Social Enterprise in Russia – Week 2 - Rybinsk

Victor, my interpreter Anna, and I, have driven hundreds of miles through the Russian countryside, between Rybinsk, Vyshniy Volochek and Ostashkov. The countryside in this part of central Russia is mainly silver birch forest, but you pass also many clearings - very occasionally cultivated fields, but mainly wildflower meadows. These are very beautiful to look at, though not so nice at this time of year to actually be in – like most usually cold places the sudden summer heat teams with insects. Little of the land is used except for haymaking and gathering wild food – babooshkas sit patiently by the roadside selling mushrooms, blackberries, and what not. The climate simply won't support most agriculture - even pasture animals are hard to keep. When you get up close the grass is thin and scrubby, the land is covered in snow for 5 or 6 months of the year, and the summer is suddenly very hot

Even more occasionally you pass untidy villages – clusters of little wooden dachas with beautifully carved and fretted windows, usually just off the road. Often, some of the dachas are abandoned – indeed some whole villages are abandoned – another reason for the lack of agriculture and the return of formerly cultivated fields to meadows. Russia's population is shrinking by about a million a year, and with Moscow and a few other cities growing like topsy the countryside seems to be emptying fast. I was puzzled at first by the reaction of those Russians who find out I have 4 children, but soon discovered that it is normal for families to have just one child here, and 3 children makes you officially a Big Family (of which more below).

Maybe someday someone will discover a bio-fuel crop that will grow on these vast tracts of northern Eurasia, and the countryside will spring back to life. I can't help there; I have at last though met some real - successful - social enterprises. The most interesting are in Rybinsk. Here, Gennadiy Savin with his son, Ilya, run an organisation that contracts with the local authority to provide a whole range of services to vulnerable children. This is a 30 million rouble business, with 8 departments spread across 4 buildings, and employing over 200 staff. They run a residential unit, place children with foster families, provide medical and counselling support for street children and for children and families with learning or behavioural problems such as autism. Unfortunately they are, as far as they know, unique in central Russia, though they do know of a similar organisation out in Siberia. In our discussion they at first though it impossible to replicate their model – the local authority contracts were just too dependent on personal contacts and hard-won trust – but I think we argued them round at least as far as getting Gennadiy to both present his own 'case study' and run a session on local authority contracting at the 3-day workshop we are running here in October, on the basis that yes, you need some personal qualities to build the contacts and win trust, but for a person with the right basic aptitudes the skills of understanding how local authorities work, presenting the argument and carrying through a contract negotiation can be taught.

I would also like Tatyana Andryevna to present her case study. Tatyana manages the Upper Volga trading subsidiary of the All Russia Society of Blind People. This Society was established in the 1920s soon after the Revolution and Civil War. After the Second World War, to help rehabilitate the thousands of disabled soldiers, it established 180 workshops across Russia, of which about 150 still remain. Following the collapse of the soviet system in the 1990s the All Russia Society became an NGO, and the workshops became separate subsidiary trading companies. The Upper Volga workshop in Rybinsk, like many others, has been established since 1944, mainly making electric cables and fittings, and before the massive restructure of the whole economy in the 1990s employed about 600 people, half of them with visual impairment. Suddenly, over the mid 1990s about 90% of its customers went out of business, and the workshop had to quickly shrink down to its present size of about 80 staff. Business is hard – they simply cannot compete on any volume contract with the completely automated Chinese cable manufacturers. They are exploring a whole range of very interesting other products. Their old electric plug moulding machines can make any kind of small plastic moulded parts in short runs – they were making snow-scooter parts when I was there - and they have an excellent environment-friendly brush made from tree bark that I know would be in demand if they could get it re-designed for the correct market and properly branded. It really would sell in western Europe in green shops, or a chain like the Body Shop, or, indeed, Oxfam shops! But they simply don't have the marketing expertise, knowledge of exporting, language or contacts, or the basic vision of branding – designing a product and it's image around a market niche – to actually pull this off. Helping them work this out is a project not for me – marketing is not my thing – but if any social enterprise marketing person is reading this and might be able to help – and fancies a few days or weeks out in the Russian sticks - do get in touch - geof@geofcox.info.
One of Pavel Gavrilova's CatsOne of Pavel Gavrilova's Cats

Last but not least in Rybinsk I met Sergey Postnikov and Liya and Pavel Gavrilova. Pavel is a designer of real talent, who would have been snapped up long ago by the culture industries in the West. He has developed a collection of felt animals of real personality and humour (he would say his soul was drawn to them – Russians talk like that). Again here is a product line that, given the right treatment and branding, would sell in many Western outlets. I was indeed careful to immediately advise Pavel to be sure of his intellectual property protection, because these characters would make great film or television, and somebody might make a fortune out of them. But here's the social enterprise bit: Sergey, Liya and Pavel want to set up a network of homeworkers centred on Big Families. They can teach people to make the felt animals in 2 days, and their preliminary costings are based on the homeworkers making the average Russian wage (about 10,000 roubles - £225 - per month). Maybe a joint venture co-operative social enterprise structure can be developed here, perhaps in the Russian Non-Commercial Partnership form, half owned by the designers and half by the homeworkers. At any rate, the production can be sorted out – again it is a question of branding, marketing, distribution and sales.

Next: Vyshniy Volochek to Ostashkov...

Social enterprise in Russia

I am struck by some of the differences - and similarities - in trying to be socially enterprising in Russia and parts of the UK. The bureacracy may not be so forbidding here, but the scale of the challenge is still daunting...great opportunity for reciprocal learning!

John Sargent

I agree John. I'm now back

I agree John. I'm now back in the UK but still doing desk research. One very interesting fact I've discovered is that although 'social enterprise' as a distinctive concept - let alone a coherent and self-conscious social movement - is virtually unknown in Russia, Russian NGOs on average earn about 35% of their income - the highest figure in the world I have been able to find - and receive less than 2% from government grants - the lowest in the world I can find! The 2 figures are probably of course linked - but for whatever reason the fact is that Russian NGOs seem to be much better at self-financing than Charities here...