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. Last Updated: 07/27/2016

The Business of Diplomacy

Everyone has focused on the historic meeting of Presidents Dmitry Medvedev and Barack Obama and on what many hope is the beginning of a renewed relationship between Russia and the United States. It is a good time for those of us outside government to consider what we can do to help cultivate this relationship. The fact is that the fate of our future relationship does not lie in the hands of government leaders alone. Business can play a very important role in building and strengthening the ties between us.  

Today, there are enormous opportunities for collaboration between Russian and multinational corporations. Such opportunities are not limited to projects involving the rich natural resources that Russia possesses, but encompass its plentiful “human resources” of talent and ingenuity. Tapping these resources by leveraging the talent and entrepreneurial capital that flourishes in the country is an opportunity to engage in a form of private-sector diplomacy, which facilitates growth in both our economies. In the wake of this week’s summit, there are four areas in particular where we can and should work together to achieve this objective.

1. Planting the seeds of technological growth. Russia has a large and growing pool of engineers and computer scientists who have the potential to dramatically influence the way the world uses technology, while at the same time diversifying the country’s economy.

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The Russian government should be applauded for setting up special economic zones, which it hopes will become mini-Silicon Valleys. It was also a smart decision to endow Rusnano with enough capital to lead public-private partnerships in the high-tech sector.

U.S. businesses can support the effort by lending expertise and channeling Russia’s rich pool of talent. For instance, Microsoft recently announced a $300 million program to establish innovation centers, teach computer literacy skills in schools and provide free software to startup companies in the country. The company believes that Russia can be a global center for innovation and growth.

Similarly, the firm I lead sees Russia as a future hotbed of technological innovation, and today we are investing the necessary resources to help make this vision a reality. We recently announced the opening of a Center for Technology and Innovation, which will provide research on emerging technology trends and help facilitate the exchange of talent between Russia and the United States, enabling both our economies to benefit from a rich pool of collective talent.

2. Creating opportunities for tomorrow’s leaders. Russia has declared 2009 the  “Year of the Youth.” The move is a reflection of the enormous potential the government sees in its young people, and youth-empowerment must be a continuous priority.

Through its national education project and the national priority project on health, the government is taking important steps to build the country’s future leaders. U.S. businesses can join the effort by creating greater opportunities for these future leaders. By continuing to invest in Russia and establishing operations on the ground, multinationals can expand opportunities for the nation’s youth. Doing so is not only integral to Russia’s economic growth, but also to our ability as corporations to operate effectively in a global economy.  

3. Cultivating small and medium-sized enterprises. In the United States, small businesses are a vital driver of economic growth. Similarly, in Russia a vibrant SME sector can be a powerful engine for growth. Today, there is an enormous untapped opportunity to help cultivate this sector, as less than 20 percent of Russia’s gross domestic product and approximately 25 percent of jobs come from SMEs.  

Developing this sector is a means not only of diversifying and growing the economy, but also of cultivating the talents of the Russian people while driving innovation across all sectors. At the national and local levels, government has introduced measures to help stimulate SME growth. For instance, cities are establishing entrepreneurship training programs and SME support programs. And in April, Prime Minister Vladimir Putin introduced a package of SME support measures, including lending guarantees in the country’s regions, support for startups through microfinance credits, and other measures, such as reduced electricity tariffs and simplified tax forms.

These are important steps, and the private sector should follow this lead. Multinational corporations — many of which rely on the support and solutions of small businesses at various touch points throughout the supply chain — can and should make the investments to help foster the growth of Russia’s SME sector.

4. Paving the way to a renewable Russia. Russia is well-known for its vast reserves of oil and natural gas, but often overlooked is the nation’s potential to lead in the sphere of renewable energy as well. In the last 10 years, the country has become 20 percent more energy efficient. Globally, Russia is a leader in large-scale hydropower, which accounts for about 10 percent of electricity generation. Its size and topography positions it to be a natural leader in wind, biomass and solar energy, too.

With the right incentives and regulatory frameworks, the government can help Russia realize this incredible potential. By sharing expertise and providing the necessary investment, U.S. companies can collaborate in working toward this goal. In an age when access to energy is an increasing concern, this would be a win-win for both our economies and help secure a strong, mutually beneficial U.S.-Russian relationship.

 Dennis Nally is global chairman of PricewaterhouseCoopers.