It should also be noted that the development institutions’ operations should not be narrowed down to a mere selection and financing of projects. Indeed, all of them are also engaged in complementary initiatives: from contributing to development of the technological infrastructure and holding various educational events to popularization of breakthroughs in research to support of business papers. That said, businesses have so far eyed development institutions “as moneybags, extra sources of financing, rather than partners able to help promote innovation with their expertise, background, business contacts, and organizational capacity”.Underpinning this conclusion is in part an insufficient degree of transparency of the development institutions’ operations, despite a broad publicity of a range of their projects and initiatives. At the same time, it is hard to discern their funding priorities, decision-making principles and, accordingly, it is difficult to judge not even their performance, but, at least, the quality of resources at their possession. That said, they exhibited a visible progress in certain directions, including growing interest in support of the investment infrastructure, formation of divisions and structures under foreign jurisdictions which would help penetrate international markets, attempts to better coordinate their operations. With regard to coordination, experts believe2 its effects so far have been two-fold: on the one hand, where executives of one development institutions sit on another one’s board, this bolsters the level of their mutual understanding, while demotivating one to objectively assess the colleagues’ performance, on the other.
Agency of Strategic Initiatives “Agency of strategic initiatives on promotion of new projects” (ASI) was established pursuant to Prime Minister V. Putin’s executive order3. The Agency focuses on implementation of strategic initiatives on support of societally significant projects for medium-sized businesses across a range of key directions, including two ones that directly center on fostering innovation, including the technological one. Those are “Support to medium-sized businesses” R&D management in Russian companies. The National Report.- M: Association of Managers, 2011, p. 57.
Cited by: Yu. Simachev. A presentation at the dispute club of ANTSEA “Economic policy knots” by the topic “Interim results of development institutions’ progress”.Moscow: MSU, 19.01.2012.
Executive Orders of 17 May 2011 No. VP-P16-3168 (item 15) and of 27 May 2011 No. VP-P13-3511. The ASI’s Charter and the composition of its Supervisory Board were established by Resolution of the RF Government of 11 August 2011 No. 1393-r.
RUSSIAN ECONOMY IN trends and outlooks (including the “Promotion of hi-tech medium-sized business on global markets” initiative) and “Young professional cadres” (the “System of support of leaders and talents” initiative)1.
ASI kickstarted in the autumn of 2011, and it is not still clear how it is going to support projects. In all likelihood, funding is going to be mixed, that is, public-private one. Meanwhile, it is already known that the ASI’s Expert Council will consider only business projects worth minimum a total of Rb 300mn, with the applicant being bound to invest therein no less than 10% of funding of his own2.
The groundbreaking initiative – training overseas of up to 10,000 specialists a year over the next 10 years – sparked the expert’s controversial reaction and once again compelled them to consider the degree of the overlap between different departmental initiatives.
Strikingly, the RF Ministry of Education and Science had been designing practically the same initiative before ACI was founded. In April 2011, the Ministry was gearing up for implementation of the President’s executive order to send for training overseas 10,000 students over the next decade3. The Ministry’s approach was to send those student who would subsequently be keen to return and work in the research or business sphere, which suggested, accordingly, co-sponsorship of such internships by universities and business. ASI modified the concept and produced a fairly simple, albeit large-scale, scheme, that is, to have up to 10,students a year earn Masters or PhD overseas over the next 10 years at the RF Government expense and somehow get them back home (no mechanisms of their return have been designed so far). This ambitious endeavor would demand USD 5bn in a span of 10 years, and this amount would be sufficient to implement far more imperative and less controversial projects, such as, for example, restoration and development of several engineering universities or world-class laboratories, etc. ACI did not care to provide a rationale for appropriateness of the project, nor did it make available a comparative efficiency of possible approaches to boost of the human capital quality.
Russian Fund for Technological Development The year of 2011 saw the Russian Fund for Technological Development (RFTD) renew its operations for the first time since 2008. RFTD is to form yet another component of the innovation lift by funding final stages of R&D, creating and testing experimental models and prototypes. In the frame of this model, RFTD “captures” successful research projects and project companies which have grown from the start-up level to catapult them to the state of commercially viable firms capable to advance at the expense of their own capital or by attracting credits on the market.
According to the approved by the RF Government on 7 September 2011 “Strategy of innovation development of Russian Federation” (the Strategy), RFTD should stimulate the rise of non-governmental R&D which are understood as a gradual increase in “both nongovernmental organizations and the share of funding coming from non-public sources, from the entrepreneurial sector’s funds in the first place”. More specifically, it is suggested that together with other structures RFTD will sponsor applied R&D, primarily corporate ones. That said, in the frame of its operations there will be secured:
1) disbursement of long-term (for 3-5 years) loans for R&D at a preferential rate;
Section Social Sphere 2) consulting and methodological accompaniment of the projects.
The Strategy holds that “RFTD will combine provision of financial support to corporations’ innovation activities with delivery of services and formation of conditions necessary for boosting the efficacy of the corporate technological management, shaping up corporate R&D centers, corporate venture funds and other modern innovation management institutions”.
Lastly, RFTD was assigned to provide institutional, organizational and consulting support to the functioning of the technological platforms included in the list.
RFTD is currently launching operations along four major avenues:
• selection, on the basis of a respective evaluation procedure, and financing with its loans of corporate R&D projects, with the funding to be repaid within 5 years from the moment of its disbursement;
• provision of information and consulting assistance to projects under development;
• provision of institutional, organizational and consulting assistance to the technological platforms’ functioning and funding of R&D projects presented by them;
• teaming up with the Agency of Strategic Initiatives in disbursing loans to medium-sized businesses, provided there is a large consumer of their innovation produce.
So, the RFTD’s mandate is ample and versatile, while its financial capacity appears fairly limited, particularly vis--vis other development institutions (Table 17).
It is planned that amounts of RFTD’s loans will vary from Rb 10mn to 300mn. Applications for funding are set to pass through 4 kinds of examination: science-technical, technological (technological audit), financial and economic, and legal examination. The evaluation system is built quite efficiently, as it allows completion of the project assessment within 4-months, ie. from the moment the applicant’s registration at the RFTD website to disbursement of the loan. The key factors affecting the length of consideration of applications are the quality and adequacy of the borrower’s business plan and Terms of Reference.
Table Budgets of Development Institutions Implementing Programs of Support of Research, Technological and Innovation Organization The 2012 budget, as Rb bn Fund for assistance to development of small forms of enterprises in the research and tech- 4,nical area Funds established by Russian Venture Company 30 (the RVC’s aggregate budget ) ROSNANO 22,Scolkovo Foundation 22,RFTD 1,MSP Bank 50,0 (áþäæåò Áàíêà) Vnesheconombank 383,1 (áþäæåò Áàíêà) Source: M. Rogachev. The role and place of RFTD in the system of state support of innovation development.
Presentation of 29.11.2011.
Priority is given to technology development projects, even where there are going to be no breakthroughs. That is why the examination focuses on a product’ usefulness for development of production (a new technical quality of the product and/or its lower production costs), rather than on its research novelty. Also important is the clause which holds that the right to the output of such R&D projects belong to their operators.
One of key directions of RFTD’s operations is financial support to R&D projects developed in the frame of technological platforms. To exclude duplication in development institutions’ operations RFTD picked 12 technological platforms to support (in such areas as medi RUSSIAN ECONOMY IN trends and outlooks cine and bioindustry, photonics, energy, new materials, mineral production and processing, environment).
Given the structure of Russia’s economy which is dominated by huge production enterprises whose activity in the area of technological innovation is low, albeit on the upsurge, RFTD is keen to support huge integration projects in the first place, including those with participation of small- and medium-sized businesses. It is implementation of large-scale R&D projects that corporations most often lack funding for. But, according to expert estimates, such projects come up with a price tag in the region of Rb 150-200mn, thus RFTD is doomed to momentarily run out of cash. So, RFTD will find it hard to follow its peers in generating a favorable environment for investment activity.
Skolkovo and the satellites of its concept In 2011, the i-city of Skolkovo was developed at an unprecedentedly high pace and at high costs (Rb 22bn). While in mid-December 2010 there were 16 registered participants therein, by early 2012 they had outnumbered 3001, with successful candidates having been selected from more than 1,500 aspirants. Plus, there started a grant-based financing of the projects, which were classified into 4 main groups by the stage of their commercial maturity2. By the end of the year, 40 companies had already been awarded grants to implement their projects. In parallel with that the project application evaluation system advanced: by late-2011, there was formed an expert panel of 368 experts, of whom 80% were Russian ones. However, the work is under way to attract foreign specialists so that their number would match the Russians’.
During the year, new amendments to the national legislation were adopted in order to create yet more favorable conditions for the Skolkovo residents to implement their projects.
Finally, a kind of defining moment was the signing on 26 October 2011 of a Cooperation Agreement between MIT and Skolkovo Foundation on creation of the Skolkovo Research and Technology Institute. The project is to be completed in a span of 3 years and should result in shaping up both a university and interdisciplinary research centers. That MIT finally decided to take part in the Skolkovo project – it took the MIT leadership quite a while to make up their mind – evidences that the project has proved credible and foreign professionals consider it possible to locally form a university of a new type.
The Skolkovo project is eyed with envy by many territories, especially those ones which have long made innovation development a priority. That is why the year of 2001 saw a more visible replication of Skolkovo by a number of regional administrations striving for creation of some “mini-Skolkovos”, if not ideology-wise, then, at least, in terms of principles of development. The ingredients of the success are clear: huge funding, exclusive benefits, universities’ contribution, and attraction of foreign specialists.
By the end of the year, there had emerged 2 regional leaders which managed to catch up with Skolkovo as close as possible. Those are: the city of Tomsk and its concept of “INO Svetina B. Matrix at the junction//Poisk, No. 5, 3.02.2012, p. 23.
The stages are classified into the following ones: “0” (ideas); “1”(seed stage); “2” (early stage); and “3” (advanced stage. A half of all the 2011 investments was designated for the early stage (projects with the volume of financing of up to Rb 150mn, with extrabudgetary funds making up half of the funding). Source: Investment Committee of the Skolkovo Foundation agreed upon principles of financing of resident companies of the Innovation Center Skolkovo http://www.unova.ru/article/7997 16.05.2011.
Section Social Sphere Tomsk 2020”, which ultimately came with the price tag of Rb 39.9bn1,and the city of Belgorod (Aurora-Park, worth a total of Rb. 23.3bn)2. In Tomsk, it is planned to focus on two priorities of “technological breakthrough” out of five, namely, nuclear and biomedical research, as well as on development of infrastructure, including transportation one, and on pooling local universities and research organizations’ efforts to deliver on the project3.
So, while i-city Skolkovo has not yet been completed, there emerged the followers of its model. This should soon give an interesting material to compare which would prove more efficient – a city built from scratch or an attempt to shape up a cluster where already existed a certain research, educational and other capacity.