Russia seems to keep isolating itself from the West through misguided decisions. Case in point: the dismissal of a high-profile foreigner attempting to help build Russia’s innovation economy.


From left: Kendrick White, Managing Principal and founder of Marchmont Capital Partners, and Authorities Liason Officer with Russian Venture Company Oleg Utkin at a meeting "Silicon Valley Venture Investors Visit Russian Venture Company" at Moscow-City international business center in 2010. Photo: RIA Novosti.

The recent removal of American entrepreneur and University of Nizhniy Novgorod vice-rector Kendrick White from his post in the aftermath of a critical report on a state-owned news channel presents a huge reputational problem for the university. It was White, after all, who was responsible for attracting global talent to the school and building the school’s reputation for innovation.

While White will continue to head the school’s efforts to commercialize new technologies, the surprising move is a clear indication of a nationwide governance crisis – something many government officials have been often talking about in private and in public for almost two years now. Often, decisions made at the highest levels seem to carry with them internal contradictions.

One of Russia’s unique features – a feature that continues to create demand for Kremlinologists in the West – is the opaque dominance of unofficial institutions over official ones.

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For example, the Presidential Administration is by far the most influential institution in Russia although it is barely mentioned in the country’s constitution.

As a result, heads of large state-owned companies that technically have to report to government members may have more de facto political power than their de jure supervisors due to close personal relations with the President.

That creates a hard-to-navigate system of personal relationships, policy issues and development priorities that requires political intuition to understand current trends. The further one is from a decision-making center, the harder it is to guess a current trend and adjust one’s course of action.

Instead of simply obeying laws and regulator’s instructions, one always needs to think ahead and read presidential texts between the lines to make sure all decisions of national leaders are understood well and immediately carried out.

The problem is that a country of Russia’s scale can hardly be run like that. According to one of the nation’s most influential economic regulators, Russia has invented a new public management system – a system based on orders and assignments.

As a result, there tend to appear decisions that clearly contradict one another, not in the wording perhaps, but definitely in spirit. Regional governors need to both foster investment and economic development and increase social spending. Federal authorities aim at both improving the business climate and increasing control over entrepreneurs to prevent tax evasion. Making Russia part of the global innovation economy and boosting Russian universities into the ranks of the Global 100 coincided with rigorous attempts to prevent espionage and foreign influence, something that can be described as a sort of witch hunt, the search for fifth columns or foreign spies. 

To make the situation even more complex, various agencies have different policy priorities, and their influence constantly changes depending on who was the last to have his or her ideas and projects approved by decision makers. That has happened before, too.

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For example, there was the head of a global IT corporation visiting the Skolkovo Innovation Center to discuss establishing a large scale joint project who was detained for six hours just before law enforcers suspected Skolkovo of supporting the Russian opposition and conducted a search of the organization’s headquarters in 2013. Clearly, the joint project was tabled as the global executive stormed back to the airport the moment police released him.

The only way any public official can navigate this system of competing and sometimes contradicting policy priorities is being able to adjust as quickly as possible. And, of course, overkill—an excessive effort— is a far safer strategy than any lack of compliance.

Was it indeed a decision by the president or some of his top advisers to prevent any American from taking a leadership position in the Russian education system? Of course not.

There was probably a 1 percent chance that the report of Russia’s main propagandist Dmitry Kiselev criticizing Kendrick White was indeed an indication of a high-level political decision with a 99 percent probability that the news story was just yet another attempt to boost viewership.

However, who could blame the university president for firing his deputy after several prominent economists, including Sergei Aleksashenko, Sergei Guriev, Konstantin Sonin and outstanding scientist and philanthropist Dmitry Zimin came under pressure and left the country in the past few years?

The overall context made it seem entirely plausible that despite a strong need to attract international talent to foster innovation, Russia once again changed its priorities and seems to have turned its back on the West, obsessed with conspiracy theories and fears of espionage. 

The consequences are, of course, far from glamorous. White will probably have to change his lifestyle, at least for some time. The Nizhniy Novgorod University he used to work for will have a hard time attracting other international professionals to work and teach there and, consequently, getting anywhere near the list of the Top 100 global universities it had been aiming at.

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Russia’s soft power has suffered yet another loss as nothing builds longer and crashes faster than reputation. The one and only potential positive outcome we can still hope to expect to follow from this story is that it created yet another reason to make changes in Russia’s governance mechanism.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.

[Editor's note: Kendrick White was also a Russia Direct contributor who helped to co-author a recent report on Russia’s innovation economy]