People don't need unhealthy innovations

Innovations in Russian: auto-training instead of eliminating system errors
G.A.Yashina, "Capital of the country"

The topic of innovation has become a fashion trend, many forums and conferences are devoted to its comprehensive discussion. Participants of the conference "Technology Exchanges of Russia and the West: how to attract investment in Russian innovations?" also spoke about the problems of developing the innovation sector in Russia and attracting financing to innovative companies.

The exchange is a reliable way to investorsThe platform where investment demand and investment proposals meet is the stock exchange.

Vice-President of MICEX Gennady Margolit spoke about the experience of placing shares of innovative companies on the stock exchange. He honestly noted that the high–tech sector is still very modestly represented on the MICEX, and this is quite understandable, since the state of stock markets is a mirror image of the state of the economy - the Russian economy is still dominated by raw materials industries.

Nevertheless, the MICEX Innovation and Investment Market, a segment of the exchange specially created for innovation, has great potential. There are about 1,500 innovative companies in Moscow alone. It is expected that about 100-150 companies will be represented at the MICEX over the next 3-5 years.

Entering the stock exchange is associated with significant costs, the vice president of MICEX admitted, and the cost factor is especially critical for small companies. The amount of costs is inversely proportional to the size of transactions. MICEX is more accessible to Russian companies than foreign sites: access to it costs at least one and a half times cheaper for small companies than access to the London Stock Exchange, Gennady Margolit said. Artur Isaev, General Director of the Human Stem Cell Institute, who spoke later, noted that the costs of companies entering the stock exchange do not always have financial expression. In particular, for his company, entering the stock exchange was rather associated with a significant organizational restructuring.

An important advantage of MICEX over foreign platforms is Russian retail investors, who are already buying shares of high–tech companies today. But so far these companies are relatively small. Large high-tech companies with a name well known to the broad strata of the most active part of the population can count on a much wider range of investors, especially if they bet on exchange-traded, "high-tech" placements, including via the Internet.

The exchange serves as a kind of filter that allows you to identify companies that are interesting to investors. Only an open, transparent company has a chance to interest an investor. MICEX spends a lot of effort precisely to achieve the openness of Russian companies, the introduction of corporate governance standards. That is why additional requirements are put forward for innovative companies to disclose information, the institute of additional intermediaries – listing agents is used.

MICEX pays special attention to young companies, including those at the start-up stage. There is a separate, dedicated segment – an information board – that helps them meet with venture investors and prepare for public life.

Russian companies registered in a foreign jurisdiction can also place their assets on the MICEX, there are special tools for this.

Exchange as a driver for Hi-Tec companiesEntering the public market is one of the most powerful drivers of the development of the innovative direction, according to the head of JSC "ISKCH" Artur Isaev.

It allows not only to attract financial resources for the growth of the company, but also opens up many new opportunities – first of all, in communications. The company has relationships with a large number of very different groups: investors, partners, customers, etc. It is also important to inspire the company's employees, which arises after it acquires a new status. All this more than compensates for the financial and labor costs of the company associated with entering the stock exchange.

There is a potentially wide market for innovation in Russia, which can give a sufficiently large and steady increase in the capitalization of Hi-Tec companies in the long term. In addition, publicity is one of the tools to increase the efficiency of the company.

Global high-tech marketStanislav Martyushev, CEO of Interfax Business Service, presented a comparison of the liquidity and investor base of various exchange platforms and an analysis of investors' activities in the global high-tech market.

The subject of the study was the activity of 9.2 thousand companies of the "new economy". They belong to three key segments: information technology (6.2 thousand companies), healthcare (2.5 thousand companies), telecommunications sector (about 300 companies). A number of segments of the "new economy" in terms of invested funds already exceed the segments of the traditional economy. The undisputed leader – both in terms of investment volume and the number of investors – is the segment related to hardware. The second largest segment is pharmaceutical companies.

The segments of the "new economy" offer investors a much larger choice of young and high-growth companies. Investors are interested in investing in younger and dynamically developing companies. In terms of the amount of funds invested in the "new economy", the United States is leading, Big China is catching up with them. Russia ranks 31st in this indicator.

The structure of the investor base is very heterogeneous. 35% of investment funds work with all types of Hi-Tec companies, and 7% work with absolutely all sectors. There are also investors who invest only in one area.

For the Russian exchange practice, it is extremely necessary to create an index investment segment. It is necessary to create conditions for Hi-Tec companies to have not only composite indices, but also indices in separate sectors: separately for biotechnologies, separately for computer technologies, etc. – so that the share of index investors in the structure of the company's shareholder base increases. In Western practice, this share is about 20%. – that is, if there is no index segment of investment, the issuer loses a fifth of its shareholder base. Index investing is an important tool for attracting the attention of analysts and investors, Artur Isaev confirmed.

What innovations do we need and why?Innovations are necessary to increase labor productivity – without this, the economy cannot be competitive, said Ermolai Solzhenitsyn, Managing Director of the Moscow office of McKinsey & Company.

The main criterion for evaluating an innovation should be precisely how much it will increase the competitiveness of our economy.

Countries with a high level of GDP per capita spend a large share of GDP on R&D. When you are ahead, you need to invest more in R&D to maintain competitiveness, and when you are at lower stages, you can, in principle, adopt existing technologies in other countries. If Russia is in the BRIC group, then our competitiveness is determined by the degree of our development. Innovations for China, India, Brazil and Russia can be achieved not only through their own developments, but also through competent copying of what is in the world. If we can significantly improve the quality of life of the population by copying technology, then why don't we learn from the Chinese.

So far, Russia has a low level (absolute and relative) and the growth rate of exports of high-tech goods. In developed countries, the share of high–tech products in total exports is about 20%, in India and Brazil – 17-15%, in Russia - 4% (according to 2009). In absolute terms, India and Brazil export high-tech products about 2 times more than Russia.

According to McKinsey & Company, the primary task for us is to increase labor in traditional industries – including through the acquisition of foreign innovations. Their implementation is also an innovation. The ratio of licensed and proprietary technologies – innovative potential – is one of the main factors of wealth growth. It is closely related to gross national income (GNI) per capita. According to this indicator, it is impossible to skip over decades on a large-scale segment of the economy.

A high level of innovation development contributes to GDP growth. In the US, GDP growth of 50% is due to the level of innovation development – either the rapid introduction of best practices, or completely new technologies. They provide an increase in labor productivity and GDP by about 2% per year. In Russia, from 1998 to 2007, the economy grew very rapidly (7.4% per year). But this growth was due to factors that by 2007 they have already exhausted themselves: mainly due to the loading of existing capacities. Therefore, today it is innovation that is the key to growth opportunities for us.

However, it is necessary to decide where exactly we want to grow: in new segments that are not yet present in our economy, or where we have a distributed workforce. First of all, innovations should be developed and implemented in those industries that we already have. There is a huge potential for this.

It is also worth determining which innovation centers we need. Do we want to grow quickly and specialize in one area, or do we want to grow more slowly, but diversify, develop several areas and thereby increase the scale? It is logical for Russia to pay attention to the so–called "attacking" type of innovation centers - a kind of "ecosystem" with rapid growth based on new players in new sectors. In China and India, examples of such centers are most often foreign companies with R&D units. From the experience of Asian countries, such "attacking" centers are successfully developing as specialized ones.

When choosing a specialization segment, you should be guided primarily by domestic demand. In Russia, for example, construction and agriculture can become such a segment. No one in the West will buy a lot of Russian innovations until they have proven themselves commercially in Russia. This applies, for example, to the Russian aviation industry: no one will buy a Russian aircraft until it commercially proves itself within 3-4 years in the manufacturer's home market.

What is needed to create a good innovation climateAccording to Yermolai Solzhenitsyn's report, five elements are needed for this.

Their existence has been known since the early 1990s, he recalled.

• Infrastructure. High quality and well-thought-out structure of public use systems (telecommunications, transport, communal infrastructure).
• Availability of capital. Public and private sector financing. Venture capital and capital markets.
• Economic conditions. Efficiency of business processes, communications and legislation. Legislation and regulation in the field of business. Legislation in the field of intellectual property. Cluster development.
• Personnel reserve. High quality of the personnel base, availability of qualified specialists. An effective education system. Attractive conditions and legislation conducive to the immigration of qualified personnel.
• Domestic demand. Consumer literacy. Integrity of market participants. Procurement efficiency.

Russia has a huge talent pool, but its use is limited by a lack of capital and difficult business conditions. The question arises: is it possible to provide all these above conditions in a particular area and how much will this help in itself to replicate innovations and generate them in other segments?

Legislative support for innovationNot everything is going well in this area, Liana Pepelyaeva, Deputy Chairman of the State Duma Committee on the Financial Market, admitted.

However, a number of steps have been taken recently to improve the situation. In particular, we are talking about the regulation of exchange activities. At the end of January, the regulation on clearing activities was adopted. The bankruptcy system has been fundamentally changed. The law on insider activity has come into force. In addition, a lot of work is underway on the national payment system and in various areas related to the creation of a financial center in Russia. Unfortunately, the improvement of legislation is slower than we would like. Even the preparation of acts under the already existing law takes a very long time. For example, the Ministry of Economic Development is still preparing an act on subsidizing innovative companies when entering the stock exchange. After the successful placement of the company on the stock exchange, half of the funds spent on this will be returned to it from the state budget. It was expected that this act would be adopted at the end of January.

The main conditions for the emergence and development of innovative companiesThere should be a need for this," Yermolai Solzhenitsyn believes.

– This is both competition and the lack of other channels for solving their issues.

Innovations are not only institutions and the five factors listed above," Mikhail Abyzov, Chairman of the Board of Directors of RU–COM LLC, is convinced. Innovations are the state of society and the moods that are associated with them. Painstaking and very long-term work is needed to create a living environment for entrepreneurs with equal conditions. The main role is played by the quality of public administration. We need "smart" money and long-term investment logic. It is necessary to concentrate on domestic demand and "pluck the low-hanging fruits." A culture of serial entrepreneurship is needed. It is also important to foster tolerance for mistakes in society, so that the fear of failure is not so great and the desire to start a new business does not disappear. At the same time, everyone should do their job: the state should create a common climate, the private sector should create an ecosystem.

MICEX President Ruben Aganbegyan stated that it is very important that innovations in Russia become interesting to a wide range of the population. For example, in America, citizens worry about the fate of innovative companies, since they are their shareholders.

A holistic strategy of innovative development of the country is needed, Anatoly Chubais summed up. – The draft of this strategy is being developed by the Ministry of Economic Development.

What hinders the successful development of innovative companiesFor the development of innovations, it is necessary to identify and eliminate systemic problems that prevent the creation of a normal, transparent economy with free competition, the president of IBS Group Holding believes

Anatoly Karachinsky. We have always had innovative companies. The most successful of them appeared even before the innovation boom. It is very important to understand why there are so few of them, why most of them did not survive or moved to other countries to survive. In the state, no one is responsible for describing systemic problems and finding ways to solve them. We ourselves do not believe in the development of Russian innovations – it is not by chance that development institutions, such as RVC, invest huge funds in Western start-ups.

One of the key problems is unequal access to resources, the head of IBS Group Holding believes. Campaigns on the same market operate under different conditions: some pay taxes, others do not, some have access to financing, others do not, some have access to administrative resources, others do not. The McKinsey & Company consulting company mentioned this problem back in 1999 in a comprehensive study on the competitiveness of the Russian economy. Since then, this problem has not disappeared anywhere. Meanwhile, competition is possible only where everyone has equal conditions. Only then do innovations make sense.

Mikhail Abyzov, Chairman of the Board of Directors of RU-COM Group, considers the dominance of bureaucracy in Russian development institutions and the resulting distorted logic of investments to be a big disadvantage: on the one hand, the fear of risky investments, on the other – the ease of investing in uncontrolled projects. State–owned companies must compete with private entrepreneurs for obtaining state capital - this greatly increases the responsibility and efficiency of investments.

Anatoly Chubais, CEO of Rusnano, acknowledged that the tax code, corporate legislation, technical and environmental regulation, lack of competition, corruption and many other factors hinder innovation in Russia. However, despite this, dozens and hundreds of competitive innovative companies have already emerged in the country, whose products, among other things, are exported abroad.

Artur Isaev noted several problems of a less global nature:

• the complexity of evaluating innovative companies: there are no analysts and investors who were competent enough;
• lack of venture projects (there are practically none in the field of biotechnology).
• insufficient access to the information base. It is necessary to organize a dialogue between investors, shareholders and analysts.

Auto-training will not solve all the problemsOf course, success reports are needed – they inspire hope and keep the spirits up.

However, the problems that hinder Russian companies do not disappear anywhere. It is much more difficult to identify and eliminate them than to give some general recommendations for creating favorable conditions. And significant movement along this difficult and thorny path is not yet noticeable. The Digital October conference was another confirmation of this.

Interestingly, the development of science has been mentioned less and less recently in conversations and discussions about innovations. But it would seem that it is scientists who should generate innovative ideas. It seems that Russia's innovative development is turning to a cheaper way of copying other people's achievements – as McKinsey & Company advises. It may increase our well-being, but it is unlikely to radically improve the competitiveness of the economy.

Portal "Eternal youth" http://vechnayamolodost.ru28.03.2011