VZCZCXRO7054
RR RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHVK RUEHYG
DE RUEHMO #0970/01 1000514
ZNR UUUUU ZZH
R 090514Z APR 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 7537
INFO RUCNCIS/CIS COLLECTIVE
RUEHZN/EST COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 02 MOSCOW 000970
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: TSPL ECON EINT ETRD TNGD IR RS
SUBJECT: GOR PROMOTES "INNOVATION ECONOMY"
REF: (A) 07 MOSCOW 00645
(B) 06 MOSCOW 02255
1. (SBU) Summary: Russia continues to promote innovation as a means
to harness its scientific expertise and diversify its economy beyond
oil and gas exports. The Federation Council and Duma recently held
hearings on stimulating innovation. The GOR also promoted
innovation through sponsorship of the 8th Annual "Innovation Salon."
The GOR is directing billions of dollars to promote innovation
through "State Corporations." A key goal is to forge linkages
between research centers and the private sector and commercialize
research. End Summary.
2. (U) On February 27, the Federation Council's Education and
Science Committee convened parliamentary hearings on "Priorities in
Supporting Science and Mechanisms for Stimulating Innovation." At
the hearing, Sergei Mazurenko, Head of Federal Agency for Science
and Innovation (FASI), reported that federal funds for developing
innovation grew from 2 billion rubles (USD 86 million) in 2002 to 11
billion rubles (USD 471 million) in 2008. The GOR currently
sponsors thirteen initiatives to stimulate the development of high
technology products. The GOR has allocated over 130 billion rubles
(USD 5.5 billion) to stimulate long-term innovation in the economy.
Mazurenko plans to seek another 130 billion rubles from
non-budgetary funds to further develop the areas of nanoindustry and
energy efficiency.
3. (U) Leonid Melamed, Head of the Russian Nanotechnology
Corporation (Rosnanotech), testified at the Federation Council that
the Russian business community's attitude toward innovation and
nanotechnology is still evolving. To encourage the shift from a
resource-driven to an innovation-driven economy, Melamed advocated
the commercialization of innovation in Russia. He noted that
globally, small private companies often develop new technology. In
Russia, these enterprises are still in an embryonic stage. As a
result of the hearing, the Committee recommended that the GOR
propose new legislation on technology transfer, intellectual
property rights and greater state funding of scientific research to
stimulate innovation.
4. (SBU) On March 31, the Embassy attended the State Duma- held
hearings on "Legislative Support for the Innovative Development of
the Economy" aimed at outlining strategies for innovation. Valeriy
Komissarov, Duma IT and Communication Committee (ITCC) Chairman,
proposed introducing a special tax regime to grant favorable tax
treatment to IT companies. Ilya Ponomarev, ITCC member, noted the
disconnect in Russia between business and science. He cited a lack
of entrepreneurial traditions, weak business infrastructure and a
shortage of entrepreneurs as major hurdles facing the promotion of
innovation. Olga Uskova, President of the National Association for
Innovation and IT Development, voiced skepticism regarding the new
wave of state corporations being created by the GOR (such as
Rosnanotech.) She views these state-controlled business incubators
as vehicles for large cash transfers with grossly inadequate checks
and balances and minimal transparency.
5. (U) On March 3-6, the Embassy also attended Moscow's 8th
International Salon of Innovations and Investments. The Russian
Ministry of Education and Science, the Federal Agency for Science
and Innovation, the Duma Science and Technology Committee, the
Russian Academy of Science, the Ministry of Economic Development and
Trade and the Ministry of Telecommunications and Information
sponsored the show. The goal was to introduce Russian innovations
to international markets. Six hundred organizations from 22 Russian
regions, plus exhibitors from 16 other countries, displayed over
12,000 inventions. They came from a wide range of industries,
including nuclear, aerospace and agriculture.
6. (SBU) "Nano" was the buzzword at the show, showing up in a broad
array of products. One example was the Institute of New Carbon
Materials and Technologies (INCMT), based in Moscow. The company
produces environmentally-friendly fire-proof materials used in
building and construction. It has over one hundred patents and
claims more than 3,000 customers in Russia, the CIS, Europe, and
China. Similarly, Tomsk State University advertised its
"Nanocluster" science and education center and displayed nano
products it developed, such as fire-proof paint and ceramic
materials. There were also traditional technologies redesigned for
new applications. Zlatoust machine-building enterprise (Chelyabinsk
Oblast) displayed hospital beds manufactured to cater to the needs
of new-born babies and patients with burns.
7. (SBU) Comment: Russia's substantial science base and a
well-developed science and technology education system provide a
solid foundation for developing an innovation economy. However,
Russia's private sector, particularly in the area of small
enterprise, has lagged in investing in research and development.
The challenge for the new GOR State Corporations, like Rosnanotech,
will be to foster linkages between the research sector and the
private sector to stimulate innovation and promote
MOSCOW 00000970 002 OF 002
commercialization. The GOR's commitment of billions of dollars
behind the concept is clear; what remains to be seen is whether the
model will, in fact, work.
RUSSELL