An interview with Yekaterina Inozemtseva, Skolkovo Foundation Director for Strategy, who together with her colleagues has created the subprogramme titled Creation and Development of the Skolkovo Innovation Center, which is considered by the Government experts to be a model one.
“The Project for the Creation of the Skolkovo Innovation Center” has become part of the state-run programme titled “Economic Development and Innovation-Based Economy.” This resolution was already dubbed “historical”, while this powerful and vivid epithet describes the events that determine the future of nations. Yekaterina Inozemtseva, Skolkovo Foundation Director for Strategy, was fully committed to preparing this document. In her interview, she answers some questions and reveals the multidimensionality and depth of the resolution of August 1, 2013, for both the participants of the Skolkovo Foundation and the entire innovative ecosystem of this country.
Yekaterina Inozemtseva:
“The resolution adopted by the Government of the Russian Federation on August 1, 2013, is comprehensive and very important to all of us. First of all, it confirms that on the whole the Government is satisfied with the results achieved by the Foundation over the past three years. Otherwise, the Russian Government would not have decided to continue financing the project, in 2014 (as was planned earlier on). So, the Innovation Center Development Programme for the Period Ending 2020 was adopted. Besides, it is secured by the Government’s obligations to allocate some part of financial resources for its implementation. This means that the project is considered by the Government to be highly promising.”
Minister of Economic Development of the Russian Federation Alexey Ulyukayev reporting about the state-run programme titled “Economic Development and Innovation-Based Economy” at a Government session (Photographed by the Press Service of the Government of the Russian Federation).
Question: The resolution to continue co-financing the project has been confirmed not only by the Government. How do you see the logic of further development of the support for the project on the part of its key stakeholders?
Answer: It is noteworthy that originally the project was not supposed to be financed only and fully by the Government. In accordance with the approved Subprogramme, the Skolkovo Foundation is committed to raise private finance in the amount and share that substantially exceeds the Government’s share.
Of the approximately 500 billion rubles that we have to raise for the project for the period ending 2020, the Government is willing to provide only 135 billion. I would like to emphasise that our obligations were thoroughly calculated. Our fund-raising ability to raise the funds was confirmed by our calculations. If for some reason we do not succeed, this will become the clearest indication of the fact that the project starts to slip, because fundraising is the actual confirmation of confidence on the part of the market. Investment formats¾be it investment in stakeholders’ projects, engagement of developers to construct real estate properties, as well as some other investment methods¾can surely be different. Anyway, external stakeholders have huge confidence in the project.
At present, we can see that the Government has displayed confidence in our project. We can also see confidence on the part of venture capital funds whose accreditation agreements provide for soft obligations in the amount of 20 billion rubles. In addition, industrial partners entered into agreements to create research and development centers in the Skolkovo Innovation Center with a total budget of about 30 billion rubles. So, the Skolkovo Foundation states in its Subprogramme that until 2020 it is willing to raise an additional amount of 350 billion rubles.
Question: It is no secret that public projects are subject to political risks. In your opinion, what is the project’s safety margin, for example, in terms of risks associated with foreign policy?
Answer: Let us draw conclusions on the basis of facts. Now we see that our investors and key partners do not change their attitude to the project depending on foreign policy developments. Thirty percent of the obligations to invest in the project are formed by non-Russian companies. One-third of the venture capital institutions that collaborate with us are foreign venture capital funds. The fact that they remain true to their decisions is a good signal that politics are politics, while high technology solutions constitute a separate field for their game. Our science and intellectual power are still highly valued in the West. But now the rules of the game are somewhat changing. While in the past we just exported our brains, at present, due to the efforts of institutes for development, for example, we declare that we will no longer give our engineers away – we will create an adequate environment for them to develop their ideas domestically. Meanwhile, we will export their ideas on a commercial basis. This approach is becoming more profitable. In this connection, our foreign partners will receive high quality intellectual products without spending time on their further development.
Aleksandr Bragin, Member of the Expert Council under the Government of the Russian Federation and Director of the FORUM Analytical Center, named the Innovation Center development subprogramme a “model” one (Photographed by the Press Service of the Government of the Russian Federation).
Question: What is the safety margin of this support model for the Skolkovo project?
Answer: Firstly, it should be clear that a large part of the government support funds will be allocated to create infrastructure. As soon as the infrastructure is created by joint efforts, we will need government support funds to pursue three areas of activities: implementation of the grant policy, municipal management of the Innovation City, and development of the Skolkovo University of Science and Technology. In the event that the Government reduces its financing, we will have to give up on supporting one of these areas. Now imagine that we have given up on grant financing, for example: this would slow down the research and commercialisation of high technology start-ups – participants of the Skolkovo project. So, surely, the later this hypothetical scenario happens, the better.
By 2020, however, this kind of risk will be less critical for the project. By that time, the Innovation Center will already prove to be a stable and strong organisation. So, we will be able to raise venture capital on a larger scale than now.
I think that by that time we will be able to find other ways of raising funds for grant financing in addition to state budget funds. Probably, our former participants will make charitable contributions or our key partners will use some part of their revenues from the implementation of innovative achievements to invest into further development of the start-ups of the Innovation Center.
In other words, we still need to raise some more money for our start-ups, so that they could safely pass the so-called “valley of death.” Potential stability of the Innovation Centre will enable us to create additional grant financing sources. At present, however, we heavily depend on government support – the Skolkovo project itself is, in fact, a startup that has not passed the “valley of death” yet. So, termination of government financing can be critical now, but the more we develop, the more stable and stronger our position will be.
Question: What image-related advantages can the Skolkovo ecosystem gain after the adoption of the resolution to launch the Subprogramme?
Answer: We often talk about the fact that the public and civil servants, including inspection and supervisory authorities, do not always clearly understand what the Foundation was established for. Essentially, the adoption of the Subprogramme shows the Government’s attitude and expectations: the specific targets that we are expected to achieve by 2020. The Subprogramme defines where we are going and how much the Government is willing to allocate to support the movement in this direction. At present, our relations with the Government are very clearly delineated.
Question: What was the highlight of your Subprogramme creation process?
Answer: I was most vividly impressed by my cooperation with the key ministries – the Ministry of Finance and the Ministry for Economic Development. I found it interesting to receive feedback on the draft Subprogramme in terms of the Government’s vision of the development of the innovation system. From a customary business plan, it turned into the Government programme that evaluates its implementation effects on the entire national ecosystem. In other words, this concerns creation of a nation-wide means of innovation-based mobility that is so often talked about.