Yaroslavl Roadmap 10-15-20Presentation by

Daniel Satinsky Partner, Russia Innovation Collaborative

www.russiainnovation.comdsatinsky@russiainnovation.com

MGIMOSeptember 14, 2010

Preparation of Yaroslavl Roadmap

• Sponsor New York Academy of Sciences (www.nyas.org)

• Prepared for Global Policy Forum in Yaroslavl.• Methodology of Yaroslavl Roadmap

Goal of Yaroslavl Roadmap

• Goal

• Structure of Report

• Name

General Conclusions

• Government is critical actor in creating innovation economy.

• Different countries had different paths, but all require strong science, entrepreneurs and integration in world markets.

• Constructing an innovation economy is a process requiring long-term commitment. It is not achieving a one-time goal.

• Government policies are national, but development of innovation is local.

Difference between Modernization and Innovation

• Modernization is the utilization of best available technology and techniques of management.

• Innovation is a new way of doing things or a disruptive technology.

• Modernization is a very broad process spanning the economy, government and society.

• Innovation is usually initiated by individuals or small groups, not be large institutions – government or business.

Innovation Ecosystems

Academic Excellence

Innovation Ecosystem

Venture Capital

Thriving knowledge based sectors

Tech transfer and commercializationSerial

Entrepreneurs

Public and Seed Funding, grants and

loans

Innovation Ecosystems

Innovation Ecosystems are the foundations that support all knowledge-based activity:

Government / Policy

Russian Tech Strengths

• Strong intellectual resources in basic science and mathematics.

• Sector strengths in space, atomic energy and weapons.

• Little or no spillover into domestic market from technology in areas of sector strength through spinoffs or startup businesses.

Institutions

• Some of the institutional pieces of an innovation ecosystem have been constructed, i.e. Government funds like Rusnano and RVC; tech parks, incubators and SEZs; university commercialization offices; Skolkovo Foundation, etc.

• All recent and still developing. Not yet a system, but separate institutions and with significant gaps.

Key Indicator of “Gaps”

• Investors commonly state that there are no projects in which they can invest in Russia.

• This really means that there are few projects that exist in the form and scale to allow for investment.

• Points to a gap in the innovation system commonly referred to as the “valley of death.”

Valley of Death

• Time it takes to move from a good idea to a product that is proven and that has a demonstrated market demand, usually expressed in a coherent business plan.

• Requires proof of concept, refinement, adjustment, testing, etc.

• However long a period of time this takes, entrepreneurs need support and money to live through the valley of death.

Support for Entrepreneurship

• Initial funding – family, friends and fools.• Secondary funding – angel investors and

venture capitalists.• Professional support – knowledgeable

lawyers, accountants, marketing specialists.• Entrepreneurial community – serial

entrepreneurs and mentors.• All are lacking or in short supply in Russia!

Culture of Entrepreneurship

• Innovation ecosystem is a set of relationships between entrepreneurs and institutions, not a place, not a set of laws and not a set of institutions.

• Critical to its proper functioning is that there is a culture of entrepreneurship that is valued in society – acceptance of risk and failure, trust between entrepreneurs and institutions, success stories of reward for hard work.

Summary

• Must be long-term government commitment that is accepted by society.

• Must continue to support basic science and education.• Must both integrate into international markets and boost

demand for innovation in domestic market.• Accept regional differences and look for sectors and regions

where Russia has competitive advantage to become leader, not rapid follower.

• Government (Federal, Regional and Local) at initial stage must compensate for existing gaps in innovation system.

• The culture of entrepreneurship needs support and development.

Conclusion

• Repeat that purpose of Yaroslavl Roadmap is not to lecture, but to promote real discussion through showing comparisons and concrete proposals.

• The fate of Russian efforts to diversify the economy and to become an innovation economy is in the hands of Russians, particularly your generation.

• As such, I look forward to your questions, comments and criticisms.

Daniel Satinsky, PartnerRussia Innovation Collaborative

dsatinsky@russiainnovation.com