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Major industrial enterprises categorically refused to change their organizational structures, management systems, and technological cycles, and as a result their products could not compete with foreign analogues in terms of price and quality. Despite the enormous number of brilliant scientific ideas that have been generated in research institutions, there were no promising technologies or developments that could be quickly produced and marketed in product form. As for the small businesses that emerged in the late 1980s and early 1990s, they were generally structures without their own facilities and equipment, completely dependent on their landlords.

In recent years, Russian entrepreneurs have gained a much better understanding of the requirements of potential investors and have made more sober assessments of their proposals and capabilities. But unfortunately, along with greater understanding of the situation among potential participants in the investment process, new problems have appeared in all segments of the innovation chain. Material resources have been exhausted, equipment has become outdated, facilities have fallen into disrepair, and financial reserves have been completely drained. The technological foundation laid in Soviet times was largely exhausted (some ideas and developments became obsolete, while the developers of others either emigrated or shifted to different sectors of the economy), with very weak efforts being made to restore and augment it.

Regarding Snezhinsk, at first all activities concerned with international relations were generally concentrated at the city-forming enterprise. The main reason for this could be found in the special regime and the undeveloped city infrastructure, which in the past mainly fulfilled the function of supporting the operations of the city-forming enterprise. In the early 1990s the city became responsible for social issues, public utilities, and other matters, and a growing number of enterprises involving private capital began to appear, with most of them providing intermediary or retail and wholesale trade services.

Only recently has some progress been seen in the development of small businesses using conversion technologies and developments. This process has been facilitated by the city administration's policies in support of new production facilities and by the substantial increase in the number of entrepreneurs owing to job cuts at the city's main enterprise. The period from 1998 through 2000 saw the appearance of a new source of investments in innovation-oriented business in Snezhinsk, namely foreign investments. The Nuclear Cities Initiative (NCI) is the main investor in Snezhinsk in this sphere.

A program for the accelerated creation of new jobs in Snezhinsk has been established under NCI auspices.

Table 1 provides brief information on projects proposed for implementation under the NCI framework in accordance with Article 2 of the agreement.

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