Opportunities in Russia
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Tekes facilitates international business operations and investments to Finland as a part of the Team Finland network.
We help in creating R&D and innovation cooperation between Russian and Finnish companies and research organisations. We supply information on current topics about Russia's innovation environment and about the changes in it.
Russia's economic growth reveals gaps in technological development that cannot be filled by domestic companies alone. Many goals set by modernization and innovation agenda in Russia - Strategy 2020, such as drastic improvements in energy intensity of GDP or labor productivity, are practically impossible to meet without cooperation with international industry leaders. This demand, matched with market and financial capabilities existing in Russia, create unique opportunity windows for Finnish industries and hi-tech SMEs. Cooperation with Russia may offer particular benefits for the latter, as competition is relatively low across many market sectors and partnership is supported by the trust in Finnish quality.
However, the needs of Russian customers and the country's operational environment differ from that in Finland. Therefore, products and business concepts must be thoroughly developed to fit domestic markets.
High energy intensity of GDP, low labor productivity, low life expectancy and demography figures – are major concerns of current Russian economy. Hence, the demand for modern technologies and expertise is mostly pronounced in sectors like: energy efficiency and energy saving; resource economy and waste recycling; construction industry; modernization of manufacturing industries and robotics; healthcare and medical diagnostics; biotech and cleantech; digitalization of public services and urban areas.
For growth-seeking Russian companies, Finland can be a channel to establish themselves in Western Europe and in global markets. Lately, Russian companies' interest in Finland has substantially strengthened thanks to the activities of universities, towns and cities, as well as providers of public support services for companies. Finland, being a pioneer in innovation, also interests those Russian authorities responsible for reforms in economy, legal and innovation systems.
Russia's innovation environment
In the past few years, Russian government has made significant investments in the development of innovation environment and improvement of business operating conditions for technology companies. Russia has speeded up research and innovation activities with the help of new national funding programs. University reform has also been launched to improve commercialisation of R&D projects outcomes and produce future technology entrepreneurs. Foreign companies have been invited to localize production in special economic zones, set up in different parts of the country.
These investments paid off with remarkable results, skyrocketing Russian venture market to the second place in Europe and fifth largest in the world in 2012, according to analytical data of international agencies.
Promoters of innovation in Russia
Skolkovo is Russia's novel innovation ecosystem concept (often dubbed "Russian Silicon Valley") created from scratch in 2010. Skolkovo concept is comprised of three elements: Skolkovo Foundation, providing non-dilutive financing for Russia-based hi-tech startups; Skolkovo graduate university of science and technology "SkolTech" and a land plot in Skolkovo region of Moscow where greenfield construction of hi-tech premises is taking place to host resident startups, the foundation and university campus starting from 2014-2015. This territory also has a status of a special economic zone, meaning significant tax benefits for resident companies, as well as funding opportunities and advisory from Skolkovo mentors. About 3 billion euros have been reserved by the government for the Skolkovo project development till 2020, and it is expected that private Skolkovo funding by that time will double public to reach as much as 7 bln euros. While still in development phase, Skolkovo project already counts more than 1000 resident startups split among 5 clusters: ICT, Biomed, Space, Energy and Nuclear, according to priority technology areas declared by the government. Regularly searching for the country's best startups, Skolkovo arranges annual Startup tour across Russia and runs Startup Village conference, which has become Russia's major international startup event.
From the very beginning, Skolkovo has a clear aim for becoming a global player and developing extensive international cooperation. Skolkovo collaboration span from MIT and Houston Technology center to partnership with global industry leaders, such as Microsoft, Nokia, Siemens, IMB, Dow Chemical, Boeing, EADS, Alstom and others that are expected to place their research centers in Skolkovo. Over 50 of major Russian and international VCs have been accredited as Skolkovo partners to co-invest in the resident startups. Skolkovo project has had a massive impact on Russian hi-tech venture capital market, skyrocketing Russian venture market to the 5th position in the world in 2012 (10x growth from 2008).
Finland is one of the most significant international partners for Skolkovo, with important agreements made with Startup Sauna, Tekes and Aalto University. Skolkovo regularly showcases its resident startups occupying the largest plot at renowned Slush conference in Helsinki. In the end of the last year Tekes has launched a co-funding program with Skolkovo Foundation, aiming to support collaborative projects between Finnish and Russian hi-tech companies. In course of the cooperation agreement Tekes has also placed a permanent office in Skolkovo technopark.
Foundation for Assistance to Small Innovative Enterprises (FASIE) provides is one of the oldest Russian innovation support institutions, established in 1994. FASIE is country's major agency that provides small-scale grant funding for early stage start-ups and university spin-off projects. The foundation provides grant support to about 1,500 Russian small innovative enterprises, annually. Over the years of operation, FASIE has received over 55,000 applications, financed 13,000 projects and contributed to creation of 4,500 startups. Tekes initiated cooperation with FASIE in 2011, running an annual joint call for proposals to finance innovative technology, product or service development projects between Finnish and Russian SMEs. In the call framework, Tekes provides grant co-funding to Finnish participants and FASIE – corresponding co-funding to Russian counterpart, engaged in a joint project. Over the course of the program 70 applications have been received and 20 supported for funding.
Calls for proposals will open annually on October 15th and close on February 15th.
Russian Venture Company (RVC)
RVC is a government fund of funds and a development institute of the Russian Federation, one of Russia's key tools in building national innovation ecosystem. RVC was established by Russian Government on June 7, 2006 with the mission to encourage Russian domestic VC industry and boost capital of VC funds. RVC's role is that of a government fund of venture capital funds channelling public incentives to venture capital and financial support to the hi-tech sector, and of a Russian VC industry development institution. An important area of RVC efforts is to create and support a special-purpose service infrastructure for VC market players, to increase transparency of investee funds and companies, to ensure enabling conditions in Russia for international investors and entrepreneurs and to optimize legislation affecting the development of innovative business. In the last few years RVC has played a pivotal role in development of Russian domestic VC industry.
Rusnano corporation (formerly Russian Corporation of Nanotechnologies) is a joint-stock company created by the government of Russia in 2007. Rusnano's task is to create by 2015 a nano-industry in the country that will make marketable products worth 900 billion rubles ($29 billion).
Rusnano provides equity investments (up to 50% co-investment) in later stage nanotechnology-related projects with substantial economic potential. In addition to supporting domestic nano-industry, Rusnano also seeks for nanotechnology transfer to Russia and invests capital in foreign companies. With this regard, Finnish Industry Investment Ltd and Rusnano came to an agreement in 2010 about an investment program in nanotechnology, allocating a total of 50 million euros for investments in Finnish and in Russian nanotech companies. Appraising Finnish nano-industry development level, Rusnano has invested 25 million euros in Beneq, the Finnish pioneer and world-leader in industrial production and laboratory equipment for nano-scale thin films and functional coatings. Another Rusnano signature investment Optogan (ultra-bright LEDs production) is known to start their company history at Micronova nanotechnology center, near Helsinki.
Reports and publications
Startup Village 2015 Technology Trends, Team Finland Future Watch Report, July 2015
Russia 360° Weak Signals, Team Finland Future Watch Report, January 2015 (pdf)
Russia Mobile Commerce Weak Signals, Team Finland Future Watch Report, January 2015 (pdf)
Russia Smart Cities & Internet of Things Weak Signals, Team Finland Future Watch Report, January 2015 (pdf)
Introduction to Deep Motivators & Consumer Roles in Russia, Team Finland Future Watch Report, November 2014 (pdf)
Deep Motivators & Consumer Roles in Russia, Team Finland Future Watch Report, June 2014 (slideshare)
Startup Village 2014 Tech Trends, 9/2014 (slideshare)
Startup Village highlighted hot tech trends in Russia
Advanced Manufacturing Russia, Team Finland Future Watch Report, August 2014 (pdf)
Future of Russian Middle Class, Report (2013, pdf)
Russian and global venture markets in 2007-2013 (2014, pdf)
Russian Innovation Strategy 2020 in brief (2012, pdf)
Research and Innovation Highlights in Russia (2012, pdf)
OC Technopark bld. 2
Skolkovo innovation center
Lugovaya str. 4
143026 Moscow, Russia
GSM +7 925 125 3414
pavel.cheshev (at) tekes.fi
Skolkovo and FASIE co-operation
Tel. +358 2950 55863
GSM +358 50 5577 863
pauli.noronen (at) tekes.fi
Villimiehenkatu 2 B
Tel. +358 2950 55211
GSM +358 400 359 222
sari.federley (at) tekes.fi