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5 Feb, 2010 16:50

Innovations to unite government and businesses in Russia

Russia’s government says it has been generous to big businesses. Now it wants help and its contributions to be returned, with innovation projects in focus.

In the times of trouble last year, Russia's state spent huge amounts of money in saving big private businesses from going bust. As President Medvedev says, now it’s time for payback.

“Last year the government supported big companies, many in the raw materials sector. We had to spend substantial state reserves accumulated during the pre-crises period. These companies have not only kept their assets, but also increased them. Therefore, the state has the right to count on these companies to be involved in investment projects and help modernize the economy.”

Modernizing the economy will require costly research, investment and acquisitions, often with only a distant prospect of making a profit. Inevitably, business needs centralized help to achieve this collective goal, and the state-run company Rosnano is at the centre of coordinating the effort in Russia.

Anatoly Chubais, the company’s CEO, says they are now focused on the documentation that will make it easier for international cooperation in the sector.

“We are in dialogue with companies dealing with innovations and they complain first and foremost about the import-export hurdles they face. We have drafted the document that gives a green light to innovative products. The second document will touch upon the changes in the tax regime with regards to knowledge-based companies. It will be submitted by the end of February.”

Rosnano has already got 64 projects in its portfolio with a total investment of $6.5 billion.

One company that has a joint project with Rosnano is Sitronics, the country's largest microchip producer, with its president Sergey Aslanian adding that the work on closer cooperation with Russia’s government and businesses is already underway.

“The government is taking practical steps in order to create an ecosystem that will allow not only the government to invest in high tech, but also the big businesses.”

Rosnano's chief says the technological gap between Russia and developed countries is roughly 40 years, but with Russia's rich tradition in science, combined with more liberal economics and the political will – it is a gap that is being bridged.