Entrepreneurship in Russia: Western Ideas in Russian Translation Oksana Shmulyar Gréen Gothenburg Studies in Sociology No University of Gothenburg © 2009 Oksana Shmulyar Gréen Entrepreneurship in Russia: Western ideas in Russian translation Oksana Shmulyar Gréen ISBN: 978-91-975405-5-1 ISSN: 1650-4313 http://hdl.handle.net/2077/21128 Printed at Geson Hylte Tryck, Gothenburg 2009 Cover by Gunnar Linn Layout by Nina Romanus This dissertation is included as number 40 in the series Gothenburg Studies in Sociology, Department of Sociology, University of Gothenburg Abstract Title: Entrepreneurship in Russia: Western ideas in Russian translation Written in English, pages Author: Oksana Shmulyar Gréen Doctoral Dissertation at the Department of Sociology, University of Gothenburg Box , SE- , Göteborg, Sweden ISBN: ---- ISSN: - http://hdl.handle.net// Gothenburg e aim of this thesis is to outline, both historically and in our own time, the development of entrepreneurship in Russia, a country where the very existence of the phenomenon has for a long period of time been either denied or confined to the margins of illegality and semi- legality. e primary focus of this work is on the emergence of a new generation of entrepreneurs that came to thrive in the s, the most turbulent but also the most promising years of Russia’s economic, po- litical, and social transformation. eoretically, the thesis is based on both current research on entre- preneurship in Russia and abroad and classical theories on entrepre- neurship crosscutting economics, sociology, anthropology, and history. Methodologically, the work relies on empirical observation conducted during periods of fieldwork in the St. Petersburg, Russia, supplement- ed by a broader qualitative analysis of documentary sources such as official statistics, mass media, and other circulars and publications, in addition to existing scholarly literature on the subject. One specific case, Western business education in Russia, was selected for a closer study to provide a better picture of the development of new entrepre- neurship, in particular independent entrepreneurship in the Russia of the s. Given the primary focus of the work, special attention is given to the country’s transformation processes in the s, and their relation to broader issues involving the development of capitalism, the role of the middle classes, gender and networks, and Western influence on economic and social developments in Russia throughout history. e study summarises and critically evaluates the existing body of knowl- edge in these areas while adding new data and hypotheses to improve our understanding of the subject. First, the thesis challenges the widespread belief about the absence of entrepreneurship in Russia prior the economic changes of the s. e various meanings of the concept of entrepreneurship are defined in different historical contexts, with the pre-revolutionary, the Soviet, and the post-Soviet Russian economy and society serving as significant landmarks in a continuum helping us to better understand the oppor- tunities and constrains within which the contemporary Russian entre- preneurs have to operate. Two major historical continuities are ana- lysed: the close relationship between entrepreneurship and the Russian state, and the significant overlap between the social categories of the entrepreneurs and the middle classes. e phenomenon of entrepre- neurship in Russia is further examined as a creative response to the new opportunities opened up in a society undergoing change. us, although the new entrepreneurship in Russia evolved from within the collapsing communist system, it was also born out of great expecta- tions and efforts, originating in the East and West alike, for a new society, a new type of economy, and new opportunities in life. irdly, the thesis extends the analysis of contemporary Russian entrepreneur- ship beyond its three commonly identified origins in the Soviet second economy, the Soviet cooperative movement, and the Soviet state and ministries. e forth origin for entrepreneurial initiative was the new private business sector that became professionalised in aftermath of the economic crisis. e study looks at Western business educa- tion as one of the major channels for the recruitment and training of a new generation of entrepreneurs in Russia and one of the key mecha- nisms of influence and interaction between Russia and the West from the early s onward. e argument is then developed that Western notions of capitalism, business, and entrepreneurship, instead of rep- licating the original patterns of development they reflect and refer to, produced considerably more varied results when intersecting with local conditions and the country’s historical legacies. On the one hand, the ideas they represented had to be “translated” to better suit the Russia realities; on the other hand, they lent themselves to the creation of an alternative source of authority among Russia’s new entrepreneurs, showing a potential to influence their business practices and business ideology in general. Keywords: Russia, entrepreneurship, capitalist development, Western business education, Russian merchants, Soviet managers, middle classes, networks We shall never cease from exploration And the end of all our exploring Will be to arrive where we started And know the place for the first time. T.S. Eliot To my families in Sweden and Ukraine Acknowledgments Finalising this thesis, I am looking back at the last ten years, during which many people have provided invaluable support and encourage- ment helping me to bring my work to a closure. I would like to express my deepest gratitude to all of them, even when not everyone involved can be mentioned here. First of all, I want to thank the Department of Sociology at the University of Gothenburg, which has been my host and my employer for a number of years by now. I owe most to my disserta- tion supervisor, Per Månson, who has always listened, understood, and promoted my initiatives with wisdom and care. A true mentor, he has inspired my research interest in Russia, always ready to learn from what I have learned. My deepest thanks to you, Per! I am especially grateful to Lennart Svensson and Abby Peterson, who read the original manuscript and provided constructive commentary and criticism. ank you for your encouragement and faith in the future of my work. ere are many other colleagues at the Sociology Department and at the Department of Political Science to whom I would like to extend my gratitude for their helpful comments on my ongoing work, for their support and in- spiration, for the many interesting discussions we have had, and for the curiosity with which they have responded to what I am doing. My special thanks go to Timo Lyyra, my English language editor, for his meticulous reworking of the original manuscript, for his patience and intelligence, as well as his warm encouragement of my individual style of writing. For the latter I shall always be indebted to my inspiring teachers and supervisors in sociology, Sergej Makeev and Claire Wallace. I am particularly indebted to researchers whom I met in Russia, Anna Temkina, Elena Zravomyslova, Oleg Kharkhordin, Olga Zdravo- myslova, Vadim Mezhuev, Vadim Radaev and many others. eir input and insights have been invaluable to the development of my own think- ing, especially during the initial stage of this thesis. I am most grateful to all my respondents in the city of St. Petersburg, who agreed to be in- terviewed and generously shared their personal experiences on Western business education, entrepreneurship, and life in general. anks go also to the staff of the Western business school in St.Petersburg who kindly allowed me to do observations and interviews on their premises. I owe a special gratitude to the family of Pavlovyh-Fedorovyh in St. Petersburg, who always received me as a family member and allowed me a privileged access to everyday life in today’s Russia. Several centres and institutions have supported my research with grants and scholarships. I would like to acknowledge the valuable support of the Swedish Institute, the University of Gothenburg, Swedish Research Council, and e Axel and Margaret Ax:son Johnsson Foundation for their assistance in enabling my fieldwork in Russia and my participation in several international conferences and seminars. I extend my special thanks to my colleagues at CERGU, the former CREES and European Studies Programme for their helpfulness and active collaboration around joint research and teaching projects that in many ways inspired me to pursue the research on the issues related to my dissertation, as witnessed by several publications coming out along the way. is work would not have been possible without dear friends who in various ways contributed to the emergence of the final product. My special thanks to Liudmila Sharipova for being a true friend and an insightful reader of several chapters of this thesis. I am also sincerely grateful to Gunnar Linn for designing an imaginative cover for the manuscript. Warm thanks go to Nina Romanus for putting her crea- tive hands on the manuscript layout. I am grateful to Andrea Spehar who has been my sincere friend and colleague during all these years. Many other friends outside the academic world have been of enor- mous help in sustaining my motivation and lifting my spirits during these long years: thank you Liuda, Olena, Jenny, Marie, Sabina, Karin, and Helena, all your families included, for being good companions, caring friends, and inspiring individuals. My large family in Ukraine has always been an indispensable source of love, support, and encouragement without which I would have nev- er been able to reach this point in my life. ank you for the spirit of “never giving up despite difficulties.” I learnt it from you! I am infinitely grateful to another family of mine: my husband Magnus and our daughters Veronika and Anna. You have been not only a steady anchor in my life, but also an inexhaustible source of energy, joy, love, and motivation.