• Investment development programs (IDP) (47 large companies);
• Collaboration with universities on conditions established by Resolution of the RF Government of 09.04.2010 No. 2183;
• Contribution to technological platforms1 (28 technical platforms to which 200 universities and 300 research institutions contribute)2;
V. Saraev, D. Medovnikov, T. Oganesyan. What cannot be sold is developed//Expert No. 44, 7-13 November 2011, p.22.
R&D management in Russian companies. The National Report.- M: Association of Managers, 2011, p. 30-31.
Resolution of the RF Government of 9 April 2010 No. 218 “On measures of state support of development of cooperation between Russian Institutions of tertiary education and organizations implementing complex projects on creation of hi-tech production”.
RUSSIAN ECONOMY IN trends and outlooks • Employment of measures of indirect regulation of innovation activity.
In Russia, according to interpretations by official representatives of the Ministry of Education and Science and the Ministry of Economic Development, the purpose of the cooperation is not just to expand connections in the research and production sphere but restoration, at least, across a range of directions, of sectoral science, which was lost in the post-Soviet time, including, inter alia, by means of its partial “transfer” to universities. Indeed, the progress in this direction is already visible: 67% of companies with annual earnings over Rb 1bn already interact with universities and corporations established under their auspices; meanwhile, their cooperation with sectoral and departmental research institutes was a bit less intense, with the respective figure accounting for 56%3.
Indeed, according to the data on large corporations’ innovation development programs (IDPs) (Table 16), volumes of financing they should allocate for universities will be constantly growing. It is envisaged that expansion of the outsourcing practice should help overcome the internal monopolism at corporate R&D divisions and bolster the efficiency of R&D spending in the corporate sector, while concurrently fueling university research.
Table Corporate Innovation Development Programs: Increase in the R&D Outsourcing to Universities 2010 2011 2012 2013 2014 Volume of R&D financing by cor- 82.9 227.6 291.9 344.1 330.7 304.porate innovation development programs, as Rb bn.
Volume of financing allocated to 2.9 11.5 16.5 20.2 21.0 22.universities, as Rb bn Proportion of R&D financing allo- 3.5 5.0 5.7 5.9 6.3 7.cated to universities, as % Source: data of the RF Ministry of Education and Science.
It should be noted that much attention was paid to public corporations’ innovation development programs. The RF Government is going to make them catalysts of the business sector’s activity in the research and innovation area. In this connection, Prime Minister V. Putin believes that it is imperative, “to tightly link the corporate executives and leading managers’ compensations to attainment of key indicators of innovation development”, while, at the same time, extending the list of enterprises with government participation which shall devise innovation development programs.
Currently the corporate plans in question appear fairly tentative, as, objectively, the planning time-frame, as a rule, is limited by no more than three years. R&D financing projections are in many ways associated with the anticipation of budget support, which is particularly true as far as defense corporations are concerned. Indeed, some 60% of the R&D spending by the corporations that have developed IDPs is formed by budget funds. Lastly, IDPs have so far Out of 47 companies that developed IDPs 37 ones contribute to technological platforms and 9 are coordinators of technological platforms. Source: Meeting of the Government Commission on hi-tech and innovation. January 2012. http://premier.gov.ru/events/news/17904/ Problems of formation of technological platforms are discussed below (see sub-Section 5.5.9).
According to a questionnaire survey on 100 large, small- and medium-sized corporations run by the Association of Managers. Source: R&D management in Russian companies. The National Report.- M: Association of Managers, 2011, p. 38.
Section Social Sphere appeared loosely coordinated with corporate strategic plans (where the latter exist), as well as with financial plans which are typically developed for just one year.
There also exist challenges to expansion of the cooperation between corporations and universities under IDPs. Those are: a low quality of the university R&D and its management, the external authors’ unpreparedness for taking into account corporate requirements, etc. That was exposed by a survey on members of the Association of Managers and the one on companies and universities collaborating in the frame of Resolution of the RF Government of April 2010 No. 218, which is running at the time of preparation of this paper. The search for a “perfect match” appears in many regards a random one, which is why corporations find it difficult to identify university contractors for their R&D even on the basis of competition. That said, 96% of the corporations that developed IDPs included universities in their R&D cosuppliers lists. The same proportion of corporations is going to cooperate with research institutions, which, however, is likely to be a form of the R&D outsourcing, rather than a genuine partnership, which is evidenced by the fact that it is only 17% of corporations that plan a joint use of research an experimental capacities at universities or at their own enterprises.
Innovation development programs suggest using a system of monitoring developed in 2011. Monitoring will be run on the basis of a set of indicators a part of which is to be reported on the quarterly basis. That said, every agency is keen to know different aspects of corporations’ performance and prioritize different indexes: e.g., the Ministry of Education and Science seeks to promote cooperation between the corporate sector and research institutions and universities, while sectoral ministries emphasize the importance of getting the programs aligned with sectoral development ones, etc. Overall, like other numerous “performance assessment” methodologies, the monitoring in question is based upon assessment of costs, rather than outputs. Clearly, there are too many indicators in this case, which antagonizes companies. Indeed, the data collection and processing methodology appears so sophisticated that companies will be compelled to hire a group of professionals to ensure timely reporting.
The quarterly reporting in turn does not match innovation introduction cycles, as it makes it hard to judge results of novelties. Hence, the danger of profanation, as the trustworthiness of data reported would be hard to examine. Perhaps it would make sense to cut the number of indicators to ensure a greater quality of the exercise.
The year of 2011 also saw the indirect regulation of innovation activities unfold, but it is premature to assess its effects. The situation with regard to instruments of indirect regulation is uneven: while tax benefits advance and are adjusted, the development of technical regulations finds itself at a stage close to stagnation. Accordingly, problems exacerbates. Thus, for example, technical regulation in the road construction sector has not been updated over the past 20-30-plus years1, which means that any attempt to introduce anything innovative would be regarded as a violation of the regulation. This problem also popped up with the launch of the work on Resolution of the RF Government of 9 April 2010 No. 218, and similar comments were received in response to a survey the Association of Managers2 ran on corporations. More specifically, the survey demonstrated that the standards comprised obsolete requirements and excessive detalization, while the use of State Standards of the 1970-80s de facto meant “the ban on the use and application of new technologies”. Novelties in the technical regulation area have so far fell short of justifying themselves, as the possibility for appli S. Kulikov. Novelties were let to drift in a paper sea//Nezavisimaya gazeta, 09.02.2011 p.4.
R&D management in Russian companies. The National Report.- M: Association of Managers, 2011, p. 70–71.
RUSSIAN ECONOMY IN trends and outlooks cation of new measures has not been ensured. Thus, companies are not ready to use the recently introduced European standards and technical specifications, as the procedure of transition to them has not been specified both to them and certification authorities.
5.4.8. Development Institutions in the Concept of “Innovation Lift” In 2011, the concept of “innovation lift”1 became popular with the Government. According to the concept, at every stage of the idea’s lifecycle – from fundamental and applied research to development, prototyping, commodization – there should be institutions and structures to back these stages, thus ensuring the accompaniment of a given project or idea.
In 2011, the “innovation lift” was complemented by another two development institutions, that is, the restored Russian Fund for Technological Development and the Agency of Strategic Initiatives. However the other institutions continued operating too. Those primarily were the Russian Venture Company, ROSNANO, the Fund for Assistance to Development of Small Forms of Enterprises (hereinafter referred to as the Foundation for Assistance), and Skolkovo Foundation. This comment is needed, because last year saw the rise of a trend to label any organization or even an instrument that affects the sphere of research and high-tech as “institution of development”. Because of that, the tag was also put on research foundations and even FTPs, albeit the latter constitute a mechanism of financing, rather than an institution.
So far a grave problem was that like within the national innovation system on the whole, the “innovation lift” comprises numerous elements, but ties between them appear specific and inefficient. Institutions duplicate, rather than complement, each other, across a string of directions, which is why it is hard to arrange projects moving from one development institution to another. Thus, only very few of thousands of small-sized firms’ projects supported by the Foundation for Assistance were granted a subsequent funding from ROSNANO2 or via venture funds established by RVC3. Furthermore, in the venture financing sphere, the search for projects was gradually replaced by the quest for companies with promising technologies, for representatives of development institutions tend to believe that there was too little a number of worthwhile projects4. Thus, for example, the RVS’s Fund for Seed Investment approved just 20 projects in 2011, or roughly the same number as a year before (19 projects)5. In other words, the magnitude of operations was small and did not expand.
That said, the cause for a loose succession may also lie in stringent conditions of financing offered by RVC and even more so – by ROSNANO. Until recently there had been yet another remora to advancement of the venture business, namely, the absence of adequate forms of its The concept of “innovation lift” was de facto used back yet in 2009 and the need for its formation was cited, for example, at meetings of the Commission on technological development and modernization of Russia. See, for example: http://kremlin.ru/transcripts/ Thus, out of 83 projects approved by ROSNANO only 16 had been earlier approved by the Foundation for Assistance. Source: “Start” anew. Interview with S.G. Polyakov, Director General of the Foundation for Assistance//Innovations.01.02.2011. http://fasie.ru/mass_media/Pressa_o_nas_stat_/press_stat_start-ponovomy.aspx According to Yan Ryazantsev, Director of Department of Investment and Evaluation of JSC “Russian Venture Company”, there are only a handful of recipients of federal and regional grants among projects awarded financing from venture funds with participation of RVC. Source: D. Mindich. Getting innovation into the region// Expert, No. 27, 11-17 July 2011, p. 58.
See, for example, Gorbatova A. Venture projects under the Russian jurisdiction http://www.strf.ru/ material.aspxCatalogId=223&d_no=43796; D. Mindich. Getting innovation into the region// Expert, No. 27, 11– 17 July 2011, p. 58.
Data as of 17 December 2011. Source: the list of projects approved by the RVC’s Fund for seed investment.
Section Social Sphere organization, which would have enabled one both to launch a business and drop it without sophisticated bureaucratic complexities. Some changes in this respect took place in late 2011, and they soon should have a positive effect on development of the national venture industry.
Between November and December 2011 two Federal Acts were passed – namely, “On investment partnerships” (of 28.11.2012, No. 335-FZ) and “On economic partnerships” (of 03.12.2011 No. 380- FZ). Both Acts should become effective as of 2012. Investment partnership is a well-known worldwide means of organization of collective investment without the formal incorporation, and its emergence should facilitate Russian entrepreneurs’ development of investment business. By its form, economic partnership appears similar to a Western LLC, and this novel form expands prospective investment mechanisms, which should become more attractive and understandable to foreign investors.