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What Moscow Innovators are Missing

This is a translation of the article originally published on August 6, which can be found at https://www.kommersant.ru/doc/3706603

Kommersant surveyed representatives of the business and expert community support the initiative to create a Moscow innovation super-cluster. According to Yevgeny Kuznetsov, head of Orbit Capital Partners and managing partner of a venture fund created in tandem with Rosatom, the development of technological entrepreneurship is hampered by the fact that the members of the community do not pool their efforts and do not have enough information about the support mechanism that are available. “A startup founded on a college campus has to search on its own for a place to put down roots when it loses ties to the academic environment — a source of inexpensive skilled labor — so its quality drops. At the same time, there’s already plenty of money in Moscow, including private capital that could be directed toward investment. The problem isn’t that we need more government financing and state programs (not that they’re all that effective to begin with); the problem is the lack of a comfortable environment based on trust. What we need isn’t new financial tools, but transparent rules that make it convenient to a) invest and b) scale and cultivate companies,” he says.

Historically Russian manufacturers have not been sufficiently competent when it comes to marketing and sales, says Yulia Rakova, marketing director of GetResponse Russia and member of the RSPP’s international collaboration committee. “Communication among government organizations within the cluster is crucial. For example, the Russian Export Center, which is willing to compensate companies for 70% of their patenting expenses, needs to be able to communicate with innovators, but the majority of innovators don’t even know that the initiative exists,” says Ms. Rakova. In addition to networking and training, the cluster can give its members access to the latest technologies in the field of digital transformation and automation, as well as international partners and investments. “Working with foreign investors and strategists can help Moscow manufacturers break into foreign markets as quickly and easily as possible,” suggests Ms. Rakova.

According to Ksenia Popova, senior consultant at the international consulting firm Odgers Berndtson, it is essential to attract a wide range of companies interested in developing new products to the cluster, help them combine their efforts into joint projects, and ensure that they are supported by existing tools on the state and federal level. Creating a unified ecosystem will facilitate the development of human potential and overcome the labor shortage. Ms. Popova believes that Russia needs another two million specialists, particularly those with the skills necessary to work with big data. “Specialists will exchange knowledge and experience and mentor their less experienced colleagues. This will help us build up a layer of skilled professionals many times more quickly,” she asserts.

Yevgeny Kuznetsov also suggests that a “regulatory sandbox” be created based on the cluster. “New technologies operate in a regulatory gray area. Unless we can proactively build bridges over this swamp, we’ll all drown. A new legal system is being developed in the world right now. Countries and cities are competing over the quality of their regulations in the field of innovation. Changing regulations on the national level is difficult, but creating pilot projects on the city level and legalizing technologies via deeper regulation within the framework of an innovation/manufacturing cluster is definitely the way to go,” says Mr. Kuznetsov.

“Switching to the principles of ‘Industry 4.0’ means changing business as a whole, as well as the principles of communication within business. We need to transition from vertical processes to a horizontal principle of interconnection among everyone who is developing innovative new technologies. That includes business, science, education, and government. In practice this means that scientists, universities, and entrepreneurs need to be unified in a shared environment. Russia is a large country, and right now tens of thousands of people are spread out all over Russia with no connection whatsoever between them. We need a platform that will allow a business to quickly find the scientist and available companies it needs, then send them an order via smart contract,” says Alexander Borodich, venture investor and founder of Universa Blockchain Platform.

Yevgenia Shamis, president of Sherpa S Pro, believes that creating a unified platform will not be enough: “It’ll need to be enlivened by communication. Its members should be living people who will talk to people and explain to them where to go and what to do.” Moreover, it will also be necessary to make them feel “comfortable and cared for” and assign a “comprehensible leader” to them with experience in entrepreneurship and state-owned enterprises, suggests Ms. Shamis.

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