29 july 2011

Prime Minister Vladimir Putin meets with Sergei Borisov, head of the OPORA Russia national organisation of small and medium business

Participants:
Borisov introduced the prime minister to a recent sociological study conducted in 40 Russian regions that identified labour as the biggest problem facing small and medium businesses. In this context, Putin suggested that the business community concentrate on its relationship with education in order to steer educational institutions towards the demands of the labour market.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Borisov, at all my meetings with the business community, we seem to talk about the same subject – the entrepreneurial climate. I know that you are permanently monitoring this sphere and have recently conducted a survey. What are the results? 

Sergei Borisov: Mr Putin, first of all, thank you for this opportunity to meet with you. I’d like to tell you about what is troubling small and medium businesses today.

Ten years ago, when you were president, you gave instructions to our as yet nascent organisation. Since then, we have grown stronger and have affiliates in almost all regions – with 300 local offices and 150 branch unions. All in all, we comprise 400,000 business owners. And they are not just business owners but are also engaged in public activities. We have become stronger organisationally, have taken on experts, and [have conducted surveys] almost every year… We only failed to do so during the crisis period, which was hardly representative. This year, we conducted a study (which, according to expert opinion, is the most thorough yet) that covers 6,000 business people in 40 regions of Russia. For the survey, they were all asked the same questions, and, as a result, we received a representative picture of the business climate.

Vladimir Putin: For two years?

Sergei Borisov:  The research was conducted in 2010 and the first half of 2011. I must say that for the last ten years, we have been talking about administrative barriers, but now we can say that small companies are gradually freeing themselves from them. They occupied the 7th position [in terms of problems faced by businesses] in our poll. This is a good sign, although they still remain high on the list, and the corruption element – that is, bribes for circumventing these barriers – is still high at 5%. But it is lower than it was in 2004 and 2006. (Borisov shows materials to Putin)

Vladimir Putin: Just look! Labour is the highest rated problem.

Sergei Borisov: Yes, regrettably, it is so, and it is becoming worse and worse. During the study, we surveyed primarily production rather than retail companies. Retail accounts for about 10%-15% here. This is very telling. There are not enough engineers or people with technical skills. We are considering how to resolve this issue and trying to influence the process. Apparently, we can’t do without qualified migrant workers and are struggling to strengthen the creative class.

Vladimir Putin: I believe that it is important first of all to address education – professional, higher, secondary, and special.

Sergei Borisov: Absolutely! You are absolutely right. We are now opening business departments to help future employees of small and medium businesses adapt to current realities [on the labour market].

Vladimir Putin: You know, we’ve discussed the link between business and education many times. We must help our educational institutions – higher, secondary, and special – orient themselves to the requirements of the labour market. But without business representatives, without constant contact and organisation, without…

Sergei Borisov: …feedback.

Vladimir Putin: Yes, without feedback, without real and serious production practice, it will be next to impossible to achieve this result. Therefore, I think we must, by all means, return to the issue of education and business.

Sergei Borisov: Over the course of their education, students must have practical training at business enterprises – that is absolutely right. We’ve taken the first steps, but this is just the beginning. We need systemic measures here. That is absolutely right.

Vladimir Putin: Let’s make a plan, talk with our colleagues from other associations, and schedule a meeting. When we talk, we usually discuss many issues, but let’s focus on this one, all the more so since your poll shows that personnel is the main problem.

Sergei Borisov: It is the main problem! Funding comes next. Some of our branch unions have already started elaborating their educational standards…

Vladimir Putin: Then comes the demand.

Sergei Borisov: The demand is still influenced by the crisis.

Vladimir Putin: Well, probably, but not only. There are also problems that have to do with the protection of the domestic market. We should also think about that, albeit with caution.

Sergei Borisov: Regrettably, our big businesses do not yet award contracts to small businesses. There is no such tradition. We haven’t acquired a taste for it yet.

Vladimir Putin: But there are good examples, nonetheless. Whole clusters are taking shape not far from here, in the Moscow Region, where big companies are immediately surrounded by small- and medium-sized ones.

Sergei Borisov: Incidentally, the Moscow Region has the best business climate among the regions. I wanted to tell you that a bit later, but here we are.

Vladimir Putin: In terms of quality?

Sergei Borisov: Yes.

Vladimir Putin: I’m pleased to hear that.

Sergei Borisov: It is a surprise for us, but a pleasant surprise.