“In three years we will have innovative collapse”

On December 13-14, 2010 there was held an All-Russian Innovation Forum "Russia, Forward!" at the Moscow School of Management “Scolkovo”. The 19^th conference of the Commission for Modernization and Technological Development of Russian Economy was held within the framework of the Forum, with Dmitry A. Medvedev, the Russian President, as its chairman. The Third All-Russia Innovation Youth Convent and other events also took place within the framework of the Forum.

Zurab Otarashvili, head of the RosNOU Innovation Department, a corresponding member of the International Information Academy and a Zvorykinsky project federal expert took part in the Forum. Mr.Otarashvili commented on the results of the meetings.

— I was one of the experts who assessed projects submitted for consideration of the Third All-Russia Innovation Youth Convent. It was a professional event. One of the aims of the event was to find scientific personnel for Scolkovo. There were three projects in each of eight nominations that reached the finals. The event was arranged extremely well. As far as the projects themselves are concerned I can hardly say that all of them were up to the mark. I would rather say there was a good deal of politics in many of them. Every region sought to push its projects through. It is a recent trend to be innovative. Nowadays it seems to be fashionable. Somehow or other the trend affected all of the projects. But still there were several interesting projects. I am sure that if the products presented in them were manufactured already and they could enter the market, they would have been in demand by the economy and consumers.

Unfortunately all scientific centers get less state funds because the lion’s share of finance goes to Scolkovo. There are plans to set up branches of Scolkovo in various regions of Russia and the idea looks very attractive for the senior officials of the regions that will be involved because they hope to get government financing. I think no one will get any money until the central project of Scolkovo is ready. Besides there will hardly be any competitive environment if we have branches of Scolkovo in every region of Russia. If we have a sensible CEO at the head office in Scolkovo, we might hope to get positive results. But what if there happens to be a mediocre supervisor there? This might turn out to be a failure for all of us because one can hardly hope for any scientific breakthrough if initiative is suppressed in regional branches. This will mean that we’ll get into a deadlock. It’ll be a disaster, I’m sure. I’m afraid not many people foresee this danger. Many region leaders want to reach their goals at the expense of the government financing and they will stop at nothing.

— The Forum participants commented a lot about some obvious systemic problems. The first problem is the lack of scientific personnel and experts. I don’t mean innovators. But there are not many of those who can travel a long way from the invention of something new to manufacturing a product and putting it into the market. It is not the responsibility of a researcher to draft a business plan. He is in no position to do any such thing because a business plan is outside his competence. As we all know perfectly well business plans under the circumstances are no good at all, because there are no reliable data of market investigation. Moreover, marketing requires a lot of money because it is very expensive. A researcher or an innovator would hardly have necessary resources and experience. The next glaring problem is the lack of professional teams of managers who would sell and put new products into the market. When everything is ready — a product, technical documentation, and a well-equipped plant – it is time to get into production and sell finished goods. The demand for such managers is great in Russia but we simply do not have such teams.

There is one more grave problem. Some people try to promote old projects disguising them as genuine and innovative ones. The real purpose of this is just to get access to government funds.

It is disappointing to see the same persons who take part in completely different projects; this project is no exception. It is just smoke and mirrors. Nevertheless, if you look at the matter from a different standpoint, there are many young people, including RosNOU graduates and some researchers from the “Zvorykinsky project”, who carried out scientific projects and presented them at the Forum. Young people in the regions demonstrate great enthusiasm for the work. Looking at those young people, I feel that I’m not wasting my efforts. That is where I drive my inspiration from and it is great. I think it is worth spending money and my time to help them. They are fresh, their goals are quite clear. They want to achieve success in their work and to create something that could make them and their country famous. Unfortunately they have to focus on the world market, not the Russian one because it does not actually exist. A researcher can hardly hope to make a lot of money if he focuses on the Russian market.

Taking Scolkovo as a whole, the idea of this university is attractive. It was built due to private investments and it is worth the money that has been invested. Education is set in English, and that surprised me, only foreigners seem to speak Russian there. It looks as if we don’t need the Russian language here in Russia any longer. The university is a closed community. There are classrooms, a hostel, and a swimming pool there. But I doubt that any of Scolkovo students would continue working in Russia after they graduate the university.

Scolkovo as a project can help these young people. We would like Scolkovo not be the only project of the sort, but we can only hope for the better. It is bad that there are no investments by our national companies in the project. It may only mean that business is not interested in such projects. Why not? The setting is very unfriendly for business in Russia. Take machinery, for example. Currently you can not buy necessary modern equipment in Russia. You can either use old-aged, made in the USSR machinery or even lend-leased, or buy it abroad. Russia does not provide with machinery. Those, who purchase equipment abroad, do not have the right to improve anything in it, only the producer is entitled to do it. After all, innovation is not only inventing something brand new, more that 95% of innovations mean the improvement of the things that already exist.

What is most striking is that the president was informed purely of the achievements, not a single word was said by the Forum participants about the lack of friendly business environment in Russia. The basis of such environment is financing. Many countries of the world have already had the experience: innovation companies are granted exemption from many taxes. They are subsidized just to make it possible for them to do research work. In our country, fiscal terms are the same for all companies no matter what type of business you have: selling tobacco, setting gaming machines or doing innovative research. It forces people to wriggle and sometimes even break the law. It is necessary to ask publicly Alexei Kudrin, the Minister of Finance and Deputy Prime Minister of Russia, and his team: how are you going to make innovations work? How can you motivate people? It is a social problem too. A boy finishes school, enrolls at a university, and he wonders: what to do and how to earn a living? He has new ideas and seeks to implement them, to bring them to the market…Meanwhile the time goes by: a year, two, three, five pass by. He is tired and at some point, he becomes cynical. Such generation we will have in a year or so, and I’m afraid this will result in innovative collapse.