Long the pioneers in Russian culture, scientists and technologists are trailblazing the newest frontier - business.
The scene outside Moscow's Manhattan Express would be easily deciphered by any New Yorker. The fidgeting in the crowd, the push toward the velvet ropes, the young women scrutinizing the crowd from behind those ropes, the burly security guards looking on - anyone can see that this is a happening night spot. The crowd is aggressively self-righteous. Tatiana Lavrionova, the executive producer at Moscow's hottest movie studio, is helping with face control, and she seems overwhelmed. "These must be all tekhnari," she says dejectedly. "Movie people are never this stylish!"
This bunch is stylish. The revelers look like they have been airlifted straight from a CK One ad shoot and dropped in the center of Moscow. These are the "New Russians," a mythologized new breed that managed to ride the wave of economic and social change that has shaken the country in the last five years. Surveys consistently show that most Russians have been badly battered by the changes. More than half the population now lives below the poverty line. Suicides have jumped 40 percent in two years. Recently, domestic media have coined the term "New Russians" to denote people who have money, style, and a belief that life is good and getting better.
The phenomenon is too new to have been studied by sociologists or statisticians. But appearance and popular wisdom would say that Lavrionova is right: overwhelmingly, New Russians are techies - tekhnari in Russian - the same group that has comprised Russia's cultural élite for more than three decades. These are computer scientists and physicists, mathematicians and engineers - the people who graduated from the country's high-pressure technical schools and went on to universities and defense-ministry research institutes. Along the way, they have shaped the country's intellectual culture. Quirks of the system conspired to create this improbable social class. Unlike people involved in intellectual pursuits in the humanities, tekhnari were generally left alone by the overseers of ideology. And, since more than 80 percent of the tekhnari were employed by the defense industry, many of them spent their lives in closed towns populated entirely by their colleagues (there were at least four such towns just outside of Moscow). This segregation spawned strong communities of intellectuals who formed the leading edge of the main cultural developments in Russia.
In the idealistic '60s, they made up the nucleus of the dissident movement, which resisted the régime. The movement was launched by the mathematician Aleksandr Yesenin-Volpin, inaugurated with a scandal that involved 99 engineers and mathematicians, and was led largely by the physicist Andrei Sakharov. In the repressive '70s, when much of the intelligentsia sought refuge in nonpolitical activities, the tekhnari made two of them into full-fledged fads: mountain climbing and folk singing. The first Moscow concert of Vladimir Vysotsky, the folk-singing popular hero of the '70s, took place in the Culture Hall at the Kurchatov Institute of theoretical physics, the birthplace of the Russian A-bomb. In 1981, the same hall hosted Moscow's first rock concert.
Over a decade later, tekhnari lead the way in conquering the newest frontier: business. The man now reputed to be the country's richest, Sergey Mavrodi, is a computer scientist-cum-stock market shark; the country's second-largest bank, Tver Inkombank, was founded by physicists; and small- and medium-size businesses seem downright dominated by the tekhnari. No one has done a statistical breakdown of Russian entrepreneurs by profession, but Ivan Kivalidi, president of the Russian Business Roundtable, an association of entrepreneurs, confirms the impression that business is dominated by tekhnari.
"We studied to be engineers or physicists, and now some are composers and others are traders," says Nikolai Polushkin, a 33-year-old theoretical physicist-turned-fashion designer. "This should not come as a surprise: tekhnari - especially Kurchatov physicists - have always been the most progressive people in Moscow, and now we are starting our own thing and creating a new culture." Polushkin's assertions are as self-serving as they sound: he graduated in 1985 from the Moscow Engineering and Physics Institute (MIFI), an élite institution with a pipeline to the Kurchatov Institute, where Polushkin worked until 1988. He started sewing in 1986 when, following the Chernobyl nuclear power plant disaster, he realized nuclear physics would never be the cushy field it once was. It is Polushkin who has drawn the crowd to Manhattan Express on this night: he is showing his fashions, conceptual creations in silk that landed the designer on the front page of Izvestiya, Russia's largest daily. He says his success in fashion - his outfits go for US$1,000 - has come naturally, in no small part because he has moved up the economic ladder together with his peers. "Gradually, I became better," he says, "and I kept making clothes for friends who were becoming store owners, presidents of computer companies, producers."
Tekhnari reinvent themselves
"All of our techie friends have gone into the music business or the clothing business," claims Larisa Protasova, a 1986 MIFI graduate in computer science who, with 1986 MIFI systems-engineering grad Liudmila Abramova, has been designing and manufacturing women's clothing for two and a half years. They are among Polushkin's peers who have struck out into business. "It became very difficult to survive in the high-tech field," explains Abramova. "MIFI professors now make 200,000 rubles [$60] a month." (In the old days, they made several hundred dollars a month and could afford virtually anything; now that prices have reached Western standards, they are poverty-stricken.) "So these people, though they liked what they were doing in the sciences, turned to their hobbies, and those became businesses."
Abramova, 31, and Protasova, 30, are an odd-looking couple: the first is barely over 5 feet tall, bodacious with a copper helmet of hair; her dark-haired partner is extraordinarily tall and lanky. No wonder the two engineers who'd never been able to find properly fitting suits decided to make elegant clothes "for real women, not models," as they proclaim in unison. They borrowed about $1,000 and bought a sewing machine and some cloth. Now seven Moscow stores and 30 regular clients buy their $100 suits and $20 blouses. After just four months in business, Abramova and Protasova were able to quit their engineering jobs and start hiring seamstresses. At one point, they had 10 people working for them; now they have cut down to their four best workers - all former engineers. "We've given up on professional tailors," chirps Abramova. Tekhnari, she says, "make the best workers: they are the most responsible and the most inventive.
"Tekhnari are practical-minded. We know that if you are given information, there must be a solution. It may not be the solution you envisioned, but there is always a solution." Protasova nods enthusiastically. Here, the pair is no longer talking about clothing manufacturing: their theory holds for life - the ability to survive, under ever-changing, almost chaotic conditions. Like other tekhnari-turned-entrepreneurs, Abramova and Protasova claim that what distinguishes their colleagues from the rest is an ability to react quickly and constructively.
Fateful accidents
The transition from engineer or researcher to entrepreneur has not been as conscious for many as it was for Polushkin, who picked a new field and dived into it. For Vadim Rakhovsky, who headed a Defense Ministry technical think tank for over two decades, his entry into the world of business was pure accident. About four years ago, he was on a flight from Moscow to New York, struggling to go to sleep despite two inebriated men continuing a loud discussion of lumber-shipping problems. "I could not go to sleep to their squealing," barks Rakhovsky, a man who is clearly used to having his way. "Finally, I turned to them and said, 'Tell me your problem. I'll solve it, and then we'll go to sleep.' They explained to me that it had become unprofitable to dry timber since fuel prices went up.
"The solution was plain to see. They were using great amounts of fuel to dry the wood because of the huge difference between the temperature inside and outside the drier. All they had to do was pump out the air, creating a vacuum and causing the temperature at which water boils to fall to 41°C." So, using a rule most Russians learn in high-school physics - that evaporation occurs faster in a vacuum - the esteemed scientist solved the lumber problem and, without knowing it, transformed the think tank, which was just then losing its federal funding, into Antekh, an R&D firm that develops not only vacuum lumber-drying chambers, but vacuum switches, marble furniture veneers, and unbreakable high-class china.
Mark Nemoyter, 45, also fell into his business. A former software engineer, he now heads a company called SBS, and takes in $5 to $6 million annually. His company's main lines of business are importing raw materials for the tobacco and food industries and designing and constructing small hydroelectric plants. The former activity, according to Nemoyter, is the most promising line of business in today's Russia because it offers the highest profit margin. The latter is an idée fixe of his partner, an engineer who spent two decades attempting to convince gigantism-afflicted Soviet authorities to construct small power plants.
Sitting in his office - a gray-carpeted, Western-style oasis in the center of Moscow - the plump, rosy-cheeked Nemoyter looks like a Type A personality in heaven. "My work is so interesting," he brags. "Every day I have to solve at least five major problems or 10 lesser ones. Take, for example, what I went through when we got our first shipment of coconut oil from Singapore. We needed to have safety certificates. First, it took the agency a week to get to us while I had to pay $200 per container per day for storage. They found the radioactivity was 10 times the legal maximum. Ten days later, after we appealed, they admitted they'd made a mistake, but said the lead content was too high. Finally, they made it clear: certificates cost $1,000 per container - no testing required - or no certificate, regardless of what we have in there." All it took was a bribe. "Now I tell you," continues Nemoyter, "no Western businessman has ever dreamed of the kinds of problems we encounter here every day."
Peter Sharow, the executive director of the American Chamber of Commerce in Russia, agrees. "The kind of obstacles entrepreneurs face here are enough to scare away many American businesses," he says. "Just the 22 different taxes will do that."
But the written laws are the least of it: it is the unwritten rules by which entrepreneurs have to compensate everyone - from the certificate-issuing agency to the local protection racket - that have Russian business people always battle-ready. These techie-entrepreneurs, like other business people, are understandably reluctant to discuss their relationships to organized crime, but all acknowledge that it is an ever-present part of doing business in Russia. For some of them, it cramps their style: Nemoyter says he drives a beat-up Soviet-made Fiat, keeps the outside of his summerhouse unpainted, and stays home most nights to avoid drawing more unwanted attention from the Mob.
Confidence is its own reward
Rather than grow dejected as they complain, these new Russians seem to relish their problems: they see themselves as warriors. "The relationship between the government and the entrepreneurs is best compared to gang rape, except the group being raped is far larger than the group doing the raping," says Kivalidi. And where the state lets up, organized crime turns on the pressure. "But as a result, the Russian entrepreneur compares favorably to his Western counterpart: he is always alert and in good shape, like a marathon runner."
Such is the trade-off: these tekhnari have given up their old social status - that of the cultural élite - in exchange for the self-image of a trailblazer. They believe they are heroes, even somewhat self-sacrificing heroes. "In a normal society," says Protasova, "tekhnari will work with computers and whatever else they were trained to do, but we do not live in a normal society, so this is what we have to do." There is a note of nostalgia in this statement: these newly minted entrepreneurs do miss their old work, but the payoff, they say, was well worth the sacrifice.
"I look at people who stayed in software," says Nemoyter, "and they are making decisions about whether they can buy sausage or good cheese this week. Meanwhile, I make decisions that affect the lives of the 35 people who work for me. All my life I was told I was a cog in the wheel. Only in the last five years have I realized this was not so." This is probably the biggest benefit of being a businessman in today's Russia: confidence, a rare trait these days. In a population that has seen everything slip away, this is a small group that feels it has gained - not lost - its power.
Perhaps because, as Abramova would say, they have found a solution - though it may not be the one envisioned when they chose their professions.
They seem to feel they can do anything. "I made a realization a year ago," claims Polushkin. "I discovered that the real power is not with the politicians or the masses, but with us, the young entrepreneurs."
The militant Kivalidi, from an older generation, drops the word "young," but his sentiment is the same: "Entrepreneurs will rule the country," he says. "It is inevitable."
