Despite the turbulent economic situation, the Russian government will continue to support innovative startups, Deputy Prime Minister Arkady Dvorkovich told representatives of regional governments on Wednesday – but only if their ideas and products are competitive, and not just at the national level.
Deputy Prime Minister Arkady Dvorkovich speaking at Skolkovo on Wednesday. Photo: Sk.ru
The goal of the import substitution policy that the government has been pursuing since it banned most food imports from countries that sanctioned Russia over the Ukraine crisis is not just to replace foreign products that have disappeared from the shelves of Russian stores, said Dvorkovich.
“The point of import substitution is that it should eventually allow us to enter the international market,” he told an audience of officials responsible for the development of innovation in their regions, who were assembled at the Skolkovo Foundation for a conference devoted to efficient innovation ecosystems.
The deputy prime minister, a member of the foundation’s board of trustees, said that the Industry Development Foundation – set up in 2014 to grant loans to industrial and hi-tech startups – would support companies whose products were viable for export, but warned that they must be competitive.
“Sometimes companies need to be a little more modest in their desire to immediately recoup all their investment,” said Dvorkovich. “We have seen a lot of examples when open competitions are held for suppliers, and we are offered prices that are 40 or 50 percent higher than those available. [Entrepreneurs] need to be a little less greedy, at least in the first stage of their companies’ existence.”
Pekka Viljakainen, a Finnish entrepreneur and advisor to the president of the Skolkovo Foundation, echoed the deputy prime minister’s words on competitive products and business models.
“Of course it’s great that now Russia is more actively searching for products to replace imports,” he said. “But the [replacement] product cannot be less good. We have to be globally competitive… Despite all the politics and all the sanctions, the products and quality need to be the best in the world.”
Viljakainen said that while grant financing should not be decreased, it should primarily be given at the company’s early stage, and by the second or third year of their existence, they should be getting most of their financing from private investors.
“If there are entrepreneurs who think that to run a business is to have a grant from the Russian government – that a grant is the same as sales – then something is wrong,” he said.
Dvorkovich reassured the officials responsible for innovation in their regions that the current anti-crisis plan being devised by the government includes a “concrete plan to support hi-tech industries,” including car manufacturing, light industry, agriculture machine-building and other sectors.
“We will increase support for innovative projects under the National Technology Initiative [a program set up to support priority areas of technology] via the Bortnik Foundation [established up to help small hi-tech enterprises] and other foundations,” he added.
Addressing speculation in the media that some of the country’s innovations institutions – such as the Skolkovo Foundation, nanotechnology corporation Rusnano and the Russian Venture Company – would be closed or merged together, Dvorkovich said the government was currently assessing ways to improve their overall efficiency.
“There are various ideas for streamlining the work of institutes of development, for allocating specific functions to each one. Perhaps that will lead to some mergers, as right now some of their functions overlap. It’s important to clearly define the mission of each institute in Russia – and in each region – to be clear what we’re spending taxpayers’ money on,” said the deputy prime minister.
He said ways of expanding Skolkovo’s role to ensure the development of innovation in the regions was currently under discussion.
“There’s a proposal to give Skolkovo a coordinating role in the existing system of technoparks and other innovation platforms, for them to exchange experience and know what’s happening where, so that costs aren’t duplicated. Some regions have been proposed as branches of Skolkovo, while others want the same tax breaks as it offers [to its resident companies]. We are actively discussing this at a federal level and will of course discuss it with the regions, and hope to come to a decision in the next few months,” said Dvorkovich.