AN INTERVIEW. SIBERIA IS CLOSER NOW: THE AMERICAN BUSINESS CENTER WORKS IN NOVOSIBIRSK

James Whitman is the acting Director of the American Business Center-Novosibirsk , a business development center established by the US Department of Commerce.
Q. Please tell us about your business here in Siberia.

A. The American Business Center Program was set up by the US Department of Commerce in cooperation with the Russian Ministry of Foreign Economic Relations to promote business between Americans and Russians. We operate a center in the downtown of the city which serves as a base of operations for American business people, traveling to the area, and as a counselling center for Russian businesses. Fourteen ABC's have been set up by the Department of Commerce in major cities of the CIS.

Our mandate from the Department of Commerce is to increase American exports thus creating jobs for Americans - and helping to promote the growth of capitalism in Russia. The other side of that equation is our work with Russian business people, helping them structure or expand their businesses, finding American partners and purchasing American equipment and supplies as they grow. We provide services - from drivers and translators to market research - and stay behind management for our clients. In addition to serving the interests of both countries, the ABC program has other major strengths. Of the fourteen ABCs, nine are run by private organizations, under contract from Commerce. These so called "solo" ABCs bring the power of both government and business together in a fairly unique cooperative manner. For example, Science Application International, a large San Diego based technical consulting firm, operates our center in Novosibirsk and has both lengthy experience in Russia and broad business contacts in the US. This, combined with the vast resources and credibility of working with the US Government, allow the ABC to very effectively represent American business interests in Russia. Another unique characteristic of the program is that unlike many other government programs, it is structured to become self sustaining and continue to function after government funding ends. We believe that our impact will be great since the center will likely be here for years to come. While the program is still young, there has already been a lot of success bringing business people together and selling American products.

Q. What can others learn from your experience in Siberia?

A. For one thing, that it is possible to make business here! Many people in the US hold a poor image of Russia and an even worse image of Siberia. For most people, even the well educated, the only thing mention of Siberia conjures up is visions of frozen barren tundra and prison camps. Even in Moscow, business people have little understanding of the huge opportunities which exist here. Most of this lack of understanding is simply due to the fact that there has been so little information on Siberia available. That situation is changing and business people are venturing in to pursue opportunities and many of them are pleasantly surprised at the results. There is a huge consumer market here for Western branded goods, there are production plants waiting to be upgraded, and there are technologies and know-how here with immense commercial potential. I would encourage serious business people to take a look at Siberia, speak with experts and begin to think about how to establish a presence here.

Q. What are the greatest challenges to doing business in Siberia?

A. Because business is so new in Novosibirsk, much of the infrastructure has not been developed as yet. Telecommunications suffer poor quality, there is virtually no Western quality office space, and labor pool of well trained support staff is limited. These things, of course, interfere with achieving business goals, but are surmountable. We in ABC try to provide a range of services which fill these gaps and thus allow business people to concentrate on business and not logistics. On the other hand, the advantage of the city's small size is that getting around the city is easy, and what's very important - it is easier to learn if there are any problems with potential partners or customers. However, the single greatest challenge to doing business in general in Russia is overcoming communication barriers. Communication is incredibly difficult at every level, this starts at the most basic level of technical difficulties. Anyone who has ever tried to do any business with Russia can attest to the changed phone numbers, bad telephone lines, unresponsive fax machines and unresolved faxes. Language barriers represent another major communication challenge that needs to be carefully worked. Working through a translator is agonizing, and even an American with excellent Russian will miss certain cultural subtleties and is at a disadvantage of not communicating in his first language. The lack of a well established business culture and the invisible cultural differences of doing business in any crosscultural situation are major hurdles. Of course, persistence and creativity go a long way in overcoming these hurdles but it simply takes that much effort to get something done. My advice to both US and Russian companies is to pay a great deal of attention to communications, to use care in the means and the substance of communication, to confirm assumptions in writing and to be extremely patient with seeming lack of understanding.

Q. What do one have to beware of in Siberia?

A. Novosibirsk is nowhere as a high crime city as Moscow. Moscow has become, for a Westerner, perhaps as dangerous as an American city. In terms of physical and personal security, Novosibirsk remains a safe city. On the other hand, information security is less well protected. Even though it is a city of 1.8 million, Novosibirsk has a small town feel and it is often difficult to hold information closely. People seem to know everyone else's business and there are few secrets here. For a company entering the market we recommend either taking careful precautions to protect proprietary information or not basing their strategy on secrecy.

On a personal level, a major problem of working on business development in Russia is maintaining a balance between over- optimism and overpessimism. I look at 100's of proposals each month and to be perfectly honest, virtually all are unattractive on first review. They are either fatally flawed, poorly developed, unclearly expressed, or ill founded in business realities. However, a certain percentage have the germ of an idea that can be cultivated into a real business. The challenge is discerning that seed by reading through the inexperienced thinking and weak language which hides it. For me, this requires distancing myself from the critical analysis tools I learned in business school because when those tools are applied with their full force, not a single idea or proposal stands up. The danger however, is that when you put aside those hard analysis tools and look at proposals with a kinder eye, one can easily be swept up in over optimism that every proposal has some potential, which is clearly not the case. The challenge is maintaining a critical yet sympathetic perspective.

Q. How can one contact you to get more information?

A. We are always eager to offer our assistance to Americans interested in pursuing business in Siberia and helping Russian business people find American partners. We are located in the Hotel Sibir in Novosibirsk and have a large support office in McLean (Virginia). We can be reached at either of the coordinates below.

Thank you.

Hotel Sibir, Suite 731            1710 Goodridge Drive
Lenin ul. 21                      Mail Stop 1-6-8
6300   Novosibirsk                McLean Virginia 22102
phone: 7 (3832) 23-55-69          703-749-8978
fax :7 (3832) 23-57-62            703-448-5746
E-mail: abc@saic.nsk.su           E-mail: novo@cpva.saic.com