Networks in the Russian Market Economy

Front matter

Networks in the Russian Market Economy

Marrku Lonkila

This page intentionally left blank

Preface

1 Introduction The software industry as an exemplary case of the functioning of the Russian market economy The role of social networks in the Soviet and Russian economy and society Incorporating cultural and moral aspects into studies of networks in the Russian economy Structure of the book

2 Using Networks to Find Out about Networks The significance of personal networks in studies of the Russian economy The qualitative approach in social network analysis Network data and how to get them Limitations of the study Problems of generalization

3 The Evolution of Russia’s IT Sector Arcadia: The birth of a St. Petersburg software company Computing in the Soviet Union Information technology and the collapse of the Soviet Union The ICT sector in the Post-Soviet Russian economy

4 The Soviet Legacy and its Transformation in the Russian IT Field Constraining and enabling aspects of the Soviet legacy Soviet organizations as platforms for the emerging economy Entrepreneurship and Soviet legacy Blat: Transformation of the Soviet-era networking practice Blat in post-Soviet Russia Barter: A transitory phenomenon of exchange Otkat: The role of ‘kickbacks’ in the Russian economy

Vv vi Contents

Other informal practices in the post-Soviet Russian economy Prevalence of criminal practices in the Russian economy

5 Social Milieus and Personal Network Growth in the St. Petersburg IT Industry Schools and universities Internet milieus The Russian Software Developers Association (RUSSOFT) Birthdays as foci of interaction

6 The Types of Economic Resources Transmitted through the Networks of St. Petersburg IT Professionals Business ideas and partners Clients Starting capital Office space Jobs Advice and information Services

7 Social Mechanisms Governing the Informal Transactions between Russian IT Managers Reciprocal expectations in Russian managers’ transactions Brokerage The mixing of personal and professional spheres of life

8 The Spirit of Russian IT Capitalism The connexionist spirit of Western capitalism The domestic spirit of Russian IT capitalism

9 Conclusions

Appendix: List of Respondents Notes References

Index

100 101 103

106 106 119 127

134 134 137

146 148 166 180

List of Figures and Tables

Figures

3.1

4.1

4.2

4.3

The use of Internet, personal computers and mobile phones in Russia

The share of barter in Russian industrial sales, 1992-2007

The frequency of use of the terms blat, barter and otkat in selected Russian newspapers 1998-2007 Ranking of Russia in Transparency International’s Corruption Perception Index

Tables

31 3.2

3.3

3.4

5.1

The development of Russian ICT markets 2003-7 Software exports’ proportion of the Russian IT sector 2003-7

Median number of employees in the 100 biggest Russian IT companies 2003-7

The use of Internet in selected European

countries in 2008

Popularity of the Russian social network sites in summer 2008 vii

Note on Transliteration

For transliterating all citations of bibliographical material and words other than names or places, the Library of Congress system (without the diacritical marks) is used. For details, see The Transliteration of Modern Russian for English-Language Publications (Shaw, 1967) and the information on the Library of Congress website. All personal and place names in the text are transliterated according to the British Standard (or ‘System I’; see Shaw, 1967).

viii

Preface

My research on networks in the Russian economy and society started in the early 1990s as part of a larger European research project on personal networks coordinated by Professor Maurizio Gribaudi at the Ecole des Hautes Etudes en Sciences Sociales. The Finnish part of the project was led by Professor Risto Alapuro at the University of Helsinki. The interest Risto and I had in Russian society led us first to add the case of Russia to the network data corpus on other European societies and later on to conduct several other research projects on the Russian economy and society. Without Risto’s continuous support and encouragement, intellectual interaction and stimulation, this book would not exist.

Anna-Maija Castrén and Anna-Maria Salmi joined our Finnish research group and worked intensively on the network data collected within the frame of our common project. I have always been able to count on Anna-Maija’s and Anna-Maria’s help, and their serious and uncompromising attitude to the researcher’s profession remains exemplary for me.

Russia turned out to be a tenacious research topic. After 1992 all the research projects in which I have participated or which I have led have, in one way or another, had to do with Russia. Within these projects I have, with Risto Alapuro and other colleagues, collected and analyzed data on the personal networks of Russian secondary school teachers, factory workers, young mobile phone users, and IT professionals, often in a comparative perspective.

I am grateful to the many people who assisted in the realization of this book. Aleksi Aaltonen, Svetlana Kirichenko, Eeva Nironen, Sylvi Nikitenkov, and Olga Tarasenko helped in preparing the online survey on the personal networks of IT professionals. Tatyana Kozlova collected the Russian interview data, which was coded by Sylvi Nikitenkov at the Department of Sociology, University of Helsinki. As native Russian speakers, Sylvi Nikitenkov and Viktor Sinelnikov have been constant sources of help at the Department of Sociology, both in practical terms and in helping to make sense of the linguistic details and cultural specificities of the Russian interview data. In addition, Sylvi has diligently and competently worked as my assistant during all phases of the research, gathering and analyzing data from various sources.

ix x Preface

My gratitude also extends to the people who helped either in the fieldwork, the data analysis, or the writing period through discussions concerning Russian business practices, the features of Russian culture, or network methods: Zhanna Tsinman, Alexander Etkind, Kapitolina Fedorova, Timo Harmo, Natalya Ganina, Boris Gladarev, Jukka Gronow, Melanie Feakins, Arkady Khotin, Meri Kulmala, Nikolay Likhodedov, Elizabeth Moore, Sanna Määttänen, Tiina Saajasto, Pekka Sutela, Terttu Turunen, and Alexey Yurchak.

Risto Alapuro, Alena Ledeneva, Anna-Maria Salmi, Philipp Torchinsky, Larisa Shpakovskaya, and anonymous reviewers at Palgrave Macmillan have read the earlier versions of the manuscript and made many invaluable comments. In addition, Philipp deserves special thanks for his permanent and valuable help in all phases of the study. Taiba Batool and Gemma Papageorgiou at Palgrave Macmillan were indispensable aids in converting the manuscript into the final book.

The Academy of Finland, the Aleksanteri Institute, Collegium for Advanced Studies and Department of Sociology at the University of Helsinki have supported the research financially and offered peaceful but stimulating research environments. I owe special thanks to Risto Alapuro and Markku Kivinen for arranging for the financing of the study in the interstices of two research projects.

During recent years the research seminar led by Risto Alapuro at the Department of Sociology has been a permanent source of collegial support and constructive criticism. Wise advice from and discussions with Eeva Luhtakallio and Tuomas Ylä-Anttila from the seminar have been especially significant. I have also been fortunate to be able to lean on the substantial knowledge and expertise of the Russian society provided by the staff and the researchers of the Aleksanteri Institute, the effective and quick library and information services of the Institute, and the library of the Faculty of Social Sciences at the University of Helsinki.

The most important of my international connections have been with France and Russia. The French connection has been effectuated through yearly research exchange visits to the Ecole des Hautes Etudes en Sciences Sociales (EHESS) within the exchange program between EHESS and the University of Helsinki. The advice of Alain Blum, Pascal Cristofoli, Myriam Désert, Gilles Favarel-Garrigues, Maurizio Gribaudi, Anne Le Huérou, Anna Lebedev, Anna Zaytseva, Kathy Rousselet, and Laurent Thévenot has been particularly beneficial. In addition, the conferences of the International Network for Social Network Analysis (INSNA) and the collegial help and discussions effectuated through the

Preface xi

INSNA international e-mail distribution list SOCNET have been irreplaceable resources.

In Russia my main contact has been with the European University at St. Petersburg, the home base of my research visits in Russia. I thank Vladimir Gelman, Oleg Kharkhordin, Anna Temkina, Vadim Volkov, and Elena Zdravomyslova for their intellectual stimulation and practical assistance.

In addition to the European University, another important node in my St. Petersburg network is the Center for Independent Social Research led by Viktor Voronkov. The Center and its researchers, particularly Boris Gladarev, have been invaluable resources for this study. In Moscow the expertise, support, research, and contacts provided by Vadim Radaev at the Higher School of Economics are gratefully acknowledged.

My greatest thanks go to the Russian IT professionals who took time out of their busy schedules in order to be interviewed or to participate in our web survey. Those who were particularly helpful, and with whom I still continue to exchange opinions after the completion of the research project, cannot be singled out here in order to protect their anonymity, but I would like to warmly acknowledge the gift of their time and thoughtful interaction. The responsibility for the conclusions, interpretations, and outright errors in the text is, naturally, mine only.

Ursa Dykstra revised the language of the book with great care and expertise, and also translated parts of the manuscript from Finnish to English. Irina Vesikko assisted in the final phases of the book editing and checked the English transliterations of Russian words.

I am also obliged to the writer Antti Hyry, a legend of Finnish literature, who believes that finishing a book manuscript is, after all, a matter of sheer will and resolution. In an interview after having received a major Finnish literary prize Hyry said: ‘If you intend to write a book, you just have to write it’. These words pushed me during moments of doubt to finish this book.

Finally, I want to thank my wife Anu-Katriina Pesonen, my daughter Ruut, and my son Elja for their patience and endurance.

This page intentionally left blank