Russian Business Elite on the Rise

THIS POST WAS ORIGINALLY PUBLISHED MAY 22, 2007

Russian Business Elite on the Rise

The Russian government is actively developing the high-priority Education national project, and it seems that the Russian authorities are worried about the quality of new generation of businessmen. And it is true – according to the statistics data only three in every 100,000 Russians have an MBA, compared to 70 in the United States. Thus, as part of the Education national project two business schools had been commenced last year. Both projects are backed up by the government and the hopes are they will serve as the Russian equivalent of Insead and MIT.

The Skolkovo Moscow School of Management was launched September 21, 2006 and the Graduate School of Management of the Saint Petersburg State University on November 29, 2006. Both inauguration ceremonies (laying the ground bricks) were absolutely identical and attended by President Putin. It is easy to guess that each of the project is supported by the two (supposed to be) successors of the President – Dmitry Medvedyev and Sergey Ivanov.

Both schools seem to target the same goal, but the essential difference is that Skolkovo is built from scratch and is targeted to focus on developing markets, and the Graduate School of Management of the Saint Petersburg State University is based on the management department within the university. And of course the locations and sites are different – in Moscow the campus will be built from scratch in the suburb of the city, and in St.Petersburg at the restored Mikhailovskaya Dacha. The oligarchs that sponsor these two projects are different.

The other difference is that Skolkovo project is the product of deliberate planning by Ruben Vardanian, chairman and chief executive of Troika Dialog investment bank. Mr. Vardanian did an exceptionally tough job examining 18 world business schools and drafting the plan for his own effort. He has persuaded 12 Russian business oligarchs and two non-Russian investors each to stump up $5 million to finance the school, including Roman Abramovich. Aside from Abramovich, others include Rustam Tariko, the vodka and banking oligarch, steel magnate Alexei Mordashov, and Viktor Vekselberg. The list is really impressive, but equally impressive is the list of International Advisory Board that is headed by Dmitry Medvedev, the first Deputy Chairman of the Russian Government. And Patricia M. Cloherty, Chairman and CEO of Delta Private Equity Partners, LLC, manager of the U.S. Russia Investment Fund and Delta Russia Fund, L.P. is also there.

Here are the key highlights of Skolkovo Moscow School of Management:
- Construction of the school is expected to total $128 million, with another $100 million being spent into an endowment. An additional $32 million - miscellaneous costs, while the government has agreed to set aside 1.5 billion rubles for the school from its national projects budget. The campus will open in September 2009. The end of construction date is 2012.
- There would be four options: customized programs (oriented towards specific corporation); short-time open programs (for specific managers); full-time MBA and Еxecutive MBA. Full-time MBA is targeted towards managers aged 26-30 that already worked in business.
- There would be 10 Russian professors and 20 non-Russian professors along with 70-100 visiting faculty, largely from business schools in other emerging economies.
- The process will start with a small group of short-time program in 2007, and with a pilot 25- or 50 students enrolled on the 18-month full-time MBA in 2008.
- Being enrolled at Skolkovo will be the preserve of the few - it will take no more than 300 Russian and international students a year. On the average, the fee is supposed to be about $ 50,000
- A group of Russia's most famous oligarchs has agreed to lecture and teach a small number of classes drawing on their own life experience every year. Roman Abramovich is in the list.
- Students from other leading emerging markets such as India, China and Brazil will be encouraged to enroll, while the Russia-based students will take part in six-month exchange programs in these countries as part of the two-year MBA program.

Despite its infancy stage, the Skolkovo Moscow School had carried a number of events, the recent one being a meeting with Jack Welch, former CEO of General Electric with about 120 representatives of the Russian business elite in Moscow.

The St.Petersbug school of management is also active. However, they are still raising required $ 200 million.

These new developments are really encouraging and we all hope that very soon we will have a good and prestigious business schools rated worldwide.