Russia is by far the largest country in the world. The country covers an area all the way from Europe in the West to North America in the East and bordering with Asia in the South, and boasts a vast geography that spans eleven time zones.
Emerging as a diverse nation after a long and eventful history, Russia’s growing and strengthening consumer economy, with a market of over 140 million people, is evolving into a prime location for investment. Business opportunities can be found in many sectors of Russia’s economy and strong support exists for investors from both the government and the Foreign Investment Advisory Council (FIAC).
Doing business in Russia offers the following key benefits:
Stable and Growing Russian Economy
According to Invest in Russia, Russia boasts one of the most dynamically developing and attractive economies in the world. Since 1999, GDP growth has averaged 6.8% per year and reached 8.1% in 2007 (compared to 4-5% average world economic growth). Thanks to the strengthening rouble, in dollar terms the 1999-2007 GDP growth was an astounding 26% per year, far outstripping international growth rates.
Russians generally subscribe to attitudes that promote equality, reciprocity and mutual advantage in business and a “deal” is often regarded as an opportunity for equally shared benefit. Personal relationships are also of great importance in Russia. When doing business in Russia it is worth investing time initially in creating strong bonds, as these are likely to form a solid basis for future business negotiations.
Large, Educated Consumer Market
There is untapped potential in Russia’s captive market of over 140 million people whose incomes are steadily improving. Additionally, Russia’s strong educational system has a good reputation for producing a highly skilled workforce and discerning consumers. The talent of the Russian people is starkly evident in the achievements of Russian art, music, literature and architecture.
Unique Geographical Location
Russia’s massive geographical presence spans a distance unmatched by any other single country. Linking Europe with Asia and bordering the North American continent, Russia has excellent access to sea, road and rail routes and is home to several major airports. Russia’s location is further supplemented by its vast natural resources of mineral reserves, coal mines, natural gas and timber.
Russia is a predominantly collective society, with a communal spirit perhaps stemming from its history and climate. Russia’s severe winters and geographical conditions have meant that collaborating, rather than competing has been necessary for survival. This sense of co-operation and togetherness must be considered when doing business in Russia, especially when communicating with Russian counterparts. For example, it is important to remember to address the group rather than the individual.
International organisations can profit immensely from the above benefits of doing business in Russia. Utilising these benefits comes with the necessity to create effective strategies for navigating the geographic, political and cultural diversity of Russian society. This requires a comprehensive understanding of Russian business and social culture on all levels.
International organisations employing people in Russia or doing business with Russia on a regular basis should therefore participate in cross-cultural training programmes for business and management such as Doing Business in Russia to ensure they develop the skills to successfully deal with the many cultural differences in working preferences, values and communication styles.