In the 90s, businessmen were afraid of bandits, now - the state, a study conducted by the consulting company PwC on changes in Russian business over the past 30 years showed.

More than half of Russian businessmen (52%) believe that it has become more difficult to conduct business in Russia compared to the 1990s, according to a survey by the NAFI research company commissioned by PwC. 1001 businessmen took part in the survey, and two groups of entrepreneurs were among the respondents: those born in 1957-1963 and in 1980-1991. The survey results are presented in the PwC study “Flying From Shadow to Light”: Russian business over the past 30 years through the eyes of its “fathers” and “children.” 

At the same time, different generations differ in their views on the changes that have occurred with Russian business over the past 30 years. The generation of 60-year-old businessmen basically believes that doing business in Russia in the 1990s was more difficult (59% of respondents answered this way), while among younger businessmen only 38% share this point of view. Of this group of respondents, 55% say that now it is more difficult to do business in Russia than thirty years ago, another 7% find it complicated to answer.

The main thing that has changed for the worse, both according to 60-year-olds, and millenials, is the level of taxation (25% of “fathers” and 31% of “children” noted this among negative factors). Representatives of both generations also noted the administrative barriers that have  appeared (20% and 24%, respectively) and restricting laws (15 and 14%). Those businessmen who believe that it has become easier to run a business drew attention to the availability of services and transparent schemes (almost half of them were in both age groups), as well as the absence of crime - this factor was mentioned by 20% of the older generation of businessmen and 16% of millennial entrepreneurs.

Life or reputation

The main risks of doing business in the 90s, were identified by respondents as murder, physical abuse and a threat to security for family members. Now the main threats are different: this is the loss of business reputation, imprisonment or forced emigration.

 

Most young businessmen (59%) believe that in the 1990s it was impossible to conduct a successful business in accordance with the law. In the group of 60-year-old businessmen, 56% agreed. At the same time, 39% of “youth” and 48% of “fathers” believe in completely legal success in business today. The business environment has changed a lot, respondents admit. “In the 1990s, you should always have about $ 100 in your pocket to pay off the police,” PwC partner Tam Basunia recalls.

 

As for the level of corruption, representatives of both generations do not see positive changes here. Businessmen of the 90s (46%) generally believe that the level of corruption has not changed over 30 years (only 17% see a positive trend). Millennial businessmen have an almost equally pessimistic vision - 39% of them believe that with corruption everything has only gotten worse, and only 24% are sure of the opposite.

New values

The current generation of young businessmen call education and determination the main qualities for business, and the ability to take risks and resourcefulness for older businessmen.

 

Respondents more often describe a modern businessman in positive terminology - “responsible” (62%), “competent” (71%), “honest” (48%), in contrast to representatives of the 90s business who are called “thief / bandit” (62 %) and "impudent" (56%).

 

The study recorded a different perception of the quality of top management among businessmen. 50% of respondents believe that the experience of the early 90s is useful for successful business management in our time. However, 42% of respondents believe that entrepreneurs who have been working since the 90s find it difficult to manage modern business.

The state  

60% of respondents believe in private business and only 28% of respondents consider state-owned enterprises more efficient. At the same time, 68% of respondents consider state regulation to be excessively strict and are sure that business should be given more freedom.

 

“The state’s participation in business and capital is now very significant, many large companies are directly owned by the state or controlled by them. There are problems with protecting property rights; the judicial system is not very effective. Nevertheless, in comparison with 1989, Russian business is quite confident, and this is not only about the commodity sector. There is a great desire to diversify the economy, but success here is not so noticeable,” the former deputy finance minister Sergei Shatalov says.

 

Representatives of both generations agreed that, in a number of ways, doing business in Russia has improved over 30 years due to increased macroeconomic stability, simplified procedures for starting a business and increasing availability of loans. However, things are worse with fuel and electricity prices, as well as with the qualifications of employees, respondents said.

 

Business tasks have also changed. “Now we have stagnation, as in the 70s: the marginality of the business is much lower,” Ryasova notes. Profitability has declined: now we need to look for ways to reduce costs, but we can increase revenue through consolidation, Demina says.

Degradation or future spurt

Most respondents are optimistic about the future of domestic business in the next 30 years: more than 56% of respondents believe that it will develop successfully, 19% believe that it will degrade, 20% - that it will remain in its current state. At the same time, optimism is demonstrated by representatives of both generations. According to the respondents, information technologies (87%), energy (69%) and trade (68%) will develop in the best way.

 

What should be   done in order   to develop business successfully in Russia? That was the last question of the survey.  22% of all respondents said that state regulation should be weakened, 20% - taxes must be cut, 14% - more state support should be provided, 9% - more loans on favorable terms should be offered, 6% - professional development is needed and   corruption and nepotism must be eliminated, 4% -  sanctions should be lifted and   legislation in the field of entrepreneurship must be changed. Among the factors that impede the development of business in Russia, the survey participants cited high taxes (24%), state control (13%), corruption (12%) and the lack of state support (8%).

 

Sources: https://www.forbes.ru