2. It seems appropriate to expand the scale of grant-based support at early stages (where risks are maximum), namely, at the pre-seed one, as well as to spread this mechanism onto the seed stage of innovation. It is desirable, in the frame of measures on development of the university R&D, to consider a possibility for support of creation by research universities of special seed funds (capitalization of the existing ones).
3. With regard to development of grant-based innovation support patterns in Russia, it should be noted that a string of nations apply the “matching grants” mechanism to encourage innovation development. Good practices evidence that provision of such public grants to private businesses appears more effective than tax incentives for innovation1.
When compared with “regular” grants, the mechanism in question is less exposed to the risk of “substitution” of private resources with public ones in the course of exercise of investment activity, and it to a greater extent helps attract businesses’ extra resources into the innovation sphere.
In principle, in Russia, there is a similar mechanism associated with provision of subsidies on financing of innovation projects corporations implement together with universities2. However, an additional flexibility of this mechanism and prospects of its expansion could be ensured either by positioning it as a basic operational vehicle of one of public funds engaged in support of innovation activity, or by creating a special fund.
1. An important source of new innovation projects may become small innovation companies created under universities. This appears important from the perspective of expansion of the community of innovation-oriented entrepreneurs at the expense of university graduates: in the frame of the aforementioned monitoring, experts referenced to a substantial potential of the university environment in this regard: some 8.5% of students are ready to become entrepreneurs3.
While noting a substantial progress in terms of reduction of normative barriers to creation of small-sized innovation firms under universities, it can be ascertained, nonetheless, there should be additional measures (mechanisms) in place to support integration of such companies into global value creation chains. The current emphasis on the number of newly founded companies and their focus mostly on local niches arrest potential to their dynamic growth.
See, for example: Maloney, William. 2005. “Global Patterns of Innovation”. World Bank Resolution of the RF Government of 9 April 2010 No. 218 “On measures of state support to development of cooperation between Russian institutions of high education and organizations implementing complex projects on creation of highly technological production”.
Verkhovskaya.O., Doronina M. National report “Global monitoring of entrepreneurship. Russia. 2010”. High School of Management of the St. Petersburg State University, 2011.
Section Institutional Issues 1. The task to broaden the circle of projects supported at the pre-seed and seed stages cannot be solved momentarily, as it requires improvement of conditions of formation of new innovation projects and companies. So, it is imperative to increase funding of applied R&D at the pre-commercial stage to ensure an accelerated rise of the scientific and technological capacity to get university students engaged in conduct of research and commercialization of research outputs.
2. Solution to the problem of bolstering the development institutions’ operational efficacy appears in many ways associated with implementation of measures on attraction of foreign investors to participate in their capital. This allows counting on a fair assessment of the quality of governance and “value” of the respective structures, improvement of selection of projects to support, and mitigation of the risk of a “timeserving” influence of the state. So far it has been only ROSNANO which has developed plans to attract private investors; however, such medium-term tasks seem rational for the Russian Venture Company and – in a more remote future – for Vnesheconombank (upon separation from it the Bank for Development per se and its transformation into an adequate organizational and legal form), too.
3. It is imperative to promote efforts with regard to dissemination of development institutions’ best operational practices, public demonstration of success stories associated with specific projects, and special educational programs. It is critical to ensure a substantial progress in monitoring and assessment of qualitative, indirect effects from development institutions’ operations1; meanwhile, assessment of such external effects requires organization of regular independent audit.
6.4. Bankruptcies in 2009–2011: Post-crisis Dynamics; New Trends; Regulation 6.4.1. Dynamics of Bankruptcies (2009–2011) The overall situation in the field of bankruptcy over the period under consideration was shaped by the following four key trends.
1. First of all, it is necessary to note the beginning, in first half-year 2011, of a decline in the number of bankruptcies and the number of petitions in bankruptcy submitted to court that followed the period of growth of these indices in 2009–2010. Thus, over the period of 2009– 2010, the number of court decisions concerning the recognition of a debtor to be bankrupt and the initiation of a proceeding in bankruptcy rose by more than 15% (in 2008 – 13.9 thousand;
in 2009 – 15.5 thousand; in 2010 – 16 thousand cases2). In the first half-year 2011, there occurred a significant drop (by nearly 20%) in the number of petitions in bankruptcy filed with courts of justice (first half-year 2010 – 21,037; first half-year 2011 – 16,853); and a drop by 13.5%, on the same period of 2010, in the number of decisions issued to the effect that a relevant debtor should be deemed to be bankrupt (first half-year 2010 – 8,047; first half-year See, also: Simachev Yu., Kuzyk M. Institutions in Development.- Direct investment, 2010, No. 4.
Out of 16,009 decisions on deeming a debtor to be bankrupt and initiating a proceeding in bankruptcy in 2010:
- 3.2% (or 508 cases) have to do with state and municipal unitary enterprises;
- 13.1% (or 4,882 cases) have to do with individual entrepreneurs;
- 5% (or 800 cases) have to do with agricultural producers;
- 1.4% (or 224 cases) have to do with financial institutions.
RUSSIAN ECONOMY IN trends and outlooks 2011 – 6,955)1. The changes in these indices that occurred over the period of 1998–2010 are shown in Fig. 12.
Sources: Statements prepared by the Supreme Arbitration Court of the Russian Federation concerning the consideration, by the arbitration courts of subjects of the Russian Federation, of insolvency (bankruptcy) cases in the period of 1998–2010.
Fig. 12. Changes in the Number of Decisions on Bankruptcy Petitions over the Period of 1998–The surges in the number of bankruptcy cases in 2002 and 2006 and its growth in 1998– 2002 (analyzed previously elsewhere)2 resulted from the government’s activity in connection with the need to ‘clear the field’ of effectively abandoned enterprises through recognizing the absent debtors to be bankrupt and allocating the necessary budget funding to the achievement of that goal.
The years 2009–2010 saw a continuation of the growth (since 2008) of both the overall number of submitted petitions in bankruptcy (2008 – 34.4 thousand; 2009 – 39.6 thousand;
2010 – 40.2 thousand) and the number of petitions submitted with regard to substantive debtors3 (in 2008 – 26.4 thousand; in 2009 – 35.2 thousand; in 2010 – 36.6 thousand). Thus, over the period of 2009–2010 the number of petitions in bankruptcy filed against substantive debtors rose by 38.6%, while the overall growth in the number of petitions in bankruptcy amounted to approximately 17.1%. The peak of growth was observed in 2009. The data on the bankruptcies of ‘substantive’ debtors for 2011 are not yet available, but it can be reasona Statement on the consideration, by the arbitration courts of the Russian Federation, of insolvency (bankruptcy) cases in 2008–2010; in the first half-year 2011 – see www.arbitr.ru Ekonomika perekhodnogo perioda. Ocherki ekonomicheskoi politiki postkommunisticheskoi Rossii 1998–2002.
[The Economy in Transition. Essays on the Economic Policy in Post-Communist Russia of 1998–2002.] M.:
IET, 2003, p. 505; Ekonomika perekhodnogo perioda. Ocherki ekonomicheskoi politiki postkommunisticheskoi Rossii 2000–2007. [The Economy in Transition. Essays on the Economic Policy in Post-Communist Russia of 2000–2007.] M.: IET, 2008, p. 473.
Substantive debtors are understood to be all the debtors less absconded ones.
Section Institutional Issues bly assumed that this index is going to decline in accordance with the general downward trend displayed by the number of bankruptcy proceedings. The dynamics of the number of petitions to recognize ‘substantive’ debtors to be insolvent (or bankrupt) over the period between 1998 and 2010, set against that of the overall number of petitions in bankruptcy, can be seen in Fig. 13.
Sources: Statements concerning the consideration, by the arbitration courts of subjects of the Russian Federation, of insolvency (bankruptcy) cases over relevant periods; analytical notes to the statistical reports on the operation of the arbitration courts of the Russian Federation over relevant periods, prepared by the Supreme Arbitration Court of the Russian Federation.
Fig. 13. The Number of Petitions for Recognizing a Debtor to Be Bankrupt Submitted in 1998–2. A diminishing influence of government policy measures on the dynamics of bankruptcies, including the regulatory activity of tax agencies relating to the recognition of debtors to be bankrupt1. Thus, while in 2008 more than 67% of petitions in bankruptcy were submitted by relevant empowered agencies (in the main tax agencies), in 2010 the share of indices belonging to that group dropped to 39.2%.
Against the backdrop of both general growth and the increasing frequency of the application of bankruptcy procedures in some segments, an opposite trend was displayed by the number of bankruptcies of agricultural producers, which declined by more than 5 times between 2006 and 2010 (in 2006 – approximately 4,000 bankruptcies; in 2007– 2,465; in 2008 – 1,614; in 2009 – 1,036; in 2010 – 800). This was the result of the government’s agricultural support measures that involved broader crediting, restructuring of tax liabilities, and allocation of dotations to cover purchases of petrol, oil and lubricants, etc.
On the impact of the activity of government agencies in the sphere of legal entity liquidation on the general trends in the bankruptcy sphere, see Apevalova E. A., Radygin A. D. Bankrotstva v 2000-e gg.: ot instrumenta reiderov k politike “dvoinogo standarta”. [Bankruptcies in the 2000s: from Raiders’ Instrument to “Double Standard” Policy] – Ekonomicheskaia politika [Economic Policy], August 2009.
RUSSIAN ECONOMY IN trends and outlooks At the same time, bankruptcy indices were increasing elsewhere: thus, for example, the number of bankruptcies of individual entrepreneurs more than doubled over the period of 2007–2009 by comparison with the previous years: in 2004–2006 there were 200–700 bankruptcies per annum; in 2007 – 2,478; in 2008 – 4,751; and in 2009 – 5,423). In 2010 there occurred a certain decline to a total of 4,882 bankruptcy cases (by 10% on 2009).
3. A more noticeable activity of creditors, from the year 2009 onward, in the sphere of protection of their interests in the framework of bankruptcy procedures, and in 2010 – also in the initiation of bankruptcy proceedings.
Thus, over the period of 2009–2010, the number of applications, disputes, complaints and petitions files in the framework of bankruptcy procedures effectively doubled: from 111,in 2008 to 232,845 in 2010; the rate of growth of opened and considered bankruptcy cases was noticeably lower. The main reason for that growth was the considerably increased number of petitions filed with courts in connection with failures to comply with and violation of contractual obligations; the general economic situation; as well as changes in bankruptcy legislation in the part of granting some new rights to the participants in bankruptcy proceedings.
In particular, this had to do with the right to dispute the transactions carried out by a debtor;
the right to bring the persons and entities controlling a debtor to subsidiary responsibility; the right to submit a petition concerning the intention to redeem claims relating to mandatory payments, etc.1 In the first half-year 2011, this index became somewhat adjusted by dropping by 10.9% on 2010.
Besides, the year 2010 saw a rise of 31.7% on 2009 in the number of petitions submitted on behalf of creditors in bankruptcy, which in 2010 amounted to 39.1% of the total number of petitions. The share of petitions filed by debtors shrank from 23.1% in 2009 (9,145 petitions) to 21.7% in 2010 (8,727 petitions)2.
4. In the period of 2010–2011 there emerged an upward trend in the number of concluded amicable agreements, financial recoveries of enterprises and external management procedures.
Thus, while the level of solvency recovery of enterprises as a result of the imposition of external management was traditionally low, the number of external management procedures actually effectuated in the first half-year 2011 rose by 30.9% on 2010 (839 in the first halfOut of 232.8 thousand of applications, disputes, complaints and petitions, 165 thousand (or 70.1%) is constituted by documents concerning the determining the amount of creditor claims. That index also significantly rose on 2008 (by 2.4 times: in 2008 – 67.6 thousand), while the number of petitions concerning the dismissal of an arbitration commissioner was no longer declining, and in 2010 it even slightly increased – to 13,416 (or to 5.8% of the total number of applications, disputes, complaints and petitions).
As follows from statistical data, the number of creditor complains concerning the violation of their rights and lawful interests considered in 2010 rose on 2009 by 73.5%. The number of petitions concerning the determining of the amount of creditor claims increased by 33.2%; and the number of petitions concerning prolongation of a bankruptcy proceeding increased by 27.5%.