5 November 2019

"Serving the interests of public welfare requires more rights and freedoms for entrepreneurs"

Serving Customers – Serving Voters: Entrepreneur & Politician

As Head of Department in Russia’s Ministry of Industry and Trade, Nikita Kuznetsov is responsible for the development of internal trade in Russia, he promotes digital labelling of goods and takes action against illegal trade of products. Before joining the public service in 2011, the Muscovite and graduate lawyer, Kuznetsov was an independent entrepreneur: He ran a café in the Moscow Region. With this experience, he is a unicorn within the world of public service – always in action against unnecessary state interference in business and for a maximum of entrepreneurial freedom.

Nikita Kuznetsov in an interview

You became a civil servant after more than ten years of experience in private businesses. Why did you decide to join the world of state administration?

What exactly urged me to work as a civil servant after several years of being a private entrepreneurs? I wanted that time, as I still want now, to ease the conditions for entrepreneurship in Russia. Trade, including cafés and restaurants, is among the largest branches of economy. I have some expertise in this field, and as ex-entrepreneur – a real former private entrepreneur, not a private corporation employee – I possess some unique experience: I personally experienced the realities of Russian entrepreneurship “from the inside”. And like any normal person, I constantly wished to change things, and there is quite a lot that needs to be changed. This is possible only by working in the public sector. Thus, when I got an offer to head the relevant branch of the Moscow Government and later the Russian Ministry of Industry and Trade, I agreed.

Has your approach to politics changed after your transition from business to state service? Do you believe that state service and politics need people with personal hands-on business experience?

Regular state service is, of course, a special area of activities requiring special approaches. The main point is that the results are not always measurable in money like in normal business. To the contrary, one must often reject opportunities that, for example, lead to budget profits but are harmful for the economy as a whole or go against public welfare. There are lots of people among civil servants that are, as state officials say, “from business”. But those are mostly former corporate employees, not only from private corporations, but also from state ones. These people are not “from business” in my eyes. I have a different kind of experience. I used to be an entrepreneur; I have led my own business – a small business – at my own risk. I can safely say that this is not the same as for example working as a manager of a large corporation – no offence intended. There are very few people like me with personal business experience working in state agencies, almost none. Thank God, my boss is pretty much like myself, thus, I believe, we have formed an effective team and we don’t need to explain each other things that are obvious to any true entrepreneur. We have a very difficult mission – to explain our colleagues lacking similar experience things that are sometimes quite obvious for us. For example, that the state cannot and should not tell entrepreneurs how to lead their businesses. The state must provide such conditions that entrepreneurs can apply their talents and conduct their activities. At the same time, the state needs to consider public interests. The less the state actually steps in to impose regulations, the better it is for all of us. Regulations must be exclusively aimed at upholding public welfare needs. It is extremely hard, but we believe that our work is vitally important.

Nikita Kuznetsov at a conference

Nikita Kuznetsov, Russian Retail Week; © Ministry of Industry and Trade

Talking to business people we often hear complaints about the state and politics. Sometimes we even feel like defending politicians – their work is just as hard and the responsibility just as high. Do you also hear complaints about politicians? How do you feel about them?

Yes, we receive lots of complaints about the authorities. Mostly they are about excessive interference of the state in business affairs. What can I say? Probably, 80% of our work as a ministry is to prevent the adoption of wrong decisions that can harm business. For this purpose, we are trying not only to discuss all relevant decisions together with business representatives, but also prepare them together.

Nikita Kuznetsov on the podium

Nikita Kusnezov, Russian Retail Week; © Ministry of Industry and Trade

Comparing your current position in the state administration and your past business activities: Does success depend on the same or different qualities? Which skills you have developed in business help you today in your job? And which are harmful?

It’s really hard to answer this question, it is too philosophical. Like I said, state service involves a special, peculiar kind of activities. I believe this applies not only to Russia, but also to other European countries. Like I already noted, the notions of result and process in business and civil service are often completely different, and they should be. I believe, for example, that the work of a state organ cannot be built on the principle of project work, with certain evident exceptions when something that needs to be realised has a definite beginning, end and distinct aim. Actually, 90% of state work consists of daily routine activities – regardless of whether we are talking about a police officer or ministry employee. This is a frequent matter of disputes between us and our colleagues that come from the abovementioned so-called “business”, I mean, former managers of large companies. They believe that much more can be done by means of project work, working in “project teams”. Time will tell, maybe they are right, but personally, I don’t think so. Thus, working for the state, you need to get used to a quite monotonous process, often strictly regulated as well. It is not easy, many people can’t stand that. Can civil service experience be applied for business? Assuming that business means working for a large company, then, probably, it can, to a certain extent. Talking about one’s own business – then probably not. It requires different qualities and competences. However, if you possess those qualities, then your state service experience will definitely not harm you, just like any other experience.

What are the main problems of the interrelations between business and the state?

I can tell you straight: often it is business, mainly represented by major companies, that asks the state to impose certain additional regulations. I strongly believe that this is wrong and I always try to explain that to them. This is one of the problems.

Another problem is that many state officials quite sincerely believe that business -I am primarily talking about pure market segments, such as trade - needs to be looked after and supervised. Otherwise, something bad might happen. They believe that giving entrepreneurs more freedom may “create risks”, as state officials like to say. Most interestingly, business people themselves mainly believe so too. Thus, for example, even the suggestions of our Ministry to radically reduce excessive, often procedural, sanitary requirements for trade and restaurants have been met with suspicion by some large companies: their mindset prevents them from rejecting the “staying on the safe side” paradigm.

How well do these two worlds understand each other, and to what extent do you consider yourself to be a mediator between these two worlds?

I definitely do not consider myself to be a mediator between two worlds. I regard my work as somewhat more prosaic. Messiahship directly leads to madness, as you may well know. Talking seriously, both businesses and the state are constituents of the same society with all of its problems, myths and clichés. Our aim is to do what we think is right according to our understanding and experience and what is beneficial for public welfare. Currently, I believe, the interests of public welfare require broadening the rights and freedoms of entrepreneurs.

Nikita Kuznetsov Profile picture

Nikita Kuznetsov, Head of Department in Russia’s Ministry of Industry and Trade; © Ministry of Industry and Trade

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