Russia's Most Talented

The weather in Philadelphia is gray, but inside Vane Hall, deans, admissions officers and faculty are basking in the warm glow of good news: Business Week's just-released biennial report card has ranked the University of Pennsylvania's Wharton School No. 1 among the nation's business schools. The report is plastered on the most visible bulletin board of the building. A box with hundreds of reprints stands in the hallway for the benefit of visitors.


We were invited to Wharton by Volodya, a first-year MBA student who graduated from the small business school that we operate in Moscow. During our visit, we talk to Wharton faculty and staff during the day, and then meet in the evening with Volodya and three of his friends: Pyotr, another first-year student, also from Moscow; Igor, a second-year student from Irkutsk; and Alexander, another second-year student, from Kiev.


What is the Wharton experience like, we ask? Hard work, they all agree, harder than they had expected. But they aren't complaining that the program is hard: They are boasting that it is hard. These four are well prepared. Their English is good, and their training in quantitative skills is no doubt envied by many of their fellow students. "My exam tomorrow is nothing difficult, just linear programming," explains Volodya. Linear programming, after all, was invented by a Russian.


Wharton prides itself on a diverse student body, fully one third of whom are from abroad. The admissions officer with whom we spoke seemed pleased with the Russian students they had admitted. But Russia is under-represented at Wharton, he pointed out, with just ten applicants last year, compared with 133 from China, 118 from Mexico, and no fewer than 255 from India.


We wondered: Is Russia moving fast enough to join the new global economy? Some of Wharton's faculty and students, it seems, have their doubts. The school has risen to first place in the rankings in part on the basis of an innovative new curriculum. One of its elements is a global immersion program that gives every student a chance to have an intensive hands-on experience abroad. Last year one of the global immersion groups went to Russia.


Members of the group met with business executives, talked to embassy representatives and walked the streets to see for themselves how things stood. They heard lots of stories of crime, corruption and a tax system that defies compliance even by the willing. Their impression, that Russia does not yet have an entirely normal business climate, was reinforced by some unfortunate brushes with street crime. The upshot is that Wharton will not send a group to Russia this year -- not enough students want to go. Meanwhile, the program's China group is so heavily oversubscribed that it will have to be split into two, or even three, separate sections.


If the Americans are not eager to send over 747-loads of MBAs to pull Russia into the global economy, who is going to do the job? Clearly, one of the hopes is that Volodya, Peter, and Igor will do so, while their friend Alexander does the same for his native Ukraine. But will they fulfill that hope? This theme keeps recurring in our conversation.


All four say they expect to return home after graduation. Yet their loyalties seem less than unconditional. Whether they will go back to stay is as likely to turn on pragmatic considerations as on emotional attachment.


On the positive side, there are a growing number of good job opportunities in Russia for energetic young people with an international education. American firms are recruiting analysts for their Moscow offices, and Russian financial institutions need qualified staff to manage East-West capital flows. Entry-level pay for such positions is steadily moving toward world levels and promotions are likely to come faster than elsewhere.


But there are reasons not to go home, as well. Schools like Wharton are doing their job so well that their Russian graduates are equally attractive applicants for jobs in the New York, London or Bahamas offices of the same banks and consulting firms that they might work for in Moscow. They won't have to go home just because that is their only alternative.


More disturbing is their realization that Wharton skills are not a perfect match with what they will need to do business in Russia. Their business ethics courses are irrelevant when it comes to dealing with corrupt officials. Their risk management models do not teach optimal methods for evaluating offers of competing protection rackets. Their lessons in teamwork, despite the school's efforts at cross-cultural understanding, seem naively American and, at the same time, uncomfortably reminiscent of old-style Soviet collectivism.


Igor comments that his friends in Siberia didn't quite understand what he is doing in Philadelphia. There are fantastic opportunities to make money in Russia right now, they write, no MBA required. There has emerged a specifically Russian capitalism that is thriving on the very fact that it is not well integrated with the global economy -- a capitalism where monopolies are not threatened by global competition and where price distortions offer huge profits to the firm that can bribe the right customs officer to move goods in or out of the country.


But we are encouraged that our classes in Moscow are full of more Volodyas and Igors, as well as an increasing number of Katyas and Tatyanas. We hope to see -- and on our optimistic days, we do see -- the development of a Russian business environment that can hold on to the country's enormous resources of talent. It would be sad to see Russia left standing on the platform as China, India and Mexico pull out of the station aboard the 21st Century Global Economy Limited.





Edwin G. Dolan operates the American Institute of Business and Economics in Moscow. He contributed this comment to The Moscow Times.