Government encouraging innovative business growth
The government has raised its financial support of the small and medium size business sector 16 times in the last 5 years and is looking to boost innovative entrepreneurship.
However, the figure still only stands at $800 million annually, which is not particularly impressive given that the sector is intended to account for 40% of GDP by 2020. Also, the government will only open the purse if the business can show it's an innovative enterprise, says Andrey Sharov, Head of Small and Medium Entrepreneurship at the Economic Development Ministry.
“We see a growing number of small businesses. There are new ones launching and the established firms diversifying into new areas. Our goal is to see a six fold growth in innovative small companies in 3 years. An innovative company is one which owns intellectual property or produces goods that are unique in the world.”
That definition of "Innovation" has cut off government assistance from many businesses which although working in hi-tech, are not doing anything particularly unique, says entrepreneur Dmitry Birman
“If it's about stem cells it obvious that it's innovation, but if we have some technical upgrade that allows the doubling of speed of the main processes on a chip board – that is not considered innovation. The definition of what is innovation is still an issue.”
And it's not the only issue – high rent, the difficulty with securing a patent, corruption and a limping system of public purchase is a heavy burden for small business.
So while there is support for some entrepreneurs, the rest are saying if the government can't help, the least it can do is create a level playing field, then get out of the way.