"Transition Engineering," Feature Article, Oct. 2002

PROFESSIONALLY SPEAKING

transition engineering

U.S.-funded programs rely on experienced professionals to help companies design processes for economic change.

by Donald J. Marshall.

The transition of economic life in Eastern Europe and the former Soviet Union started more than a decade ago and is still far from complete. Skills and experience developed by technical people in market economies are in demand throughout that part of the world.

For the last eight years, I have been involved in this transformation as a volunteer advisor and trainer to small and medium-size enterprises under a number of programs funded by the U.S. Agency for International Development. The work, usually in four- to six-week stints, has been challenging and rewarding. In addition to providing the direct satisfaction of assisting individuals and their enterprises, the assignments offer opportunities to see, at ground level, the challenges of moving industrialized countries from centrally planned to market economies.

The restructuring of the former Soviet states created many independent enterprises. Some were established organizations, but many were totally new entities.

These companies faced problems, not only in technical areas, but also in management. Business planning, marketing, and finance were activities not required under the old system.

The larger companies had access to consulting resources of international firms to guide them in meeting their new responsibilities. But the smaller firms—from a few employees to several thousand—did not have the money to buy such advice. USAID stepped in to help with a series of programs using volunteer advisors, coordinated by local offices in the newly independent states.

In America and Western Europe, small and medium-size companies turn to experienced personnel with management expertise. Moreover, many western technical curriculums include administrative subjects, such as accounting, engineering economics, or project management, so even recent graduates have some knowledge of the needs of independent enterprises. Backstopping these resources are commercial consultants and even volunteer advisors provided by programs like SCORE, the Service Corps of Retired Executives, sponsored by the U.S. Small Business Administration.

In the former Soviet Union, USAID programs seek to fill the void created by a lack of experienced managers and sufficient sources of newly trained personnel, by providing advisors with industry experience and necessary relevant skills.

These are opportunities to apply one's experience and learn about other areas of the world. I was motivated to learn more about Russia and used my experience and time to get the opportunity. About 30 other ASME members and I have availed ourselves of this chance through a USAID program managed by Citizens Democracy Corps. CDC is one of the private contractors that arrange for volunteer technical assistance to many countries under USAID programs.

The Contrast Is Clear

My first trip to Russia was in January 1993, as part of a group from Babson College to study the economy. At that time, the country was convulsed under the impact of shock therapy, the end of most price and money exchange controls, and the start of privatization of the state-controlled economy. The winter days and city streets were as gray as the nights were long. Metro station exits were cordoned by lines of the destitute and elderly selling their housewares to make ends meet, while ever-present youthful entrepreneurs bought and sold privatization vouchers.

In contrast to the personal economic chaos, we visited sites of major technical achievement—heavy engineering works in the St. Petersburg area for steam turbines and nuclear power vessels and the space command center outside Moscow. The trip made clear to me that this was a rare event—the peaceful but terribly disorienting economic restructuring of a major, industrialized country.

Here was a nation that was internationally competitive in space, armaments, and sectors of aviation, which had the technical ability, but needed change and development of its economic, social, and physical infrastructure. Given that Russia has a very large position in oil and gas activities—my area of experience—I was motivated as an engineer and economist to see how I could contribute to the process that was under way.

The tanker Primorye followed the path of icebreakers as an exploration group called the Sakhalin 1 Consortium conducted trials last February and March.

In December 1993, I answered an ad in The Wall Street Journal for volunteers to assist enterprises in Eastern Europe and the New Independent States. My resume covered a 30-year association with Chevron Corp. in California and four years of consulting in energy and related processing on the East Coast. My experience had been split between refinery engineering and operations, and project business planning and economics.

The next month, when I was in Washington on a National Petroleum Council refining project, I followed up on my submission by visiting the sponsoring group, Citizens Democracy Corps.

In February, I was on my way to Electrostal, Russia, for a month-long project in business planning with a CDC client, the Electrostal Chemical-Mechanical plant. The enterprise manufactured activated carbon and carbon filters, and was in the process of being privatized.

While it was still winter—cold and crunchy—when I arrived, the thaw followed near the end of my assignment, turning streets into sluices of slush and water. But the first of March is celebrated in Russian elementary schools as the start of spring and, like the season, perseverance and hope seemed to sprout with the first sunny days. So went the project—starting slowly, but gaining momentum to end focusing on contacts and opportunities in markets the company had not known existed or had no idea of how to reach.

After several more projects over the following two years, I contributed to a seminar initiated by CDC on Sakhalin Island in the Russian Far East. The program's objective was to introduce local companies to the opportunities—and requirements—arising from the international oil and gas projects getting under way there.

The USAID programs in which I have been involved all fall under the category of "small and medium-size enterprise support." Since my first assignment in 1994, the program in Russia has moved from one-on-one assistance—that is, one advisor to one company for a month or two—to more training of groups. I have directed workshops and contributed to seminars for groups ranging from a dozen participants to more than 10 times that number.

The subject of the assistance, in my experience, has been focused on business practices, with an assumption of technical knowledge. Much of my work has been in the oil and gas area. There has been interest, but not much resolution, in code requirements of international firms, particularly for offshore platform work.

Safety and Quality: Topics of Interest

Quality management, including evaluation of quality certification—for example, ISO 9000—is a topic of great interest. Likewise, safety programs, particularly for businesses involved in construction, are in demand.

But all these subjects are moving targets. Russian businesses and business practices have come a long way in the past 10 years. On my early trips, I saw only a few personal computers in client offices. Now they are ubiquitous, as are Internet cafes in regional towns.

In addition, younger people who have moved into management positions in the last decade have benefited from broader experience and exposure. The explosion in foreign travel by Russians has had a definite impact. Trips abroad are not only for the top managers. In the Sahka Republic— formerly known as Yakutia, that largest of all Russian provinces (twice the size of Alaska) and the most sparsely settled—my 20-something interpreter had traveled to Belgium for a winter holiday, and my program manager had taken her son and a group to Greece for a summer vacation.

The Sakhalin 1 Consortium's Orlan drilling platform was towed from Alaska to a site off Sakhalin Island.

The locations of my assignments in Russia have been diverse. Most Russians have not seen as much of their country as I have. While Sakhalin in the east and Rostov-on-Don in the south have been my project sites many times, I have been given assignments in the Far East in Vladivostok, Magadan, Khabarovsk, and Yakutsk, and in a half-dozen western Russian cities, too. I have used all three of the Moscow airports at one time or another and am very appreciative of the completion of the capital's outer ring road for some of the inter-terminal rides.

USAID works in many other countries with other needs and at other stages of development. In the last several years, I have led and participated in seminars and workshops of a CDC program in Azerbaijan to develop businesses that seek to be suppliers to the petroleum projects there.

Citizens Democracy Corps was founded in 1990, after the fall of the Berlin Wall, with the express purpose of assisting the establishment of free markets and democracy in Eastern Europe and a rapidly changing Soviet Union. With private contributions and USAID contracts, CDC now coordinates programs in these areas as well as in Thailand and Guatemala.

Business support is important to CDC and includes contributions to specific activities (like support of oil companies with interests in the region) and Delta Airlines' donation of air transportation for volunteers. CDC maintains a Web site, www.cdc.org.

USAID has other organizations involved in its small-business work with which I have had projects or pro-posal of projects. Winrock International, based in Morrillton, Ark., has worldwide interests in increasing agricultural productivity. Its activities include assistance to small and medium-size enterprises, and it continues to be active in the Russian Far East. Its Web site is www. winrock.org.

Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance similarly has an international agricultural focus, with special expertise in rural financing. But its roster of volunteers includes many with technical backgrounds needed by smaller companies. Its Web site is www.acdivoca.org.

The International Executives Service Corps was established in 1964 as a "private Peace Corps" to provide worldwide technical and managerial assistance through volunteer advisors. IESC's Web site is www.iesc.org.

If you have the interest and time, these organizations will work diligently to match your experience with their clients' needs so you, too, can contribute to these transforming events.

Donald J. Marshall is a consulting engineer and economist based in Norton, Mass.