From Milk Bottles to MBAs: EBF Talks to Professor Hans Rausing, Retired President of TetraPak
In 1997, a quiet revolution in Russian business management training began when Stockholm School of Economics opened a campus in St. Petersburg, (SSE SPb). The new MBA course was principally funded by donations from Swedish industrialist Hans Rausing, retired president of TetraPak, the world's largest liquid packaging company. In 1998, he was joined in the venture by Jonas af Johnick, owner of Swedish network marketing cosmetics giant, Oriflame.
Rausing, now visiting Professor in Malardalens Hogskola and honorary Professor in Dubna, delivered the first TetraPak machines to Russia in 1959 following negotiations which began in 1958. By any reckoning, this was an achievement in the Communist era. TetraPak grew to become Russia's leading foreign employer, with over 6,000 workers before the financial crash in 1998. Under his successors, TetraPak now employs 3,400 people.
Asked why he decided to invest in Russia at least twenty years before most international companies even dared consider the concept, Rausing bluntly declares during an interview in St Petersburg: "I like Russians, and there are a lot of them here." More seriously, he points out that Sweden was a key trading partner with Russia before the Communist era. St. Petersburg is geographically, ethnically and culturally close to the Nordic countries. 'Made in Russia' meant quality in the early part of the last century. Mr Rausing believes it can do so again.
Rausing is a red-blooded entrepreneur of the old school, a billionaire who carries his own briefcase. He is famously forthright, not to say controversial, especially on the subject of government interference in business. Addressing a group of SSE SPb graduates at the school's fifth anniversary in September 2002, he gave a series of business tips, some of which would have earned his MBA audience a place in a Gulag, merely for listening, in earlier times. One such example: "Never believe in the advice of governments, because they don't know what they are doing. If, by accident, they do, they lie."
A classic pioneering entrepreneur, Rausing sees opportunity in down cycles. His message, then as now, is "Go East, Young Man." His faith in the future of Russia is undiminished. He views the companies which fled Russia post-1998 as both short-sighted and cowardly, including TetraPak, with whom he has no active links today. "I always viewed Russia as a rich country full of poor people," he declares. "The horrors of two World Wars and 70 years of bad government laid waste to an ocean of opportunity and suppressed human capital. My views have not changed. It is the responsibility of those who govern to give the people the freedom to take advantage of this potential wealth."
He is a fierce critic of political intervention in business. His definition of power is "the right to force through wrong decisions." He is certain that "industrial development in Europe is held back by the strangulation of unwise legislation and crippling taxation." Reams of pointless bureaucracy force managers to focus on rules and legislation at the expense of business strategy. "Every managing director in the UK is forced to break the law, every day. If he or she read all the regulations which the law obliges them to heed, there would be no time at all in any given day to conduct business. That is one hidden cost of the burden of legislation."
Rausing contends that Germany's post-war economic hegemony was the result of a simplification of tax laws and slashing of bureaucracy by Chancellor Adenauer in the late 1950s. "He passed the legislation when the occupying forces went home for the weekend." "It (West Germany) became the industrial engine of Europe. Since that time, now with the added burden of the EU, tax after tax and pointless legislation has crippled the economy. Now more than four million are unemployed."
Despite his general scepticism about politicians, Rausing firmly believes that Russia's biggest opportunity lies with Vladimir Putin's 2001 tax reforms, which set a basic rate of 13 per cent income tax and give business a low taxation regime. …