Students Profit From Experience in Business

At School No. 7 in southern Moscow, Viktor Lebedev decided to spice up the lives of his schoolmates.


The smooth-talking 16-year-old brought the profitable world of Moscow nightlife to his school by setting up D.J.7, a company that sells colorful tickets, T-shirts and earrings to promote teenage disco parties.


"Our friends were wondering how they could have a good time [at discos] using professional equipment," said the young entrepreneur. "Now the guys who did the Michael Jackson concert provide us with our sound system."


In addition to attracting the attention of top Moscow nightclubs like Titanic, Lebedev and his seven teenage partners took top prize for the best promotional product at last week's Junior Achievement trade fair, where 160 students representing 30 school companies from 19 Russian regions displayed products and services.


Founded in the United States 78 years ago, Junior Achievement has grown into a global organization of corporate sponsors, business volunteers and students that aims to encourage market instincts in schoolchildren by conducting educational programs in more than 90 countries.


Since its inception in December 1991, Junior Achievement in Russia has been bringing free-market economics to classrooms, educating more than 400,000 students from St. Petersburg to Sakhalin. It took Americans 30 years to educate that same number of young entrepreneurs, Junior Achievement officials said.


"Russia has extraordinary talent in its young people and all we're doing is waking up their imagination and energy," said Sam Taylor, chief of Junior Achievement International, who was in Moscow last week to celebrate his organization's fifth anniversary in Russia.


The young people in the newly independent countries of the former Soviet Union are getting their first hands-on experience with free enterprise, learning everything from capital flow, cost benefits and profit margin to the role of government. This experience will in turn help create a civilized generation of entrepreneurs, Taylor said.


"I'm very optimistic about the young people in Russia," said Taylor. "There have been some very creative ideas here with services and products."


The trade fair that allowed the students to sell their products -- ranging from hand-made crafts to furniture and computer games -- for the first time attracted student entrepreneurs from as far away as the Primorsky Krai in the Far East to Vladikavkaz in the Caucasus. They came smiling, laughing and using all the proper sales techniques Westerners would be proud of.


A group of Ossetians took the revenue they generated from manufacturing hand-made aprons and donated half of it to charity and used the other half to buy train tickets for five students to make the two-day trip to Moscow.


"The enthusiasm of the kids is just beyond description," said George MacDonald, general manager of Exxon Ventures' Moscow office, which helped sponsor the Junior Achievement event. "They're taking pride in their work. They understand intuitively the concept of marketing their products."


Most of the students at the trade fair last week said they learned about Junior Achievement through its 35 regional offices or their city's local administration. Their student companies are a part of economics courses being taught in Russian schools that give students experience in running a company. With the help of volunteers from the business community, Junior Achievement helps the students learn how to organize their businesses, do market research, manufacture and sell their product and keep proper financial records.


Exxon, McDonald's, Relcom and Stolichny Savings Bank and other multinational corporations, as well as the U.S. Agency for International Development, have helped finance the nonprofit educational program's activities in Russia.


Last year, Junior Achievement organized an international competition at Northwood University, Michigan, in which 10 Russian teams from Moscow and Perm were pitted against 47 teams from four other countries to see who could make the most money on a computer game. Russian teams took the top four prizes.


"It's taken capitalist countries 300 years to build a market economy, so you can't expect the Russians to do it in four or five years," Taylor said. "We have to build up the young people to show how a market economy works, and then we'll see incredible results."


Taylor said that when Junior Achievement began researching the Russian market in 1989, it met resistance from local officials who said the program could never work in Russia because people weren't free to start their own businesses. Then, Taylor said, he met then-Soviet president Mikhail Gorbachev, who supported the idea. Later, he received an endorsement from President Boris Yeltsin.


"We're giving kids a choice," Taylor said. "It's the most cost effective way to educate millions of people."


Students from Novokuznetsk, a devastated Siberian mining town well known for its wage delays and chronic unemployment, began a company called Noviye Russkiye that manufactures bar shelves that are sold for 850,000 rubles each -- to those who have the money to drink in style.


"We wanted to create this to put our knowledge into practice," said 10th-grader Tatyana Posiva, one of six students displaying the item, which won Junior Achievement's "best product" prize. "We consulted with two [professional carpenters] who we paid, and then made a price list and did advertising. We determined who would buy this after we did marketing research to ask people what they wanted."


Another group of students in a theater troupe from Saratov got a lesson in stockholding and trading. Theater Krosh, a touring troupe with 16 student performers and nine technicians, made a hefty 60 percent profit for holders of stock it issued, most of which was bought by the students themselves.


One performance during the New Year's holiday netted the company 800,000 rubles after the students performed in the homes of residents, who paid a fee for each visit by the troupe, complete with singing, dancing and little gifts for the children. The troupe spread word of their activities by videotaping their performances and selling the cassettes to audience members.


The students receive a monthly 30,000 ruble salary and reinvest their dividends to ensure that their future performances attract even more capital, said Sergei Samoulov, an economics teacher and the group's adviser.


"They should know how to do things like calculate taxes," he said. "They're learning about what to do in the future."