently. We shouldn’t lose sight of that fact. Ms Nabiullina, how many of them do we have, all in all?

Elvira Nabiullina: Twenty-four. Most of these are tourism and recreation zones; only a couple of zones so far are related to advanced technology and innovation. And then we have several industrial and port zones. They are all different.

Vladimir Putin: Indeed. The Agency should operate throughout the country. In my view, it’s extremely important to enable young, talented individuals to promote their ideas and implement their projects on the ground. Thank you. Mr Avetisyan just spoke of professional training. We have a programme aimed at advancing such training among young Russians. Mr Peskov, please have your say.

Dmitry Peskov: Mr Putin, thank you for believing in us. I represent a small firm involved in designing innovative educational systems. The team consists of people from venture businesses, IT companies, government agencies, and higher educational establishments. We’re trying to create training systems that are truly competitive and that could turn out highly-qualified professionals within a short span of time.

To be honest with you, being, as we are, part of what is now known as the creative class, we are rather skeptical and cautious about any initiatives coming from the government.