Where have all the Russian entrepreneurs gone?

Posted on September 16, 2014

When I was 17 years old, then a nerdy high school student in Moscow, I created what the Russian government has been desperately trying to engineer — a start-up with some of that Silicon Valley–style magic. It was innovative, tech savvy, ahead of its’ time, cleverly marketed and could be run out of my parents’ apartment, to minimize costs. By the time I graduated from one of Moscow’s elite universities, the company was on its way to making me a millionaire. Being on the right track, you’d expect me to not want anything to change, right? Wrong. The company was also getting big enough to get the wrong kind of attention from officials. So I took no chances.
One day after graduation, I packed up the only resource of the firm, my laptop and emigrated to the Czech Republic, taking my company with me. I doubt I will ever return. The reasons for my move, as well as my haste, are the typical worries of the young entrepreneurs in Russia: corruption and bureaucracy. I am almost convinced that the entrepreneurial activity identified by GEM in the 2013 report amongst the youth is not a result of disinterest. The interest is there. What is lacking however, is a conducive environment for sound business practice.
In the past years, over 1.25 million Russians have emigrated, most of them young businesspeople according to a report by the head of the state’s Audit Chamber, in 2010. This was more than the amount that left the country in the first few years after the soviet collapse. The economy is stable now, but business owners are threatened. It proves that it takes two hands to clap: the interest of entrepreneurs and the creation of an entrepreneurial environment that carries support.
For those just starting out, the most common fear is not competition or bankruptcy but a visit from corrupt officials, who go around soliciting bribes or offering paid protection. In case this is not already obvious, citizens who are taking risks on their lives, finances and time, are threatened into paying officials not to harass them.
Security provisions seem to be on the rise. In 2010, Russians paid $581 million in bribes to authorities, this was 13 times more than in 2005. What can be expected if one declines the security services? Although no longer covered by mainstream media (because the events have become so common) social media expresses that often, business owners are repeatedly visited by tax auditors or the police until their company’s are overwhelmed with fines.
But it’s not all doom and gloom. The environment is unfruitful – but we are entrepreneurs, when has the environment ever been a limitation? With global opportunities and a laptop, my millionaire story is about to be complete.
Ahtoh Ivahnof