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Activities of the Obninsk City
Administration Aimed at Supporting Small Innovative Firms
Igor M.Mironov *
Obninsk City Administration
CURRENTSTATE OF SMALL- AND MEDIUM-SIZED
ENTERPRISES IN OBNINSK
A total of 3,937 small businesses are registered in the city of
Obninsk, accounting for 85 percent of the total number of all
registered enterprises and organizations. The number of small
enterprises that are actually operating is 1,228. The principal
types of activities in which these firms are involved may be
broken down as follows:
Some 17 percent are involved in manufacturing,
including the hightech sector.
A total of 11 percent are engaged in construction
work.
About 3 percent provide transportation and
communications services.
More than 40 percent are involved in retail or
wholesale trade or food service.
The small businesses of the city employ about 19,000 people, or
38 percent of the total working population. The charter-defined
activities of 350 small firms (10 percent of all such
enterprises) involve the scientific-technical innovation sphere.
The number of small companies actually operating in the
high-tech innovation area can be estimated as approximately 30
to 40. About 42 percent of all income from the sale of goods and
services is earned by small businesses, and these enterprises
provide about 30 percent of all city budget revenues.
* Translated from the Russian by Kelly
Robbins.
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INFRASTRUCTURE FOR SMALL BUSINESSSUPPORT IN OBNINSK
The existing city system for the support and development of small business includes a number of structures capable of rendering a wide range of services. Obviously there are also other structures in the city that support start-up companies. The organizations that I mention here are those that belong to the Regional Innovative Technology Center (RITC) consortium. RITC enterprises cover practically the whole range of city needs for innovation services. Any missing elements will be created or strengthened in the future. In particular this can be done using funds from the Obninsk science city program.
In addition the Obninsk Center for Science and Technology (OCST) has been established by the Obninsk City Administration and all city research institutes to assist in integrating the capabilities and efforts of the institutes on matters regarding technology commercialization. The center also helps resolve similar problems for small enterprises, including by representing their abilities at various exhibitions within the framework of unified citywide displays. It should be noted that creation of the innovation infrastructure is one of the key elements of the Program for the Development of Obninsk as a Science City. This process is aimed at developing the existing infrastructure, creating new elements, and integrating them into a unified and coordinated system for innovation activity support.
Meanwhile, the Obninsk Chamber of Commerce, which has a cooperative agreement with the city administration, lobbies for the interests of business and promotes the development of the business support infrastructure, thus fulfilling its primary ideological objective of serving as a link between entrepreneurs and the city authorities. Near-term plans call for establishing a system under the chamber's auspices for representing the interests of small innovative firms and integrating their public affairs activities.
ACTIVITIES OF THE CITY ADMINISTRATION IN SUPPORT OF SMALL INNOVATIVEBUSINESSES
First of all, I would like to note that all city administration activities in support of small innovative businesses were undertaken by the previous team, which was headed by former Mayor Mikhail Vladimirovich Shubin.
Credit and Financial Support
In November 1992 the Fund for the Support of Small Business was established by the city administration. According to the Federal Law on
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State Support for Small Business in the Russian Federation, the fund
is a nonprofit organization that provides funding to implement city
administration policies in the area of business support and
development.
The Obninsk City Administration is the founder of the fund, the main
objective of which involves financing projects for small business in
Obninsk. This financing is made in the form of loans of up to 250,000
rubles for up to one year at annual interest rates of 10–15
percent. Over the past nine years, more than 90 projects have been
financed for a total of more than 3.5 million rubles.
The fund can render support both by direct credit in the form of
preferential loans and by guarantees provided at the time the
recipient obtains credit through another lending institution. In this
manner the fund provides a guarantee if the borrower lacks sufficient
collateral. To date, the fund has already provided four such loan
guarantees. The practice of giving guarantees has recently been
successfully introduced in collaboration with Sberbank. In 1999, three
guarantees were given to the Obninsk branch of Sberbank for project
loans, including to enterprises in the scientific-technical sphere.
Preferential loans are the most common way in which the fund provides
financial support. While the average interest rate for loans in
Obninsk banks is 25–30 percent, the fund grants loans at
10–15 percent. The lowest rate is applied for projects in which
the funds are to be used for industrial development and equipment
purchases as well as projects of high social and innovation
significance. Preferential loans are granted both on a competitive
basis and in the course of normal operational activity. Competitions
are held at least twice a year. The last was held in August 2001, with
four projects receiving financial support in the total amount of
850,000 rubles.
Unfortunately the city cannot afford to invest directly in high-tech
production projects, no matter how significant they may be to us. In
particular the city administration's Fund for the Support of Small
Business is currently stepping back from the practice of operating as
a financial structure. The reorganization of the fund is intended to
create a guarantee fund that would provide collateral for bank loans
granted to projects on a competitive basis. In addition the fund is
expanding its activities in providing various types of consulting and
information support services to small companies. Such support for
enterprises is the most effective and is becoming a regular element of
the existing infrastructure for investment activities.
To make our city truly attractive for investments, we are using our
main advantages, namely our highly qualified labor force and its
intellectual potential, innovation opportunities primarily in
high-tech products, and the availability of the principal institutions
of the market economy. However, the imperfection of the current
Russian tax system is hindering
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active investment activity. At the same time, effective development of
the manufacturing and innovation spheres is impossible without
creating favorable conditions for attracting investments. This task is
one of the most important in the Program for the Development of
Obninsk as a Science City. It involves a number of measures for the
support of investment activity to be undertaken at the city level,
specifically in the area of providing appropriate laws and
regulations.
Legal and Regulatory Support for Small
Business
Temporary Resolutions on Support for
Investment Activity and on the Investment Council
The Program for the Development of Obninsk as a Science City
includes measures aimed at developing legal and regulatory
documents determining procedures for investment activity and
outlining a system of incentives and guarantees for investments
in Obninsk. In conjunction with these measures, the Resolution
on Support for Investment Activity in the City of Obninsk was
adopted. It establishes tax benefits for legal entities that
invest in the development and expansion of their own enterprises
and create new jobs. The tax burden on these enterprises is cut
almost in half by exempting them from taxes paid directly to the
local government. However, under the new Russian Tax Code that
went into effect on January 1, 2001, the tax for housing stock
maintenance and the social infrastructure as well as the value
added tax are no longer considered local taxes. Therefore, the
city can no longer create incentives in the form of exemptions
on these particular taxes.
The Obninsk Investment Council was formed as another element of
the development program. Chaired by the mayor, its membership
includes representatives from the public and private sectors of
the economy. The investment council was established in 1999 to
develop and implement investment policy in the city. It makes
decisions on granting tax incentives according to the Temporary
Resolution on Support for Investment Activity and supervises
implementation of city investment projects and application of
incentives for investors. Three main areas of the investment
council's activities should be specially noted in addition
to those listed in the resolution: marketing and promoting the
city, developing the technology for working with investors, and
taking measures to improve the business image of the city.
Obninsk actively strives to establish good business contacts at
all levels. This is illustrated by constant visits by foreign
guests and representatives of Russian business circles; by the
special attitude towards Obninsk taken by various foundations,
in particular the Eurasia Foundation; and by the support
provided to Obninsk by the Tacis Program.
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As previously mentioned, when the second part of the new tax code and
a number of laws on taxes and revenues went into effect on January 1,
2001, the value-added tax and the tax for housing stock and social
infrastructure were no longer considered local taxes. Therefore, the
city could no longer institute preferential rates or exemptions on
these taxes. As a result, changes were made in the Resolution on
Support for Investment Activity. The resolution might now be somewhat
less attractive to enterprises, although preferential rates are still
in effect for certain substantial taxes, including property tax and
income tax. In addition, as a result of elections, the city leadership
changed in March 2001. The composition of the investment council is
therefore under review, with the new membership expected to be
confirmed by the Obninsk City Council and begin work in the near
future.
Other Legal and Regulatory Documents
At present, efforts are being made under the auspices of the
program to improve city laws and regulations regarding land use and
construction. A decision was made to prepare sites for construction
and determine their necessary technical parameters. Potential
investors will be able to inspect the sites to determine their
attractiveness. Resolving issues connected with real estate and
other property will represent another incentive in attracting
investors.
Support for Small Innovative Enterprises
Under the Comprehensive Small Business Support Program
In 1998 the city administration together with the Chamber of
Commerce and a number of innovation infrastructure companies
developed the Small Business Support Program in Obninsk. The
program was largely oriented to the priorities of the Program for
the Development of Obninsk as a Science City, which was being
developed at that time. Therefore, once the Science City Program
was launched, there was no further need for the Small Business
Support Program, and its planned activities were taken over by the
Science City Program.
RESULTS OF CITY GOVERNMENT SUPPORT FOR SMALL
INNOVATIVE BUSINESSES
Results of Legal and Regulatory Affairs
Support
In accordance with the Temporary Resolution on Support for
Investment Activity and the decision of the Investment Council
of Obninsk, tax agreements were concluded with three city
companies in 2000. Two of the
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companies are currently making use of the agreements, while the third
enterprise is just starting its operations and will receive the tax
benefits as soon as it receives investment capital.
Example
The support given to the Rastr-Technology company can be considered
successful, although the incentives themselves did not play a
significant role in the company's expansion and development.
The enterprise's success was due to its long and painstaking
work with its partner and the scrupulous fulfillment of its
commitments. As a result, in the initial phase of project
implementation, the enterprise already saw its cash flow
significantly exceeding planned levels. However, it was the city
administration's policy of supporting small innovative
businesses, its efforts to assist firms, and its favorable attitude
towards business development that attracted Rastr-Technology to
Obninsk. The example of this firm shows that Obninsk's status
as a science city (“intelligent” business, a
highly-skilled workforce) plays a substantial role in attracting
small business and investments to the city.
Successes
Rastr-Technology works in cooperation with the large
state enterprise Technology in replacing foreign
nonmetallic materials with Russian ones in the
production of forms for the packaging and printing
industries, thus taking advantage of the scientific and
industrial potential of Obninsk.
By using its experience in developing packaging
materials, including those intended for use with unique
made-to-order scientific instruments, the company
facilitates small shipments for other local firms,
which in turn helps these firms get their products to
the market, as packaging plays one of the key roles in
product promotion.
The company chose to locate in Obninsk because of its
science city status, as well as the possibility of
hiring highly qualified specialists and the
availability of tax incentives. The company provides
staff development opportunities, attracts young
workers, and keeps people from leaving the city for
jobs elsewhere. At any given time, Rastr-Technology
hosts five or six students from Obninsk universities
for practical training and internships.
Problems Currently Faced by the
Enterprise
High import duties for technological equipment
Customs delays in importing raw materials and other
supplies from abroad, leading to delays in filling
orders
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Complete lack of state support regarding product exports to nearby countries (including members of the Commonwealth of Independent States)
The company is currently striving to find customers in Ukraine, Uzbekistan, Kazakhstan, and the Baltic states. It surpasses its competitors from Germany, Poland, the Czech Republic, and Turkey in the time it takes to fill orders (orders are executed within a week). However, customs procedures then take three weeks, nullifying the enterprise's competitive advantages. Unfortunately the city administration cannot provide effective help with such issues. To a certain extent the problems have been eased by cooperation with the firm's foreign partner, which has a better understanding of the problems than the federal government.
Results of Credit and Financial Support
Inasmuch as the main problems were caused by the shortage of circulating capital in the Fund for the Support of Small Business, the city administration focused its efforts on increasing the amount of such funds available. A total of 850,000 rubles were obtained from the Program for the Development of Obninsk as a Science City under the program component entitled “Development of the Fund for the Support of Small Business, Augmentation of Turnover Funds, and Creation of a Collateral Fund.” Owing to the increase in its assets, the fund can grant larger sums to projects and for longer periods. A competition for investment projects was held in July-August 2001, and the fund's credit committee recently selected the winning projects to be supported. The size of the loans offered this time was four times higher than in the last competition, with each of the projects selected receiving 200,000 rubles for one year.
At present the fund has assets of 700,000 rubles, which are used for operating activity. Together with additional funds from the Science City Program, the fund's total assets exceed 1.5 million rubles. With these assets, the fund serves as a guarantor for loans obtained from commercial lending institutions. Thus, a solid foundation has been established for the creation of a guarantee fund, which will facilitate the attraction of nongovernmental funds for project financing. A successful example of collaboration along these lines already exists in the form of efforts involving Sberbank.
Example
In 1998–1999, the Obninsk branch of the Kaluga division of Sberbank provided credit to the Eridan-1 Science and Technology Center, a limited liability company. Sberbank initially provided the credit for export orders. Later on (in 2000–2001), after the enterprise had established a credit history, further loans were made for the firm's innovation project
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on trace gas analyzers. The project involves developing, certifying,
and launching small-scale industrial production of new environmental
monitoring devices.
The Fund for the Support of Small Business played the deciding role in
securing approval for the first credits from Sberbank, as it served as
a guarantor for the enterprise and risked its own assets. Thanks to
these loans, Eridan-1 was able to complete the very complex and highly
technical work needed to fill six contracts with customers from South
Korea, China, Portugal, and Kyrgyzstan.
Successes
The project for production of gas-analyzing devices was
successfully completed, and a small batch of finished products was
manufactured. The characteristics of the devices are unique and the
best in the world. State product quality testing was successfully
completed, and procedures for equipment certification were
developed. The total sum of Sberbank loans was 7 million rubles,
which Eridan-1 is currently repaying.
Problems Currently Faced by the
Enterprise
Eridan-1 is encountering two main difficulties hindering the
further development of export shipments as well as efforts on the
trace gas analyzer project:
1. All loans are given for a short term, only one year. It
is very hard to carry out a lengthy innovation project
with such a short time limit.
2. The rate of interest on the loans is rather high, so
they can be repaid only if the project is very profitable.
RESULTS OF THE CITY ADMINISTRATION'S
ACTIVITIES AIMED AT SUPPORTING SMALL INNOVATIVE BUSINESSES
Successes
Thanks to the assistance of the city administration,
a diversified infrastructure for the support of
small high-tech businesses has been created in
Obninsk. The city is a cofounder of a number of
innovation infrastructure enterprises (OCST, the
Obninsk Regional Agency for the Promotion of
Investment and Technology [RAPIT], the Technopark,
the Fund for the Support of Small Business).
Judging from the experience of the Fund for the
Support of Small Business, the lack of coordination
in business support efforts represents a substantial
obstacle to the city administration in implementing
its sup
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port measures. But without this support, entrepreneurs would face
great difficulties and costly mistakes and losses in overcoming the
administrative barriers along the path from enterprise establishment
to the production of finished goods. As a result of the creation of
the RITC consortium, which united the enterprises making up the
innovation infrastructure, the problem related to lack of coordination
has been overcome.
Plans for the Obninsk City Development Program included a
package of 104 investment proposals at various stages of
preparation and implementation. These proposals formed the
basis for the creation of the city portfolio of investment
projects.
As a result of the measures taken by the city administration
to build the city's image, Obninsk has become an
attractive relocation site for small innovative businesses
based elsewhere. Enterprises are eager to be registered in
the Science City of Obninsk, thus attracting investments to
the city, keeping qualified personnel employed, augmenting
the tax base, and creating good new jobs for city residents.
Business management has improved substantially. Until
recently, many leaders of small high-tech companies lacked
knowledge and skills in business planning, despite their high
level of academic achievement. Thanks to the activities of
the city administration, the Franco-Russian Institute of
Business Administration (FRIDAS), the Fund for the Support of
Small Business, other institutions, and foreign specialists,
a number of workshops and consultations were organized and
have produced positive results.
Owing to implementation of the Program for the Development of
Obninsk as a Science City, the circulating capital of the
fund was significantly increased, making it possible to
provide increased financing for investment projects selected
on a competitive basis. The situation has been fundamentally
changed, as the main “sore point” for the Obninsk
business sector was the unavailability of loans and
investments, as revealed by the activities of the city Fund
for the Support of Small Business. Most entrepreneurs need
sums of 200,000 to 300,000 rubles for a term of more than one
year.
The initial experience of the Fund for the Support of Small
Business in working with Sberbank on loan guarantees has
shown that such activities are promising. Bankers are
favorably inclined to work with the city administration, as
its guarantees on loans carry substantial weight. In the
future the administration plans to put even greater emphasis
on attracting nongovernmental funds for loans to small
innovative companies. Plans call for the guarantee fund to
increase to 2 million rubles in the next year.
Failures
Unfortunately there has been no spark of interest among
entrepreneurs in the opportunities offered by the
Temporary Resolution on Support for Investment Activity,
despite the fact that this resolution played
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the most important role in creating favorable conditions for business
development in the city. It seems that one important reason why
entrepreneurs have viewed the resolution unenthusiastically lies in
its requirement that information about their business activities must
be open to the city authorities. Furthermore, a survey of members of
the business community has revealed that 84 percent of respondents
have never heard of the resolution, and the 15 percent who are aware
of it are rather skeptical. One-third of those questioned do not
believe that the tax benefits set forth in the resolution will be a
real incentive for business development and for the attraction of
investments to the city. By the way, such skepticism is often caused
by the lack of information about the Temporary Resolution. All in all,
many entrepreneurs are simply not aware of the business support
opportunities offered by the city administration.
The capabilities of the city administration for supporting
small business by granting tax incentives were substantially decreased
if not eliminated by the recent changes in Russian tax legislation. It
is now possible that the Temporary Resolution will not be able to play
an important role in the support of small business.
Due to a lack of funds, the city administration has been
unable to fully implement all possible types of credit and
financial support. This primarily affects start-up companies
with no liquid assets that could be used as collateral for
bank loans. To obtain instruments or equipment that could
then be sold or used as collateral, a company needs credit so
it can convert its ideas or patents into state-certified
devices, equipment, or technological processes. On the other
hand, banks have no right to lend money without collateral,
which start-up innovative companies generally lack. Thus, the
enterprise finds itself in a vicious circle.
The problem of finding available space for small innovative
companies (especially within the city limits) has not yet
been overcome. Private businesses are not eager to be placed
on state-owned property because there is no possibility for
them to buy the facility later. Meanwhile, there is a
catastrophic shortage of available municipal space in the
city. The reason for this situation lies in the fact that
Obninsk was founded as a “nuclear city,” and
almost all its territory belonged to the various state
research institutes.
PROSPECTS FOR THE DEVELOPMENT OF SMALL
INNOVATIVE BUSINESSES IN OBNINSK
Long-Range Plans of the City
Administration for the Support of Small Innovative
Businesses
These plans are defined in the Program for the Development of
Obninsk as a Science City, the entire strategy of which is of
course devoted to
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supporting innovative business. The concept of Obninsk as a science
city has been based from the beginning on the idea of promoting the
stable development of the city on the basis of high-tech resources.
Bringing the results of scientific and technological research into
fruition in the form of manufactured products will give the city a
good footing in the marketplace and help to increase revenues for the
city budget. It is this sort of innovation model at which the Program
for the Development of Obninsk as a Science City is aimed. To
implement the model, conditions are being created for the development
of high-tech enterprises as outlined in subprograms 2, 3, and 5 of the
program.
Subprogram 2 is designed to develop the innovation infrastructure, one
important element of which involves the creation of a business
incubator. During the course of this project, facilities will be
remodeled for use as office and manufacturing space by small
innovative firms on the basis of five-year leases on favorable terms.
For the first year the rent will be 50 percent of the standard
municipal price; for the second year, 70 percent; for the third year,
80 percent; and for the fourth and the fifth years, 100 percent. The
premises will be fully outfitted with everything necessary, from
office equipment to specialized machine tools—everything will be
provided as a complete package to the small innovative enterprises. A
competition for placement in the business incubator was recently
concluded, so the facility will begin operating shortly. However, the
business incubator is only the first step in the development of the
enterprise. Its further growth will inevitably be hindered by the lack
of space for hightech production facilities in the city. The empty
space at our research institutes unfortunately cannot be used, as
these facilities are federal property. The idea of launching
production under the state's “roof” does not appeal to
the managers of small innovative enterprises, as they inevitably
encounter problems with property rights that are unregulated in the
existing legislation.
Therefore, our main objective now is to build our own production
facilities, connect them with the appropriate public utility networks,
and provide enterprises with the space they need to launch high-tech
production along with the possibility of buying these facilities later
on. These goals represent the focus of our projects on creating a
technopark and a municipal industrial zone.
The technopark project calls for the construction of an industrial
complex under the auspices of the Science City Program and using
program funds. It is designed so that enterprises that have outgrown
the business incubator can lease municipal space where they can grow
to maturity. The city will own the engineering networks, utility
lines, and 1,400-square meter industrial complex at the technopark.
Space will be leased on a competitive basis to the most promising
science-intensive enterprises that have graduated from the incubator.
The enterprises that have gathered
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steam and are preparing to expand production will then move from the
technopark to the municipal industrial zone. In contrast to the
technopark, this zone will have no standing production shops—the
firms will have to construct everything they need except the public
utility lines, which will be provided as in the technopark. In general
the technopark is a component of the municipal industrial zone, which
has been assigned a 50-hectare site located around the 102-kilometer
marker on the Moscow-Kiev rail line.
Thus, there is a simple but effective chain of assistance from the
business incubator to the technopark to the municipal industrial zone.
The first one prepares the start-up enterprise, the second provides
ready production facilities after the enterprise has had some time to
get on its feet, and the third provides land for the establishment of
serial production.
PROPOSED SUPPORT ACTIVITIES
The situation in the high-tech business sector developed in such a
way that in the early 1990s, investors were attracted only by
short-term projects because of the extremely high inflation rate.
However, the innovation business requires long-term investments
with a high degree of risk. Nevertheless, high-tech production is,
at the same time, among the most profitable of all types of
business, so interest in it has increased noticeably of late. A
great number of institutions have recently been created to support
the high-tech business sector, including different agencies,
technoparks, business innovation centers, and business incubators.
Such a comprehensive innovation infrastructure provides effective
support for innovative businesses, but only in those locations
where the innovation business itself is highly
developed—namely the major scientific industrial centers,
such as Moscow, St. Petersburg, Kazan, Novosibirsk, and Samara. A
paradoxical situation has been created in Obninsk: The innovation
infrastructure is much better developed than the high-tech
production sphere this infrastructure is intended to serve. The
reason for this situation lies in the fact that opportunities for
investment support for science-intensive enterprises are much
greater in the major cities. Obninsk, like other science cities,
lacks the financial potential that would make it possible to
organize broad and systemic support for small innovative
businesses. However, in my opinion, Obninsk can serve as an example
of real attempts to organize such activity. What then is necessary
to support science cities in the development of small innovative
businesses?
Creation of a Material
Infrastructure
As mentioned previously, the quest for available space is one of
the main issues that arise in organizing the production of
high-tech goods. At
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the same time, a large amount of space is sitting empty at research
institutes. Some of this space is being rented to innovative
enterprises. However, it is understandable that the heads of these
institutes prefer renting space to highly profitable manufacturing
firms instead of innovative enterprises that face a long and difficult
stage of getting up to speed. The state system of preferential terms
for the rental of institute facilities to small innovative enterprises
could serve as a substantial stimulus to the development of high-tech
production. There is still a complete absence of federal regulations
on the rental of empty facilities by research institutes. On the other
hand, laws and regulations on the transfer of such facilities to
municipal ownership are also lacking.
After the need for finding space, the second problem for small
innovative enterprises involves the acquisition of equipment.
Purchasing equipment requires loans, which are difficult to
“work off” in the initial stage of production. Meanwhile,
equipment leasing could provide a way out of the situation. However,
Russia lacks a system for leasing machine tools, equipment, and
measuring instruments. I believe that efforts to resolve this problem
can be made at the regional level. For example, the government of
Kaluga Oblast and the Obninsk City Administration could jointly
establish an institution that would buy unused equipment from
enterprises and then lease it to small innovative companies at reduced
rates.
Investment Support
There is still no investment mechanism in our country. Our first
attempt in this regard was undertaken at the oblast level. We
presented the Kaluga Oblast Legislative Assembly with a project
calling for the oblast government to provide investment guarantees.
However, given the extremely risky nature of investments in the
innovation business, the Kaluga Oblast government refused for
understandable reasons. Moreover, private investors will not accept
the project either, even on the condition that they would own all
present and future research results of the enterprise.
Consequently, a system is needed for insuring the risks of such
investments, and this system must be under the auspices of the
federal government, as no bank would undertake to finance such
insurance.
According to international business practices, high-tech
investments are made through venture funds. The creation of such a
fund was initially proposed as part of the Science City Program.
Using venture financing, we intended to develop a mechanism for
bringing inventions to the market. This process involves scientific
research, design work, and the manufacture of test samples.
However, there is currently no law on venture financing. Meanwhile,
using our own funds by way of an experiment, we could develop a
model for the operation of such a fund, which could
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serve as the basis for the passage of a Russian law on venture
financing. Efforts to develop this model should include specialists
from the Ministry of Economics and the Ministry of Science. After all,
this is necessary for the entire country, not just our city.
Nevertheless, we are applying our own efforts to push this idea
through. We are currently planning to develop a draft resolution on
venture financing and submit it to the federal government with a
request that we be allowed to implement it in Obninsk within the
framework of our development program.
Training of Specialists
In recent years, enterprise managers have been striving to acquire
new business skills. Not long ago, businessmen refused offers to
participate in seminars and training courses with the response
“I know how to do business.” But now, business
management training services are in great demand, including
training services oriented to the needs of hightech businesses.
Businessmen have also changed their approach to staff recruitment,
with the main criterion no longer being based on family ties, but
on the educational level and skills of the employee. However,
high-quality training is costly, and as a rule, businessmen feel
the costs are unnecessary. A system for providing professional
training in high-tech business management can only be organized
with state support. Obninsk can provide an example of the efficient
organization of this kind of training. Under the auspices of the
Nuclear Cities Initiative project, a training center is currently
being created in Obninsk to train managers of hightech companies.
Established with the participation of the Obninsk Institute of
Nuclear Power Engineering, the Franco-Russian Institute of Business
Administration, and the Minatom Central Institute for the
Improvement of Professional Skills, this training center could
offer educational services to high-tech business specialists from
all the nuclear cities.
Infrastructure Support
Despite the well-developed nature of the innovation infrastructure
network, the services it offers are too expensive for the majority
of innovative start-up companies. A system is needed for providing
innovation-related services on a reduced-fee basis, including
business planning, personnel training, research management,
marketing, and patent services. At the city level, we are already
working to resolve this problem under the Science City Program.
However, a state system of support in this field is needed.
Furthermore, it is necessary to bring order to the organization and
financing of efforts to establish business incubators.
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Resolution of Intellectual Property
Issues
The intellectual property question remains unresolved at the
federal level, which means that the owners of such property are not
completely free to dispose of it as they see fit. Many of our small
innovative enterprises got their starts within the walls of
research institutes. However, the intellectual property that formed
the basis for their activities was created using federal funds.
While this question would not have been so controversial five years
ago, today the institutes are unwilling to give their research
results to private businesses. It is completely understandable that
our institutes take such a position, as they must be compensated as
organizational developers for the alienation of their intellectual
property. Meanwhile, the technology cannot be developed, improved,
or implemented without the small innovative enterprises that use
it. Consequently, the first thing that is needed is a mechanism for
providing research institutes with incentives for transferring
technologies to private businesses. Second, conditions must be
created so that intellectual property valuation is accessible to
the majority of inventors. For this purpose, the regulatory basis
for such valuations must be developed in appropriate form, and a
system for training licensed evaluators must be established.
Support for High-Tech Product Exports
Commercializing our scientific achievements in foreign markets is
of great significance in solving the problem of maintaining
Russia's enormous scientific-technical potential. To sharply
increase the export of hightech services, equipment, instruments,
licenses, and patents, scientists need favorable financial
conditions for exports. The state could provide Sberbank with the
guarantees for loans on export contracts with documentary letters
of credit. These loans would be collateral-free, as scientists do
not generally have the appropriate assets. All high-tech services
rendered to foreign customers should be exempt from the value-added
tax.
Purely bureaucratic obstacles represent an enormous hindrance in
export-related activities, with the arbitrariness and incompetence
of customs officials being especially troublesome. Customs
documentation regarding the export of instruments and equipment
should be minimized, and customs activity in general should be
strictly regulated.
Representative terms from entire chapter:
science city
