Russia is an oil-rich country and earlier this year exchange traded fund (ETF) investors were given the opportunity to invest in the country and its energy through Market Vectors Russia ETF (RSX). But there is more to Russia than oil, according to John Boudreau of the San Jose Mercury News. There are lots of scientists, technologists and a well-educated workforce. Their problem lies in the conversion of tech know-how into products and business plans.
Russia is looking to Silicon Valley for help creating a business model of success. They want to partner with tech companies and venture capitalists (VCs). However, current investment laws in Russia are turning off VCs. Russia requires VCs to back their commitments with cash up front, as opposed to the common practice of sending the money at the time of investment. Russia is working to change its laws to better align itself and help make their businesses more attractive. They also must overcome the leeriness Americans feel about the erosion of democratic institutions. To Russia’s advantage, there is a new generation graduating from universities who are smart, speak English, study abroad and will be better equipped to work in the global world. Will this mean we see more growth in the country outside of energy?
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.