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Innovations to unite government and businesses in Russia

Published: 05 February, 2010, 19:50
Edited: 08 February, 2010, 18:42

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TAGS: Investment, Budget, Big deal, Economy


Russia’s government says it has been generous to big businesses. Now it wants help and its contributions to be returned, with innovation projects in focus.

In the times of trouble last year, Russia's state spent huge amounts of money in saving big private businesses from going bust. As President Medvedev says, now it’s time for payback.

“Last year the government supported big companies, many in the raw materials sector. We had to spend substantial state reserves accumulated during the pre-crises period. These companies have not only kept their assets, but also increased them. Therefore, the state has the right to count on these companies to be involved in investment projects and help modernize the economy.”

Modernizing the economy will require costly research, investment and acquisitions, often with only a distant prospect of making a profit. Inevitably, business needs centralized help to achieve this collective goal, and the state-run company Rosnano is at the centre of coordinating the effort in Russia.

Anatoly Chubais, the company’s CEO, says they are now focused on the documentation that will make it easier for international cooperation in the sector.

“We are in dialogue with companies dealing with innovations and they complain first and foremost about the import-export hurdles they face. We have drafted the document that gives a green light to innovative products. The second document will touch upon the changes in the tax regime with regards to knowledge-based companies. It will be submitted by the end of February.”

Rosnano has already got 64 projects in its portfolio with a total investment of $6.5 billion.

One company that has a joint project with Rosnano is Sitronics, the country's largest microchip producer, with its president Sergey Aslanian adding that the work on closer cooperation with Russia’s government and businesses is already underway.

“The government is taking practical steps in order to create an ecosystem that will allow not only the government to invest in high tech, but also the big businesses.”

Rosnano's chief says the technological gap between Russia and developed countries is roughly 40 years, but with Russia's rich tradition in science, combined with more liberal economics and the political will – it is a gap that is being bridged.

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Carrefour in Moscow's shopping center "Filion" was closed in February 2010 05.02.2010, 18:01

Carrefour will sell its Russian business in parts

The world's second-largest hypermarket chain, Carrefour, having failed to find one buyer for all of its three Russian hypermarkets, is likely to sell leasing rights to rivals, Reuters reports on Friday.

08.02.2010, 16:52

Cement producers look to export their way into firmer future

An expected 15% slump in Russian residential housing is expected to continue to make life tough for Russia’s cement producers over the coming year.

Count Cash February 05, 2010, 22:06
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There are some great opportunities for confusion in all this, so I think we need be a little bit clearer. You can have research which is long term and strategic, but that does not mean you are innovative. The research is necessary to make Russia a cutting edge competitive technological country in the future, but it is not sufficient to ensure innovation. There is a confusion here that innovative returns are always long term and they need always central government backing. The big research and development programs do need strategic planning, but again this does not mean they are innovative. Innovative means doing something new,something different. The modern concept of innovation is to apply it to everything, the old idea was that innovation means tehnology. I have to train people out of this mode of thought continually. Innovation does not need to be about technology, and the returns can be very very quick. You can innovate in packaging, in business model in finance ..... the list goes on and on. The problem we have here is that government doesn't understand innovation, it only understands research and development. That's fine and needs to be done, so I want them to do a good job of it. But innovation needs to be a culture coming from the bottom with assistance from the top. It can't be centralised. It doesn't work to try to control innovation centrally. To get innovation, you must lead by example, give people freedom to try and protection in success. The smart ones will innovate to make the fastest cash in the shortest time. Indeed they sometimes will act in detrement to long term R&D and that's where government comes in, to help take the grunt out of the long term research, which would not happen without them. So now let's realise we need more fast innovation people who are shown by world examples how to do it. A culture needs to be created, yes this needs support functions and access to finance, but it is the total package that makes it happen.