Much is written about Russia and about doing business there. Understandably there is a tendency for the media to gravitate towards more controversial stories - as the recent G20 highlighted.
But Russian and British bilateral trade relations are of growing importance. Russia has been the UK's fastest growing export market for the last two years and remains a key member of the BRIC economies. UK exports to Russia in 2012 increased by 15 per cent from the previous year, reaching £5.5bn, and since 2001 UK-Russia trade has grown by an average of 21 per cent annually.
During a period of economic austerity in the UK, the Government has continued to bang the drum for British business overseas. Prime Minister David Cameron has insisted that the UK can "trade its way out of recession" while the UK Secretary of State for Business, Vince Cable, has taken part in major trade mission to Russia, during which he remarked that "Britain's trade with Russia is rapidly expanding and the opportunities will only continue to grow."
The opportunity and the impetus for British businesses to realise the potential in Russia seems clear.
But research conducted by Portland and the Russo-British Chamber of Commerce (RBCC) highlights that identifying the opportunity and making investment commitment, are two very different things: Seventy per cent of British businesses are optimistic about the investment climate in Russia over the next five years, and while a sizable minority (40 per cent) of British business leaders indicated that they are considering new investments in Russia within the next year, the majority were either undecided (20%) or not considering new investments at all (40%).
For Russia, falling commodity prices and a challenging global economic environment have placed greater importance than ever on the success of economic, regulatory and financial reforms. It is no wonder then that Russia has made these issues key agenda items of its G20 presidency this year. Attracting further inward investment is a key policy goal as is a drive to diversify into new sectors and build the country's service economy.
What then is the blocker for taking the all important first step to build business between the two countries?
Our research highlights mixed feelings about how to move from opportunity to tangible commercial possibilities. Issues such as regulation, corruption and the importance of networks came up time and again. British investors in Russia seem more inclined to wait and see rather than biting the bullet on investment decisions.
But the theme that came through most strongly was that the steady trickle of negative media coverage in the Western media has a direct and adverse impact on business decisions makers. Our research found that eighty per cent of British investors feel that Western media coverage of Russia and Russian business has a negative impact on investment decision making. The same is true of Russian business leaders - 75 per cent of whom shared this sentiment.
The Western media will rightly continue to cover the important diplomatic, political and social issues of the day as they relate to Russia and its relationship with the West. These issues clearly have a bearing on the appetite of business leaders to invest. However, we should be wary of letting this cloud the very real investment opportunities that exist.
To take one small example, a British air pollution control company based in Sussex managed to triple its size in the last five years, in large part down to exports to Russia. In a recent UKTI report, its Managing Director, James Scott-Bowden, said; "we were initially nervous about taking on such a big project in a country we were unfamiliar with, but exports have fuelled the company's growth."
Imagine a thousand more British companies taking the same approach. More engagement, greater dialogue and a commitment to getting behind the headlines and experiencing the respective markets first hand can help break down the barriers that investors and business leaders currently face. This will be vital if British and Russian investors are to realise the opportunities that undoubtedly exist.