091001 spb innovation week - 10 threats to innovation businesses in russia
TRANSCRIPT
![Page 1: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/1.jpg)
10 threatsfor innovations in Russia
Ilya PonomarevState Duma – Russia Parliament
St. Petersburg, October 1st, 2009 г.
![Page 2: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/2.jpg)
10. Inconvenient legislation Incompatible with usual approach legal acts:
VC regulations No LLP form VC funds in Russia are regulated as mutual
funds Corporate legislation Technology transfer act
Acts where bad wording leaves room for unfavorable misinterpretation Software VAT exemption act Privacy protection act
Legislation that requires amendments in new economy environment Civil Code
Internet crime liability definition IP rights protection
State procurement act Bankruptcy regulations e-Payment systems Miscellaneous industry-specific acts (telecom,
advertisement, mass-media, …)
![Page 3: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/3.jpg)
9. Corruption
Inequality between large corporations and start-ups when dealing with state agencies Getting approvals Response time Police abuse Access to contracts
Widening gap between society and the government makes civil agreements invalid
![Page 4: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/4.jpg)
8. International competition
Low productivity in Russian economy drives up costs even for effective businesses Higher wages decrease
competitiveness Brain drain Russian authorities do not
help national producers to compete internationally No offset deals No technology brokers (or
export support agencies)
![Page 5: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/5.jpg)
7. Bad Russia’s image
Russia is not associated with quality products, even less with technology intensive products
Russia is perceived as an unreliable and unpredictable partner
Civil society and democratic institutions crisis, decreased trust in national leadership scares investors
![Page 6: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/6.jpg)
6. Infrastructure
Lack and expensiveness of modern business infrastructure Office premises Telecom Financial instruments
Debt financing is expensive and hard to negotiate
Excessive concentration of business activity in Moscow, colonial policies towards other regions
Low quality of life Housing and utilities deterioration Soviet education system collapse Urban planning traditions of the past
outlived themselves
![Page 7: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/7.jpg)
5. Inadequate institutions
No unified management of economy modernization at the executive level
Poor investments environment No traditional exits
No technology IPOs No strategic investors
VC funding is undeveloped State institutions (Rusnano, RVC)
cannot replace working market Gap between universities, R&D
and businesses State funding has not reached the
point of influencing or just supporting innovation businesses
![Page 8: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/8.jpg)
4. Resistance of the elites
Russian elites do not have long-term plans in Russia They tend to diversify outside
Russia They want to live in Western
consumer society, but get their easy dollars in Russian regions
Personal wealth is fully dependent on natural resources
Any type of social innovation threatens stability of existing “sovereign” political and governing system
![Page 9: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/9.jpg)
3. Business climate
Outrageous court and police system
Unsecure situation with private property protection Investing in Russian assets
looks risky Customs Tax collectors either do not
know specifics of hi-tech businesses, or consciously abuse innovators
Extremely long time to get required decisions and approvals from any state agency
![Page 10: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/10.jpg)
2. Structure of Russian economy At the current economy conditions
hi-tech businesses present higher risks with at least uncertain return, compared to natural resources and other “traditional” enterprises
Chosen way to privatize created large “cash cow” corporations with low debt and virtually unlimited resources, creating unfair competition with any new companies and demotivating managers to improve productivity
Tax code favors industries with higher revenues and lower added value
Limited demand for Russian-made technologies
![Page 11: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/11.jpg)
1. Deficit of human resources
No entrepreneurs, even less – serial experienced entrepreneurs
No success stories to follow No adequate business
schools No professors with first-hand
experience Lack of international business
experience and proper connections Language barrier
Demographic crisis
![Page 12: 091001 SPb Innovation Week - 10 threats to innovation businesses in Russia](https://reader035.vdocument.in/reader035/viewer/2022070322/55931da51a28ab9a5c8b4727/html5/thumbnails/12.jpg)
…But we are still the smartest,
so we’d definitely make it!
…But we are still the smartest,
so we’d definitely make it!