11 September 2023

Technological Development in Russia: Shifting the Focus from Catching Up to Overtaking

KEY CONCLUSIONS

Russia needs to make products that can compete in the global market in terms of consumer value

“The USSR did not produce competitive global technological products. So now, when we talk about technological breakthroughs, I think that we don’t need to look in the rearview mirror so much. <...> Modern technologies are, primarily, market goods. They work and are developed only if someone needs them and pays money for them. Russia is in a somewhat dangerous situation here. We are too big, rich, and self-sufficient to be focused only on exports... but at the same time, our domestic market is not large enough to pull out new breakthrough global technologies only at the expense of domestic demand – we need to compete and sell to the world,” said Alexey Chekunkov, Minister of the Russian Federation for the Development of the Far East and the Arctic.

“We are betting on Russian fundamental technologies. <...> It is good to talk about the market value of Russian technological solutions, but we should not forget that the Americans and the Chinese are incentivizing this [production at home Ed.] in an incredible way. The Americans have an infinite amount of money, they can print as much of it as they want. China has an almost infinite population; they can test their products on the domestic market. If we want to compete with them, our products must be better not in terms of marketing, but in terms of their fundamental value to consumers,” said Dmitry Peskov, Head of Young Professionals Direction, Agency for Strategic Initiatives to Promote New Projects; General Director, Platform of the National Technology Initiative; Special Representative of the President of the Russian Federation on Digital and Technological Development.

 

PROBLEM

Developing technological products requires competitive conditions on the global market

“Thanks to development institutions such as Skolkovo and ASI, we have achieved good technological development and import substitution. Now the main issue is the development of markets, i.e. adjusting the markets to the growing technology companies, creating competitive conditions for their products in order to make a proposal, including the creation of a mechanism such as forward contracts from federal executive bodies and state corporations. The second thing is the development of foreign markets. We have lost too many markets, and we certainly need them for technology. Cutting-edge technologies cannot live within the boundaries of one country, so we need to learn from others, and the state needs to help us, for example, in subsidizing participation in international tenders, in the widespread use of offset agreements, i.e. those mechanisms that exist in the world to expand foreign exports. All of them are necessary, otherwise cutting-edge technologies, no matter how smart we are, will not be able to last long,” said Vladislav Ivanenko, General Director, SPUTNIX.

“If we talk about today’s barriers and challenges, the inability to use previously available technologies and work with engineering and design contractors indicates that we need to learn how to ‘land’ technologies ourselves. We have almost no experience of this in our country. For chemistry and petrochemistry, the issue of precise and technologically sophisticated equipment is important – this is still in short supply in the country,” said Pavel Lyakhovich, Member of the Management Board, Executive Director, SIBUR LLC.

“We are so weak in terms of marketing compared to the Western market that we should not expect to find a thousand marketing specialists for a thousand startups. We will find thousands of technologists and engineers, but we will not find marketing experts. There should be platforms that will help to open up avenues for promotion... because this is the weakest point when creating a product,” said Ruslan Yunusov, Co-founder, Russian Quantum Center.

“There is money in the market, there is a desire among private retailers to invest in venture, but there are no mechanisms. We have a venture ecosystem consisting of several things: financing, innovation, capitalization. <...> There is a need for some sort of tax breaks from the government on the money that corporate business and private business invests in venture funds,” said Ruslan Sarkisov, General Partner, Voskhod Venture Capital.

 

SOLUTION

Boosting funding for science-driven projects

“As for satellites, they are good tools for obtaining quality space data. Without space data there is no economy. The economy is growing, so satellite constellations must grow. We believe that we need several thousand satellites for our economy and for the world. <...> There are now huge opportunities for the application of [satellites Ed.]. <...> If we are talking about serial production, we have the ability to produce more than 100 satellites per year. For example, this year we will launch about 80 satellites,” said Vladislav Ivanenko, General Director, SPUTNIX.

“We have now started to look less exclusively at the business model. <...> It is important to finance projects that have some kind of technology, technological solution, an IT core at the heart of their competitiveness. <...> In the long term, I consider the financing of knowledge-intensive projects in industries such as unmanned systems, space technologies, and biotech as areas for venture funds. I would like to see more funds appear that invest not only in IT... but also in projects focused on deep technologies,” said Ruslan Sarkisov, General Partner, Voskhod Venture Capital.

 

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en

 

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