Young G20 entrepreneurs discuss future at Skolkovo

(Moscow News – themoscownews.com  – Nathan Gray – June 17, 2013) As the 2008 economic crisis took hold worldwide, the impact began to spur a change in the direction of economic policy.

The most notable change was the replacement in 2009 of the G8 in the field of economic development by the G20, a more diverse organization that reflected a growing international role by emerging economies including the famous quintet of Brazil, Russia, India, China and South Africa.

In the wake of the crisis, another movement arose that has been attracting greater attention since its formal incorporation in 2010 as the G20 Young Entrepreneurs’ Alliance, which held its third annual summit over the weekend at the Skolkovo Innovation Center right outside Moscow.

Applause filled the center’s Congress Hall on Saturday as Alexei Komissarov, the head of Moscow’s department of science, industrial policy and entrepreneurship, and Viktor Sedov, president of the Center for Entrepreneurship and the summit chair, announced that the meeting marked the first time representatives of entrepreneurial communities from all 20 members were present at the summit.

“The world is changing so fast, and now the world leaders know that we exist,” Jorge Garcia, one of the organizers of the 2012 summit in Mexico City, told the crowd. “At no other time in history has what we are trying to do been more important, to make and to give opportunities.”

A sense of community

The key points of the summit were not just the role of entrepreneurship in reviving growth in national economies, but also in relieving unemployment among young people, a potential destabilizing factor not just economically, but also socially in countries around the world.

A report from Ernst and Young issued during the summit focused on this element, citing an International Labor Organization statistic that 13 percent of people worldwide between the ages of 15 and 24 are unemployed – as many as 75 million. In some countries, the rate exceeds 30 percent.

“Youth unemployment has reached critical level in most G20 countries and is expected to rise over the next five years, threatening the global economic recovery and raising the specter of a ‘lost generation,'” the report said.

A widening focus, from simply filling a market gap and earning profits to creating opportunities for young workers, is a feature of modern entrepreneurship that was emphasized at the summit.

Another shift in the development of business is the idea of an entrepreneurial community that thrives on cooperation, and not merely competition – a cooperation highlighted in Russia by the summit’s very location in Skolkovo, a government-initiated entity that has attracted partnerships with Western companies such as Microsoft, 3M and Siemens.

While reserving judgement on Skolkovo’s ultimate effectiveness – since the facility was too new to be able to assess it objectively – Jonathan Ortmans, a keynote speaker at the summit and president of Global Entrepreneurship Week, said that it was a signal of start-up communities talking to each other, embodied in then-President Dmitry Medvedev’s visit to Silicon Valley in 2010.

“That was significant in its own right, to at least be examining, what are the core elements of this growth engine?” Ortmans told The Moscow News. “Even since I was here last year, there is more of a willingness on behalf of the authorities to play a supporting role to initiatives that want to succeed in the entrepreneurial space.”

Natalia Larionova, head of the department of small and medium-sized business at the Economic Development Ministry, took the idea further, telling the summit participants that her work in entrepreneurial companies was a gateway to her current post, where, she said, she could help change the environment in Russia to make it more suitable for entrepreneurs.

“Russia is a big country, not just by size, but of great and unique possibilities,” she said. “We understand that young people, young entrepreneurs, are the drivers of economic growth, the spark that allows the economy to [go] ever higher.”

The situation for Russia

Despite the increasing cooperation between government and entrepreneurs – represented to no small extent by the presence of former entrepreneurs in government posts – a major shift is required in the development of an “entrepreneurship culture” in Russia.

This culture “means that everybody understands how important entrepreneurship is: society, politicians, parents,” the Center for Entrepreneurship’s Sedov told The Moscow News. For parents, there needs to be a change in the idea that only an established corporation can provide a fulfilling career.

“The government is saying, ‘We need to create 25 million new jobs.’ Who will create them?” he said. “We really need more people, young people capable of starting their own companies not to look for employment, but to create employment for themselves and for others.”

While the seeds exist, in programs such as an adaptation of the American Junior Achievement in Russian schools, when it comes time for a young Russian to enter the workforce, entrepreneurial interest has dissipated, Sedov added.

According to figures cited by Sergei Kuznetsov, of the state small-business bank SME Bank, the average age of Russian entrepreneurs in 2012 was 37, with only 36 percent of new entrepreneurs from 25 to 34.

Despite the cooperation that has occurred so far, Ortmans believes that the surface has only been scratched.

“The scientific assets of the country are often talked about as being in a previous time, [but] I don’t think they’re aging, I think they’re paused,” he said. “I think that in a nation that has invested so much in its scientific infrastructure, there has got to be a lot more potential for entrepreneurs to go do something with that.”