At a time when many western and established economies are facing a drawn out period of economic stagnation following the global financial crisis, it is natural for the optimists amongst us to point to the emerging markets for signs that opportunities for growth are still rife. Whilst on some levels this argument is being undermined by a slowdown in places such as China and Brazil, there can be no denying that these markets offer, on a macro level at least, much opportunity for both investment and career advancement. It is nevertheless clear that despite the better economic outlook, there is no easy road to success. Each emerging market has its own characteristics, risks and challenges, both in terms of investment and within the employment markets themselves.

In Russia, despite welcoming signs such as the recent admission to the World Trade Organisation, some aspects of the property market make investing extremely challenging, not least the drawn out permitting processes and ingrained political risks. The pool of international investors with serious interests within the market has indeed remained relatively small, especially considering Russia’s relatively healthy rebound from the crisis and the continuing lack of supply in many real estate sectors.

These market specific risk factors also impact on employment opportunities. The sector has proven to be relatively entrepreneurial, with a plethora of start-ups appearing prior to the crisis, and yet is heavily reliant on the availability of considerable equity and debt financing. Many firms active in 2006 did not realise their ambitions and today they are nowhere to be seen, with many projects being taken over by their lenders or sitting idle. An additional trend, within local firms especially, is where entire teams are being dismissed and hired when their “Heads of” change. Such unpredictability has led to more employees considering their salaries on a monthly rather than an annual basis.

Nevertheless, there are still big opportunities for investment as well as career advancement. Few international investors have been significantly successful but those that have done well have tended to do very well and service providers have also had much success. Despite the lack of market maturity, one of the major international consultancies also reported that at one point Moscow was their second most profitable European office.

The higher reward potential also extends to jobseekers – not in many markets could someone rise to the role of Head of Real Estate at a major private equity group seven years post-graduation. As with investors, the most active players are local and opportunities exist within Russian private equity funds, state-backed enterprises (such as Skolkovo, Russia’s answer to Silicon Valley, and the “Big 2” banks, VTB and Sberbank), and private development firms.

Within property, for Russians wanting to gain international experience, they are now better off securing a role within a local firm that is investing abroad rather than joining a western firm offering inter-office moves. For ex-pats, a stint in Russia is still often seen as a good early career move before settling down to a more stable life.

Emerging markets offer a mixed bag; new and exciting experiences, potentially greater rewards, but also higher chances of failure, and greater, more unpredictable challenges.

Article written by Gergely Stewart – Regional Director CEE, Russia & CIS