Text a russian entrepreneurship

The role of entrepreneurship is of interest to business people, politicians, college professors and students. While entrepreneurship research has focused on entrepreneurs and their businesses in the Western countries, the aspect of entrepreneurship in Russia has received limited attention. The dramatic changes that have occurred in the once controlled economy of Russia in the 1990s have raised many questions: Can entrepreneurship in Russia change the traditional state – dominated system with limited economic freedom and contribute to global market developments? What is the profile of Russian entrepreneurs? What is necessary to successfully carry out entrepreneurial activities in Russia?

Entrepreneurship as a social phenomenon reflects the basic conditions that foster the economic development as a result of human creativity, new ideas and innovations. There is a general agreement among the scholars that entrepreneurship facilitates economic freedom and economic creativity. Economic freedom makes available a certain amount of rights that guarantee independent decision – making in choosing the type and field of economic activity and methods of operation. Economic creativity results in the new businesses and jobs being created.

In the Soviet Union the phenomenon of Russian entrepreneurship was not emphasized primarily due to the following factors. First, from the point of view of economics, the state was the only employer legally capable to exploit economic freedom and creativity disregarding the illegal “shadow economy”. Second, the Communist Party monopolized responsibility for management development and economic transformations resulting in censorship of Russian economic history. Only in the late 1980s were a few books on management by Western authors finally translated into Russian.

Development of Russian entrepreneurship

In imperial Russia, the Soviet Union, and post Socialist Russia there was and still is a great amount of entrepreneurial potential. In the medieval Russian cities of Kiev and Novgorod not only did merchants and artisans have political power and wealth, but almost everyone above the lowest level of peasants was engaged in entrepreneurial activities. Entrepreneurs in the time of Peter the Great were traders who created Europe’s strongest military – industrial complex for imperial Russia. Only the Industrial Revolution (which started in Russia half a century later than it started in England) brought the real spirit of private entrepreneurship to Russia. In the late nineteenth and early twentieth centuries talented businessmen like S. Morozov were successful entrepreneurs in Russia. P.Stolypin and S.Witte were bright members of government who initiated economic reforms. After the Revolution, except for a short period of NEP, most entrepreneurial activities were destroyed. A transformation of the labor market and its monopolization occurred. The state was the only recognized legal employer and they did not provide the environment for entrepreneurship.

The reforms of N.Khruschov and A.Kosygin started a new wave of economists, such as L.Abalkin and Ye.Gaidar who tried to foster the role of entrepreneurship in economic development of the country. However, the Communist Party still was the dominant depersonified entrepreneur that were responsible for the economic education. In the Soviet economy, the overwhelming majority of its resources and industrial areas, such as construction, mining, trade, and power engineering were under the control of a small group of monopolistic coalitions. During the mid-1980s, in the Soviet Union, there were two main retail networks, one airline company, one oil extraction ministerial monopoly, and nine ministerial firms in defense industries.

In 1987, after the official acceptance of the need for economic changes, there was an unprecedented growth of business activities in the form of cooperatives, individual labor activity, and joint ventures with foreign capital. The absence of modern business practices resulted in the total breakdown of traditional economic ties. Bankers appeared as super entrepreneurs due to their role in economic development. Economic creativity was reflected in the new business being created either in start – ups or within large – scale amalgamations. New business associations were facilitated by: (1) former political structures organized by former party and Comsomol leaders; (2) government business alliances, such as the Ministry of Foreign Economic Relations; and (3) independent leaders, such as V.Bryntsalov, who proved their talents with sky – rocketing profits. After the adoption of the laws on cooperation, individual labor activity, and enterprise by the Parliament in the early 1990s, the concept of dominating form of ownership was changed. Even foreign businesses were able to participate in privatization. For the first time since 1917, private property was officially recognized. The privatization process resulted in thousands enterprises being privatized. Many shareholders appeared in Russia and thousands of enterprises with foreign capital were created. The 1990s gave birth to many successful entrepreneurs. One visible difference was the success – orientation and source of profits of the main two groups of entrepreneurs – whether in the short or long term. The first group (speculative entrepreneurs) tended to make profits from financial operations, weaknesses in the legislation and taxation system, or by adding value by trade operations. The country’s frantic privatization created a class of politically connected bankers and business people who got rich buying assets on the cheap. The second group (pragmatic entrepreneurs) worked hard to create the industrial base for business development and struggle against huge state bureaucracy while developing healthy ethical standards.

After seventy years under the communist rule and five years of economic reforms, Russia was joining the modern world. Inflation was down, the ruble strong. At long last, Russia was stable. The West’s leading financial institutions could bank on its potential. They threw themselves at the Russian leading companies. Companies like Gasprom, Lukoil found their shares trading on American stock exchange. By December 1997 the Russian stock market was the best performing emerging market in the world.

Then, on August 17 1998 the Russian government made a stunning decision to devalue its currency and default on its domestic debt. None of the emerging markets imploded with the mind – boggling speed and force of Russia. The 1996-to-1998 window in Russia will be viewed as one of history’s great bubbles.

One of the tragedies of the collapse in Russia was that many companies that did attract foreign capital for the right reasons – they had been privatized and restructured and were run typically by new managers under the age of 40 – were buried. About 50% of small businesses that did not attract foreign capital also collapsed. The country is still paralyzed by what has come to be known as managements crisis. The vast majority of companies in Russia either do not pay their bills or pay them with barter. Some do so to avoid the punitive tax rates that still exists in Russia – but most do it for a different reason: it is the only way to keep operating.

Match a line in A with a line in B (as in the text).

A	B
1. dramatic 2. state – dominated 3. entrepreneurial 4. private 5. labor 6. monopolistic 7. defense 8. unprecedented 9. joint 10. sky-rocketing	a) market b) ventures c) changes d) profits e) system f) growth g) entrepreneurship h) potential i) industries j) coalitions

Try to remember the following word combinations.

dumping	legislation	законы по борьбе с демпингом
labor		трудовое законодательство
proposed		предложенный законопроект
collective	ownership	совместное владение
communal		общественная собственность
share		владение акциями
private		частная собственность
acceptable	condition(s)	приемлемые условия
market		состояние рынка
living		жизненные условия
operating		режим работы

Suggest word combinations with each of the following terms using the dictionary: rate, enterprise, property, company, market.

Match the definitions.

1. profile 2. innovation 3. right 4. transformation 5. private 6. trade 7. coalition 8. breakdown 9. asset 10. inflation

a) complete change in form, appearance or nature b) a sudden failure in operation c) the business of buying and selling d) a short description of a person’s life and character e) the introduction of something new f) rising of prices to an undesirable degree g) morally just or lawful claim h) not shared with everyone in general i) something that has value and may be sold to pay a debt j) a union of political parties for a special purpose

Match the words which have an opposite meaning from A and B.

A: to reflect, to result in, to facilitate, illegal, wealth, acceptance, within, private, difference, weakness, stable.

B: lawful, outside, shaky, to result from, strength, poverty, similarity, to absorb, to make different, public, rejection.

Match up the words which have a similar meaning from A and B.

A: to focus, to occur, to foster, aspect, to facilitate, amount, field , primarily, within, concept, to participate, overwhelming .

B: branch, inside, quantity, very large, mainly, to concentrate, to encourage, understanding, to take place, idea, to take part, to help.

Find the Russian equivalents to the following English words and word combinations.

1. social phenomenon 2. basic conditions 3. the point of view 4. be engaged in sth 5. except for 6. power engineering 7. oil extraction 8. shareholders 9. short term 10. speculative 11. domestic debt 12. punitive tax rate

a) акционеры b) теоретический c) если не считать d) общественное явление e) энергетика f) основные условия g) карательные налоговые ставки h) добыча нефти i) точка зрения j) внутренний долг k) краткосрочный l) заниматься чем-либо

Give the Russian equivalents to the following.

To be of interest, to receive limited attention, the once controlled economy, to raise questions, due to, in the late 1980s, a great amount, to initiate economic reforms, environment for the entrepreneurship, overwhelming majority, breakdown of traditional economic ties, to buy on the cheap, at long last, to bank on one’s potential, owner’s personal savings, to be on the edge of sth, full- fledged market- based economy, historic heritage, reliable business laws, in search of the best strategy.