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Dialogue between Business and Development Institutions: Dedication, Trust, Effectiveness

May 29, 2017, 18:59 UTC+3
1 pages in this article

Russia has created a number of federal and regional development institutions. While focussed on a variety of market segments, industries and business models, they all share a common goal of financial support to upgrading the national economy and entering high-tech markets. Achieving this goal hinges on both structuring the support framework and making businesses aware of available resources.

Each development institution works hard to provide financial and other assistance to industry leaders and smaller but promising market players.

  • VEB, Russia's development bank, is reinventing itself to focus on supporting major companies, including real economy sectors, and promoting innovation. The newly revamped VEB Innovation division will be in charge of the National Technology Initiative.
  • The Russian Export Centre is spearheading the government-backed efforts to promote Russian businesses on the global arena. Last year, the Centre provided direct support for exporting USD 8.9 billion worth of value-added products and services. In 2017, this amount is expected to reach USD 20.3 billion.
  • The Industrial Development Fund is in charge of innovative and import substitution industrial projects. In its first 18 months of operation, it has provided support to 130 projects that brought in RUB 108 billion for the real economy in the form of private investments and helped launch 18 new production facilities. This year, the Fund is focussing on engineering and machine-tools, metals and steel, and biopharmaceuticals.
  • The Far East Development Fund is focussed on supporting infrastructure development, small and medium business and innovation throughout the region.
  • Rusnano is pushing forward and expanding the scope of its activities. This will include wind farms, waste-to-energy, flex circuits, industrial energy storage and nanomodified materials.
  • The Russian Venture Company (RVC) supports venture capitalists by creating PPP projects and foundations. Last year it provided support to 34 projects worth RUB 2.6 billion. Most of them were related to medical technology, pharmaceuticals, IT, and energy sector. Another important mission of RVC is project office support to the National Technology Initiative.
  • The Skolkovo Foundation's mission goes beyond financial grants and covers a wide variety of services offered to stakeholders and partners. It is also involved in projects funded by the RVC. In particular, it is working on a new joint foundation for two different development institutions.
  • The MSP Corporation provides financial and operational support to small and medium businesses, expanding their opportunities to enter into procurement contracts with the Government and state-controlled companies.

Originally many of the existing development institutions were established to address highly specific issues typical of certain segments, industries or businesses.

  • The latest presidential address to the Federal Assembly has re-stated their goal as providing financial support for upgrading the national economy and entering high-tech markets.

Yet, according to the 2016 data collected by the Russian Union of Industrialists and Entrepreneurs, three out of four Russian businesses never used government-sponsored support schemes. Moreover, 25% to 50% never heard of them, and another 30% to 40% are only vaguely aware of their existence.

  • Now, Russia has two operating digital information resource centres: the National Industry Information System (sponsored by the Industrial Development Fund) and the Business Navigator (sponsored by the MSP Corporation).
  • Creating a shared platform that would provide business with comprehensive information on all government support options may greatly improve the efficiency and performance of the national business development policy.
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