PUESTA A TIERRA DE PROTECCIÓN

In spite of not the most friendly economic climate for Russian innovators, despite low demand for the new products, despite high death rates among the technology start-ups, over the 20 years after the start of economic reforms a considerable number of these companies have nonetheless survived and adapted to these conditions. The Russian innovation world has acquired experience of not only failures but also suc-cesses. Today we can not only lament the diffi cult fate of Russian science and technological industry, but also discuss the actual results of the projects that have already been realized and specifi c problems of par-ticular companies. There aren’t many such companies, but they do exist.

Statesmen must from time to time divert their attention from their debates over legislation bills to focused work with entrepreneurs who over the last decade have managed to build their business from the ground up and who have technical expertise and are able to bring innovative products to the market. Today our innovative fi rms do not grow well, they encounter serious barriers at every stage of their development. Let us take a look at why this happens and how to eliminate these barriers for each particular company. Yes, this is going to be a hands-on approach to innovation management, but if we do not push forward one, ten, or a hundred innovation companies and don’t determine how this is done, all of the discussions about the importance of innovations will only be abstract.

So far it is possible to distinguish three groups of potential recipients of such assistance who require a dif-ferentiated approach within the forms of state support.

Projects originating from the system of the Russian Academy of Sciences and higher education institutions, and implemented by small companies with annual proceeds of 100 thousand to 1 million USD are at an early stage. These companies will need support from the state while transitioning to mass production and while

86

setting up a regular and continuous production supply of consistent quality. Also, they will need assistance to structure business and establishment a stable management structure. Their key problems include: the need to establish strong connections with the production centres, as well as an opportunity to receive reduced (or even free) fi nancing for the business plan of the project. If the state could- having selected approximately 1,000 deserving projects and having provided them with appropriate support- provide for the transition to the next stage of at least 100 of those companies – this would be a considerable success for an innovation policy.

The next stage concens companies with proceeds of 1 million to 10 million USD. For them a key question becomes the development of a sales network and receiving investments, credits or loans for the expansion of production. As there are no appropriate support mechanisms in place, access to investments is very limited for smaller fi rms: their risks are too high and they can’t provide appropriate securities for bank credits. And to gain access to the funds distributed by the Federal Targeted Programmes they do not have suffi cient experi-ence, authority and connections. They need regular orders from key consumers within the country. From the state they will need support in setting up marketing, sales, service, in the perfection of design (ergonomic design), in the creation of a security system for protection from crime and corrupt offi cials. The target goal for the state support should be to transfer at least 10 out of 100 such companies onto the next stage.

Growth of Russian Innovative Companies

87

For those fi rms which have managed to reach the sales level of 10-100 million USD the investment issue is not so pressing anymore. They can receive credits, they know how to approach the ministry and win the tender. The new problem for the growth of innovation companies within this segment in Russia is an extremely small volume of the inner market itself and low demand for new developments – fi rst of all from large industries. A move to foreign markets and attracting investments into main capital could help over-come this limitation. But for a transfer to the global market they lack the appropriate qualifi cations. They will need support in building up their foreign-trade activities, in the development of government relations, in the creation of the correct corporate structure, in an entrance to the fi nance markets, and in M&A deals.

They should be provided with a considerable share of foreign contractors (10-30%) in the proceeds. Unfor-tunately (or forUnfor-tunately) the task of selecting is here eased by the fact that today the level of USD10-100 million in sales has been surpassed by very few technology companies. If we could lead at least a few of them onto the level of USD100 million – 1 billion in proceeds, this would mean that they have managed to enter the ranks of the largest Russian companies. And this radically changes the economic landscape of the country and the perception of the issue of innovation by the people.

As for the companies that have approached one billion USD in turnover – here the build-up of success of the innovations business depends not on the funds for expansion and not even on an ability to establish client relationship within or outside Russia. Here they will need to have, fi rst of all, a mechanism to attrac-tion money from the funds market. Secondly, they will need to form various types of partnerships with the state. Thirdly, they will need a sizeable class of consumers who are innovators. And fi nally, they will need to be able to create fundamentally new markets.

Works Cited

1) Fagerberg, Jan & Srholec, Martin (2007) “National innovation systems, capabilities and economic development” (Working Paper on Innovation Studies, University of Oslo)

2) National Innovation System: Experience of Select Asian Countries (2005, Proceedings from Working Seminar, New-Delhi (India))

3) Stephen Feinson (2002) “National Innovation Systems: Overview and Country Cases”

4) Nelson, R. and Rosenberg, N. (1993) “Technical innovation and national systems”

5) Kate Ho and Katharina Luban (2004), “National Innovation Systems: A case study of South Korea and Brazil”

6) Trevor Monroe (2006), “The National Innovation Systems of Singapore and Malaysia”

7) “Evaluation of the Finnish National Innovation System”, Policy Report (2009), www.evaluation.fi 8) Fagerberg, Jan et al. (2009) “The evolution of Norway’s national innovation system”

9) Wicken, Olav (2007) “The Layers of National Innovation Systems: The Historical Evolution of a National Innovation System in Norway”

10) Getz, Daphne & Segal, Vered (2008) “The Israeli innovation system: An overview of national policy and cultural aspects”

11) “National innovation systems: Finland, Sweden & Australia compared” (2005, Report prepared for the Australian Business Foundation)

12) Gernot Hutschenreiter (2009) “OECD Review of Innovation in South-East Asia”

13) Balzat, Markus & Hanusch, Horst (2004) “Recent trends in the research on national innovation systems”

14) Niosi, Jorge (2002) “National systems of innovations are “x-efficient” (and x-eff ective). Why some are slow learners”

15) Freeman, Chris (1995) “The 'National System of Innovation' in historical perspective”

16) Innovative Sweden. A strategy for growth through renewal (2004, by Ministry of Industry, Employment and Communications of Sweden)

88

‘My greatest wish is that we focus on human resources’

Dmitri Medvedev, June 01, 2010

In place of an introduction

The following version of the Human Resource Support Concept Paper (here on ‘HR Concept’) for the Russian