Why this is important to Wisconsin businesses: Agriculture and information technology are two particular areas of opportunity.
With the current uncertainty and economic conditions in Russia, investors have become cautious of pumping money into the country, but where there is crisis, there is always opportunity. Some promising sectors currently include:
- Agriculture, which is experiencing a boom due to sanctions and import substitution efforts. Domestic production, equipment sales and related businesses are growing, and entrepreneurs can get in on this opportunity by investing in Russian production.
- Information technology, where Russian expertise in mathematics and programming is highly valued globally. Artificial intelligence offers a competitive advantage for internationally oriented companies, and cooperation with specialists from Russia can provide this benefit. While significantly less expensive than their U.S. counterparts, Russian professionals are no less competent and can initiate advanced projects, whether it be for specific one-time tasks or startup technologies.
Mixing these two sectors provides yet another opportunity.
Entering the Russian market can be tricky, the success of a business or an investment can depend on various factors. “There are a lot of free niches on the market, from high technology production to street food or street retail,” explains Artem Deev, leading analyst at the Moscow-based AMarkets financial consultancy. Finding these niches is key.
With the low likelihood that sanctions will be lifted soon, opportunities will remain in areas that have import substitution potential, says Dimitri Elkin, Partner with Twelve Seas Capital, a private equity fund focused on cross-border transactions in the former Soviet Union. Automotive, civil aircraft engineering, timber, agricultural machinery, and road engineering are all areas expected to see a rise in domestic production.
“The fall in value of labor in Russia has made it more profitable to get involved in businesses that require a lot of ‘hand’ power,” adds Deev, noting that in this respect, starting a textile operation, technology business, or even an agricultural enterprise may be promising.