Nevyansk shows the way on entrepreneurialism

Despite Russia’s notorious red tape and corruption there are places where small and medium business is booming. At Nevyansk many people had to become entrepreneurs to survive.

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Once an important metallurgical center, Nevyansk produced weapons for 3 centuries -for Peter the Great as well as for the Soviet Army. But after the planned economy failed and the arms race cooled, 35 thousand people were left to deal with capitalism on their own.

As is the case with many Russian localities, the livelihood of this little town in the Urals was supported by a single factory. But after this military hardware facility was closed in the 90s almost half of the working people here had to become businessmen.

Little shops, dentists, beauty salons occupy ground floors of literally every block of flats.

Aleksan employs several handicapped workers to pack napkins, a family of potters run workshops.

The head of the city’s SME support fund, Olga Frelova, says the crisis of 1998 forced people to become entrepreneurs. But that helped them survive the most recent economic turmoil.

“If you ask our people now – do we have a crisis? They will answer we didn’t notice it. At that time we were training a lot of people who got fired and now they are opening their own businesses.”

Some experts say, a large number of self employed is s sign of a poor country – the same as lots of people in agriculture. According to OECD, the highest level of self-employment is in China 51% and Turkey 42% …the smallest is in Luxembourg 6% and in the United States 7%.

But Tatyana Avramenko, Community Relations head at Citibank, which trained entrepreneurs here, says it’s a sign of a vibrant economy.

“In some cities these small entrepreneurs started their business and employed almost all workers who used to work for bankrupt factories. America's big success stories also started from small businesses. To end up with several big innovative companies – you need a massive number of entrepreneurs.”

Elena Arbruzova, an entrepreneur says the spirit is much like the family.

“The profitability of my business is so far like this – I paid the rent, I paid salaries, I put aside for new materials and paid taxes. Good if I have something for my existence. But my business is now like my third child.”

Elena was one of those who received 2 thousand dollars from the state budget – as a part of an anti-crisis program. Experts say, the government should subsidise business initiatives – rather than artificially supporting old industries – that could collapse any day.