Creating a new center of innovation in Russia

February 25, 2010
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Russian President Dmitry Medvedev called on Russia's business leaders to contribute to the modernization of the economy and participate in the creation of a "city of the future" to spur on innovation in Russia, the Moscow Times reports. Medvedev chaired a meeting of the Commission for the Modernization and Technological Development of Russia’s Economy in Tomsk on February 12, where he met with leaders of the business community, including RusAl Chairman Viktor Vekselberg, Onexim Group Owner Mikhail Prokhorov, Rusnano Chief Anatoly Chubais and LUKoil CEO Vagit Alekperov.

In his opening remarks, President Medvedev addressed the need for investment in innovative technologies:

Over the years, all those present have taken several useful and appropriate steps, and for several years virtually every major company represented here has been engaged in the modernization of its production and acquired the necessary technology. In this way they have of course contributed to innovative development. This means that we are not starting from scratch.

But it is no secret that in most cases this involved the purchase and adaptation of foreign equipment and technology in almost every area. The growth of imports as an investment priority for large domestic companies has been inevitable in recent years, and for obvious reasons. Because of the absolute lack of infrastructure to ensure effective generation of ideas and their subsequent commercialization, that is to put them on the market, any other approach would simply have led to the complete technological and industrial insulation of both our country and your companies. And the result would have been the natural degradation of the economy.

But today we must create a fundamentally new sort of innovation by remembering the obvious: innovative procedures cannot be dictated by fiat. We must create conditions that are appropriate for them, and this Commission has been responsible for making such decisions.

He also recalled his initiative to create a Silicon Valley-like center for research and development, which would further aid innovation in Russia:

In my Address [to the Federal Assembly] I also talked about the need to create a powerful center for research and development in Russia and signed a relevant order on the subject. I would like the representatives of businesses present here to get involved in this work. A new innovation center is not, of course, a Silicon Valley, but it is still a prototype city of the future and should become a major testing ground for new economic policy. I would like us to discuss now and later on during our personal contacts, during your interaction with the Government Cabinet and the Executive Office, where such a city could be established, which principles could govern its financing, and which tax regimes could be applied so that it generates income and does not simply turn into something that exists merely on paper.

In Tomsk, Finance Minister Alexei Kudrin stated that modernization investments should reach at least 30 percent of Russia’s GDP, or 14 trillion rubles ($463 billion). Kudrin has recently emphasized that Russia’s modernization-through-innovation process needs to attract a great deal more investment as compared to the current 8 trillion rubles. Speaking on February 3 at Troika Dialog’s annual Russia Forum, the IHT reported that Kudrin:

announced that ministries and state companies will have to use more of their procurement budgets to buy products that qualify as “innovative” and that are made in Russia. According to Kudrin, only 15 percent of such procurement orders, which amount to a total of $133 billion, now go to Russian technology companies.

The Commission will decide on its support for a range of projects by May 2010.


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