The view from St Petersburg: Peter Loukianoff
President Medvedev’s keynote speech at the St Petersburg International Economic Forum outlined his vision of Russian economic development, and discussed recent successes such as the successful IPOs of Yandex and Mail.ru.
Other topics include the development of a $10 billion state private equity fund a $30 billion asset sale. According to Medvedev, Russia’s Government will come up with particular figures and the list of the Companies involved in the near future.
“The government doesn't need such a large amount of property. The government has submitted its ideas for the schedule for privatization of major companies. The implementation of these plans is necessary but these plans are very modest. The government has until the first of August to adjust the scale of privatization in order to resolve this. I am sure we will be able to go through with the privatization in a modern, transparent way, in order to attract effective private investors and generate sufficient funds for the Russian budget.”
He noted that the Government in Russia should rather foster private business than act as an owner of the economy, with participation in international economic organizations a key part of that.
“Businessmen have a saying: markets are just like parachutes – they only work when they're open. And the case for Russia is that we will fall hard if our economy is not open. That’s why we will lower barriers for foreign investment and are looking forward to finalizing our membership of the WTO and OECD.”
RT: How would you rate Russia’s IT industry right now, and how would you strengthen it?
PL: “Well the industry itself is very young. It’s only, by a number of estimates, ten years old, in terms of the environment of software development. So in terms of strengthening it, it’s made tremendous strides already, but as we always focus on value, it’s about management in addition to education. So really those are the two areas where Russia can strengthen itself."
RT: Now like President Medvedev highlighted in his speech, he said that Mail.ru, Yandex, were successful Russian IPO’s. Do you think there could be repeats of that? Could we see more?
PL: “Absolutely, I think so, there is really, Russia is interesting in two ways, in that it’s a large enough internal market that there are opportunities here domestically, but as well there is tremendous technical talent that allows companies to be globally competitive and be able to compete in other international markets.”
RT: Your firm does have a strong interest in Russia – Skolkovo project – what kind of projects and results do you think we could see from that?
PL: “Well generally when a government is focussed on innovation and developing capital, it is great for that to happen, and we are very supportive of what the Skolkovo idea is. There is still a lot of implementation to happen, but the main idea is still to have businesses start – company creation happen – and have entrepreneurs understand that there are opportunities out there and that they can be the next leader big thing and go out there and make it happen.”
RT: Now there is a wide spectrum of IT in Russia but do you think there is any gap that needs to be filled, in terms of Russia’s IT sector?
PL: “Well again, I think it goes back to management, I think there is tremendous technical talent here, and what we have seen over the 90s where people who had technical talents grew up over time and became good managers as they went into other industries. And now you sort of see those people coming back into IT. But I think there is still a gap in terms of product development talent, and marketing and sales skills. And that is where some of the business schools here, locally as well as internationally, can help.”
RT: And in terms of the criteria, what do you look for in investing in Russia?
PL: “It’s all about people, same in Silicon Valley. We look at quality people, and there are so many strong people here, people skills, and we continue looking to see fantastic opportunities. We actually saw several years ago, it was sort of a trickle in terms of the deal flow. And now we are seeing two to three companies per day coming looking for funding.”