Way to Russia Talk Lounge

CruisingRam

I have been trying to do some trade with my family in Kazan- let us just say it is in manufacturing, and it takes a skilled person, about engineer level, of machinst for what I want done. However- it does not take alot of equipment, and the runs of product needs to be quite small.

Let us say, for sake of argument- that I have no problem with bribes and such getting the finished product out of Russia= I just don't wish to dwell on that aspect in this question.

I have thought of brining a small CNC mill to my family in Russia for them to do the manufacturing, one Dudulya having the skill neccesary to do this- but he is quite old.

As I researched this topic- I found something truly lacking in the Russian economy and perhaps one of the great reasons we have such a much better economy here, despite pretty bad corruption and regulations here in the US, in fact, as I did my research trying to start this business- the US actually adds more in production costs through taxes and "regulation" (not wanting to debate the neccesity of this regulation now- no hijacking! Laughing

)

But what I noticed it the total lack of small business beyond the street seller of various local commodities.

I don't need an entire auto factory to make my product- I need about 10 guys at full capacity at the equivilent of an American automotive full service machine shop.

But this just doesn't exist!

I know why- because someone will steal the business!

But, what do you think can be done to encourage small scale manufacturing in Russia?

In America- despite all the talk about corporations- corporations ARE THE MINORITY in our economy- with businesses under 50 poeple making trillions of dollars!

Here is some info and background:

From a two-person software start-up to a fleet of trucks helping to build cities, the small-business sector catalyzes economic expansion by:

making up 99.7 percent of all U.S. employers, meaning that only 17,000 companies, or 0.3 percent of all employers, have 500 or more employees;

generating half the nonfarm output of the U.S. economy, and employing about half of all Americans not working for government, while adding 60 to 80 percent of net new (nongovernmental) jobs annually;

comprising 97 percent of exporters and producing 29 percent of all export value—key points when we consider that exports have accounted for about 25 percent of U.S. economic growth over the past decade and support an estimated 12 million jobs;

winning nearly 24 percent of all government contracts, ranging from ship construction to printing brochures.

Small businesses are often the beginnings of large ones, as we are reminded by the 30th anniversary of Apple Computer, which was founded in 1976 by three members of the Homebrew Computer Club. Yet not all of America's 23 million small businesses aspire to the Fortune 500. There are companies—such as the brewer Anchor Steam—that realize that profits can come from resisting the temptation to expand. Their contribution to the economy is to offer niche products and services not offered by big corporations—and often to charge more for such specialization. It is the diversity as well as the dynamism of an economy that assures a continually upward path.

IF I could find a small business in kazan that specializes in rebuilding car engines for instance- I could have a very, very lucrative business selling the stuff I want made for the US and Euro markets.

But that doesn't exist!

overseas_expat · VIP Joined: 11 Jan 2005 Posts: 620 Location: Moscow

So ummm, what's your question?

CruisingRam · Posted: Mon Feb 27, 2006 6:37 pm Post subject:

But, what do you think can be done to encourage small scale manufacturing in Russia?

JamesB · Frequent Guest Joined: 25 Apr 2006 Posts: 20

CruisingRam,
Obviously, the business climate needs to improve more. Even after 10 years of market reforms, the rewards of investing in Russia still does not seem to justify the risks. What are the best ways to encourage entrepreneurs? Is the Russian govt. taking the appropriate steps?

PS. Since you're into manufacturering engines, could you make use of the Sonex technology? See http://www.washingtonfreepress.org/73/gasEngineUseDiesel.htm

Xela · VIP Joined: 06 Jul 2005 Posts: 781 Location: Shanghai

Until Russia starts to use means other than natural resources for their economy's backbone (and curb corruption too), you can kiss goodbye to any hopes of substancial reform with regards to small business start-up.

Like it or not, this is fact.

That link on the engine was interesting, and I've seen prototypes for diesel engines which can really perform, but it still remains; nothing will beat a combustion engine.