Catch up and overtake: does Russia need to accelerate the development of innovative business

In our country, the topic of innovation development remains topical. Most experts discuss the problems and prospects of this business line. Basically, everyone agrees that innovation must be developed more actively. But the expediency of accelerated development of innovative business in Russia from the point of view of market needs is much less often questioned.

According to a study by the Economist Intelligence Unit , in Russia only 37% of the surveyed top managers cited the introduction of innovative technologies, the creation of new products and services as a priority for the company in the coming years.

Vladimir Ukolov, a professor at the MIRBIS Institute, discusses this topic:

Entrepreneurship is different: one thing when it focuses on trade, services, and quite another when it generates innovation for large-scale industrial production, which allows a technological breakthrough. Or, for example, it serves global corporations by fulfilling their orders, without which it is impossible to maintain competitive advantages and lead in international markets.

President Vladimir Putin, in his message to the Federal Assembly, stated that he considers the freedom of entrepreneurship to be "the most important economic and socially significant issue." The head of state considers the key problem of business “redundant and duplicating functions of control and supervisory bodies”.
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Vladimir Ukolov does not agree with this view:

The problem is not so much in the checks of regulatory bodies and fines, but in the fact that the rules of the game are constantly changing, and entrepreneurs are poorly informed about these changes. The next reform of the supervisory authorities, announced by the president, can turn into confusion and mistakes.

Now the share of small business in the field of industrial production, where innovation is so necessary, accounts for only 10%.

According to PwC and RVC research, last year the Russian IT venture capital market was estimated at $ 400 million. The same figure in Israel was $ 3.5 billion.

“In modern Russia, we are just beginning to return to innovative creativity through the creation of urban centers in which young people can express themselves by solving innovative problems of a production nature. For example, in the field of creating robotics and developing software products, ”writes Vladimir Ukolov.

“Europe and the United States have also developed special conditions for supporting entrepreneurship. In Europe, such a system took shape as early as the 1970s, the first business courses for schoolchildren and students appeared in Germany and the UK, as well as free advice for beginners preparing for innovative entrepreneurial activities, ”he continues.

Dan Medovnikov, director of the Innovation Management Institute at HSE , believes that the existing business development institutions created by analogy with Western models are not effective in Russia. He believes that one of the reasons is the absence of a full-fledged analogue of Silicon Valley in our country.

“The current problems of Russian entrepreneurs are rooted in low labor productivity, low return on investment compared to large-scale production,” adds Vladimir Ukolov.

“Small business is unevenly developed throughout Russia, the majority (30%) is concentrated in the Central Federal District, which includes Moscow. At the same time, an even distribution will allow a more balanced development of the real sector of the economy, as well as an increase in innovative activity around existing industrial enterprises in almost all federal districts of the country, ”he concludes.