Recently it’s been fashionable to talk about a new wave of economic crisis. Production is in stagnation despite the constant modernization course. Professional staff regularly appears in the labor market though employers complain that there is nobody to be hired. Oil and gas sector remains the only significant source of budget revenues, while the basis of the economy - small and medium business - suffers from corruption. And all these features are very familiar to us. Once again, the regions are elaborating projects to attract foreign and domestic investment in their development by encouraging business to go to a partnership with the state.
Sverdlovsk region is not an exception. Already traditional state guarantees assurances of returning investment and reducing administrative barriers have been complemented by introducing a special economic zone. «Titanium Valley» is located on the territory of Upper Salda district in 35 km from Nizhny Tagil. The main preferences in taxation are preferential payment of income tax, exemption from taxes on property and land taxes for ten years and exemption from vehicle tax for eleven years. Besides on the territory of «Titanium Valley» there is a regime of favorable administration, creating the possibility of complex public services in one place, and there is a regime of free customs zone. Playground of «Titanium Valley» is provided with industrial and business infrastructure by the state budget.

The bet on the investment environment improvement is quite reasonable. For example, a European team of investors «Effort Management Group» is considering projects in the region and is ready to offer its eastern partners the joint participation. They hope on the prospects of the region and the efficiency of its authorities. However what projects exactly they are going to invest? It’s no secret that the most popular suggestions coming from regional authorities are in the field of major infrastructure or social projects. Construction of roads, hospitals, kindergartens, bridges, underground is very important to our cities. But is it interesting for investors? Payback period of these projects lies in the distant future. The dispute about political instability and clans struggle in the region is of special significance in the context of an «insurance policy» and «property guarantees». And there are only few of foreign investors’ offices or missions, constantly working and involved in the local business community.

What format of cooperation should be between Russian and foreign companies that would bring a permanent mutual income and the development of all the participants? How to start the practice of these relations? Of course, the classic basis is the political will of the regional authorities. Signing agreements, cross-visiting and understanding of each other's interests would help to remove stereotypical fears and predict future work. It would be important to consolidate investors in the region by opening representative offices or joint ventures, by organizing the work of office employee and a platform for business communication. Not only conferences and forums are needed. Everyday work on common projects should become the main cementing factor.

The projects themselves, fortunately or unfortunately, have to be integrated. If you don’t allow investors to return the money quickly, additional benefits wouldn’t compensate this fact. Business if it’s profitable would regulate the market and cooperate with the state which supports it. And free competition, attracting different companies and their equidistant relation to administrative resources are important motivators.

The second most important and indicative factor is the state's attitude to domestic business circles. Looking at the regional practice of doing business and authorities’ behavior to our entrepreneurs, foreigners consider a professional opinion about us. Nobody would believe in the sanctity of property guarantees for himself if he saw illegal expropriation of business from others. And the foreigners become scarier if they witness law enforcement injustice toward local businessmen, who, in their opinion, is much more reserved than strangers.

In the same row of disadvantages there are also such «applied» moments as a culture of service, document management, litigation. The emergence of commercial disputes doesn’t scare an adequate entrepreneur. But only in the case when there is a dictate of law and courts rules are transparent. If disputes are being resolved over the judicial field, it will be difficult to offer to foreign businessmen their familiar transparent legal approach. «The rules of the game» within each country can and should be different but the main thing is that they are equal and the same for all market participants.

Lightness and flexibility of financial institutions, literacy and systematic approach to regional economy management by the authorities are special factors. If the economy of our region objectively would correlate with the world trends in the banks rates, corporate programs and would have the stable connections with foreign financial institutions the multinational corporations and international companies felt confident and comfortable. If a foreign investor predicts some extra risk in commercial operation with a Russian partner he would transfer it to this partner. Or the strategy of the foreign investor in the region would shift from long-term to fast profit and taking out the money.

And of course, we should focus on such factors as the level of management and staff professional skills. Imagine that the Europeans have agreed to work together with Russians to build an object. Who will implement management and how the system of control would be organized? Where is the guarantee of transparent reporting in those formats that are accustomed in the West. In the case of Effort Management Group it’s maybe not the bottleneck, as soon as this company is a consulting team, specializing at the adoption of different approaches of management and is already familiar with Russian realities. But what’s about the other investment funds? The level of Russian management, sliding system, numerous checks and the reasons for which they occur - are a major deterrent factor to their participation.

Summarizing, we note that now we are witnessing an interesting trend. On the one hand, the regional government is taking the right steps, in terms of logic, to improve the economic activity of the Sverdlovsk region. On the other hand, it is the very moment to face the choice – whether we’d really look into the problem of attracting investment or would convert all measures to memoranda and empty schemes. We hope that in «our national team» effective businessmen and statesman play. Because no one in the world would believe us twice.