Moscow – The Russian Union of Industrialists and Entrepreneurs (RUIE) Coordinating Council for combating the coronavirus outbreak yesterday hosted an online summit to discuss business after the pandemic. The event was moderated by Andrey Guryev, Co-Chair of the Coordinating Council and CEO of PhosAgro.
Mr Guryev discussed the possibility of a dramatic transformation in the structure, principles and processes for doing business following the coronavirus pandemic. Other speakers were Russian Post CEO Maxim Akimov; SIBUR CEO Dmitry Konov; AEON owner Roman Trotsenko; and A1 Managing Partner Andrei Elinson, who initiated the summit. Some 250 entrepreneurs, market experts and journalists attended the event.
In his opening remarks, Mr Guryev noted that there would be stark differences in the post-pandemic business environment compared with before the crisis. One important trend, he said, would be an increase in the number of people working remotely and with flexible schedules, while adding that offices would be vacated in a number of sectors.
According to Mr Guryev, the pandemic has shown that state-of-the-art IT infrastructure is capable of supporting remote workflows without a significant loss of efficiency. In general, he said, the trend for increased digitalisation that was developing even before the epidemic will now be given a strong additional impetus, as sales and interactions with both customers and counterparties move to online platforms.
Already, one of the most common topics of conversation outside Russia is the need to achieve self-sufficiency in terms of essential goods. Many will follow Russia’s example in this regard, said Mr Guryev. In recent years, Russia has been forced to implement import substitution programmes. Given border closures as a quarantine measure, this has enabled the country to become completely self-sufficient in terms of food. Clearly, PhosAgro’s CEO said, many states taught by bitter experience will reorient their efforts to protecting and supporting their domestic markets, to the detriment of economic cooperation.
Mr Akimov, CEO of Russian Post, agreed with Mr Guryev, saying that “the customary modus operandi is over, not only for the main sectors of the economy but also for life in society as a whole. What used to be our daily routine in business, in our interpersonal interactions, in the activities of practically every institution will have to be reinvented from scratch.
“The traditional answers to challenges and support measures taken by governments and heads of state around the world will be of little value in this new situation. We are at a point of uncertainty, and we are going to be figuring out answers to the questions we are facing for quite a long time”, said Mr Akimov.
He added that one of the key challenges is the breakdown in supply chains in the production of complex products. “Confusion on an inconceivable scale has arisen in terms of solving even the simplest tasks, and many of our European colleagues have already turned to us for help in the implementation of logistics routes.”
Mr Konov, SIBUR’s CEO, noted that the flip side of widespread digitalisation could be an increase in public fears about the protection of personal data and freedoms.
“In addition, the transition of the services sector online and the resulting slight reduction in services available could increase unemployment and lead to an exodus on the part of those in the workforce who came to work in Moscow and other megacities, who will return to the regions where they came from. This would be another distribution of the young and mobile part of the population”, said Mr Konov.
Mr Trotsenko, AEON’s owner, noted that, historically, pandemics have caused fundamental transformations in the structure of society, and he added that the coronavirus epidemic would be no different:
“There will be an increase in the cost of labour, and division of labour will become more profound; in terms of technology, there will be a ubiquitous transition to 5G and digital twin technology. In social terms, there will be a transition to individual self-employment, where individuals sell their knowledge, time and skills as elements of exchange in new ecosystems.”
He added that every pandemic has led to a change in world leadership. “In this case, we will see that our country will be, if not the leader, then one of the technological leaders in the post-covid era alongside China.”
Mr Guryev agreed that, after the pandemic, Russia would have every opportunity to integrate into the new economic reality and to deepen and expand its ties with China and Europe:
“Today, Russia is facing this crisis in a qualitatively different state than in the 1990s. We have a well-developed domestic market, a raw materials and energy sector, a digital industry, self-sufficiency in food, zero debt and huge gold and foreign exchange reserves. Russia has every opportunity to enter the new economic reality as an even stronger and more balanced player”, said Mr Guryev, adding that this would require large companies to coordinate their efforts with one another and with the authorities.
In this context, A1’s Managing Partner Mr Elinson proposed the creation of an additional mechanism for the exchange of experience in adapting business to new challenges.
“We suggest creating an online platform where leading companies can gather and share their experience in transforming companies and businesses. Such a resource would help everyone reach a new level of business relations and build new models of fair interaction as soon as possible”, said Mr Elinson.
Summing up the discussion, Mr Guryev noted that the future discussed by the participants of the online summit would depend on the steps that are being taken today: “It is important that the measures taken by the President and Government and coordination on the part of big business, in my opinion, greatly increase our chances of overcoming the crisis with the fewest possible losses.”