INNOVATION STRATEGIES OF STATE-OWNED ENTERPRISES IN RUSSIA National Research University «Higher School of Economics» INNOVATION STRATEGIES OF STATE-OWNED ENTERPRISES IN RUSSIA Mikhail Goland, ISSEK, HSE, Russia

Innovation strategies of state-owned enterprises 47 enterprises, that make up more than 20% of Russian GDP In accordance with the Decision of the Russian Government commission on High Technologies and Innovations (aug 2010) a number of major state-regulated companies and state-owned corporations drafted special innovative programs. Target: To boost both innovative activity of major state-owned enterprises and demand of innovative goods and services. Within these programs, the companies will develop new world-class technologies, goods and services, and innovate business processes.

Innovative strategies: main outcome of realization R&D expenses of the state-owned companies will double from 2010 till 2013 and should reach EU 11,15 bn. by 2013, including the financing from non-budgetary funds amounting to EU 4,125 bn. in 2013 (EU 1,75 bn. in 2011) The total amount for all innovative programs Is EU 36,03 bn. (EU 18,3 bn. in 2011) In 2012-2013 the productivity will grow by 16% and the energy efficiency – by 7% The companies plan to use external innovation sources – universities, technology platforms, SME. EU 500 M is allocated for R&D in universities in 2013 (EU 275 M in 2011) 46 innovation strategies Growth of R&D expenses Increase of productivity Enhancement of energy efficiency Use of external innovation sources

State-owned companies: industry sectors 1) High-tech companies, incl.: - military-industrial complex Tactical Missiles Corporation, NPO Mashinostroyenia, Uralvagonzavod - aerospace United Aircraft Corporation, Oboronprom - space technologies RSC Energia, FSUE Hrunicheva, ISS Reshetnev, SPA Energomash - shipping industry USC, SSTC, Oceanpribor, Agat, Avrora, Hydropribor - radio-electronic complex Almaz-Antei, Vega, Sozvezdie 2) Energy companies FGC UES, Rusgidro, IDGS, RAO ES of East, Irkutskenergo 3) Nuclear industry Rosatom 4) Extractive industries Rosneft’, Gazprom, Alrosa 5) Mechanical engineering Rostechnologii, AvtoVAZ 6) Service companies, incl. - transportation companies Aeroflot, Sovcomflot, SG-trans - infrastructure companies RZD, Transneft’, Rostelecom, NCSP, MCSP, Koltsovo, Rosmorport, SDS Mash, SO UPS, RCSS, Russian Post, RTRS, Oboronservice 7) Biomedical technologies and pharmaceuticals Roschemzashita, Microgen

Financing of the innovation programs (EU, M) 2011 2012 2013 ∆ 1) High-tech companies, incl.: 5494,375 6611,75 8719,925 59% - military-industrial complex 476,775 561,8 698,575 47% - aerospace 1133,475 1585,8 1574,975 39% - space technologies 1752,175 1966,275 2226,5 27% - shipping industry 1012,725 1179,575 2650,225 162% - radio-electronic complex 1119,225 1318,3 1569,675 40% 2) Energy companies 641,575 1114,625 1169,425 82% 3) Nuclear industry 538,175 725,8 875,2 63% 4) Extractive industries 2592,825 4205,3 12086,625 366% 5) Mechanical engineering 2291,75 3074,625 3365,8 6) Service companies, incl. 6684,1 7910,35 9727,6 46% - transportation companies 1325,025 1160,775 1994,775 51% - infrastructure companies 5359,075 6749,575 7732,825 44% 7) Biomedical technologies and pharmaceuticals 63,625 103,825 85,925 35% Total: 18306,425 23746,25 36030,5 97%

R&D financing (EU, M) Total: 106% 1) High-tech companies, incl.: 2010 2011 2012 2013 ∆ 1) High-tech companies, incl.: 4432,725 4809,9 5139 7089,9 60% - military-industrial complex 393,425 375,875 372,175 492,25 25% - aerospace 1018,925 1176,25 1449,975 1726,375 69% - space technologies 1567,75 1639,9 1809,3 2024,225 29% - shipping industry 859,05 1036,8 820,55 2029,425 136% - radio-electronic complex 593,575 581,075 687 817,625 38% 2) Energy companies 30,55 295,65 397,975 467,85 1431% 3) Nuclear industry 259,225 385,35 538,175 725,8 180% 4) Extractive industries 254,9 423,7 429,25 469,1 84% 5) Mechanical engineering 279 1106,775 1541,075 1756,175 529% 6) Service companies, incl. 152,425 379,525 480,625 633,875 316% - transportation companies 2,25 5,85 10,375 15,525 590% - infrastructure companies 150,175 373,675 470,25 618,35 312% 7) Biomedical technologies and pharmaceuticals 12,525 15,175 15,75 14,275 14% Total: 5421,35 7416,075 8541,85 11156,975 106%

R&D financing from non-budgetary funds (EU, M) 2010 2011 2012 2013 ∆ 1) High-tech companies, incl.: 1050,75 1138,35 1200,85 1478,825 60% - military-industrial complex 103,375 116,65 107,35 122,225 25% - aerospace 364,225 286,7 293,25 466,875 69% - space technologies 455,975 574,975 621,875 661,3 29% - shipping industry 45,125 54,6 66,325 102,65 136% - radio-electronic complex 82,05 105,425 112,05 125,8 38% 2) Energy companies 30,55 295,65 397,975 467,85 1431% 3) Nuclear industry 169,75 208,775 318,825 381,475 180% 4) Extractive industries 254,9 422,075 427,625 469,1 84% 5) Mechanical engineering 82,65 448,8 617,025 717,825 529% 6) Service companies, incl. 146,3 374,825 475,05 614,875 316% - transportation companies 2,25 5,85 10,375 15,525 590% - infrastructure companies 144,05 368,975 464,675 599,35 312% 7) Biomedical technologies and pharmaceuticals 3,675 5,925 6,05 4,05 14% Total: 1738,575 2894,4 3443,4 4134 106%

Rates of productivity growth (%) 2012 2013 ∆ 1) High-tech companies, incl.: 10,2 11,1 22,4 - military-industrial complex 8,0 8,7 17,4 - aerospace 10,3 16,1 28,1 - space technologies 17,2 5,4 23,5 - shipping industry 13,3 28,4 - radio-electronic complex 3,1 6,3 2) Energy companies 10,8 10,5 3) Nuclear industry 23,9 14,7 42,1 4) Extractive industries 2,8 4,1 7,0 5) Mechanical engineering 18,8 16,2 38,0 6) Service companies, incl. 8,2 6,7 15,4 - transportation companies 3,9 1,2 5,1 - infrastructure companies 8,8 7,4 16,9 7) Biomedical technologies and pharmaceuticals 8,4 21,4 31,6 Total: 7,8

Cooperation with universities, SMB, development institutions State-owned enterprises have the following purposes: Partnership with universities and R&D centers Establishing of corporate venture funds jointly with development institutions and external investors for SMB subsidizing Creation of spin-offs, corporate technological parks and business incubators

Financing of R&D in universities (EU, M) 2011 2012 2013 ∆ 1) High-tech companies, incl.: 45,575 56,85 74,6 64% - military-industrial complex 2,825 3,325 7,925 180% - aerospace 17,725 25 33,875 91% - space technologies 10,6 11 11,875 12% - shipping industry 3,4 5,175 6,3 85% - radio-electronic complex 12,4 14,625 33% 2) Energy companies 40,05 95,55 121,85 204% 3) Nuclear industry 10,4 18,825 29,025 179% 4) Extractive industries 14,25 31,5 33,75 137% 5) Mechanical engineering 155,175 172,875 193 24% 6) Service companies, incl. 15,675 27,775 48,575 210% - transportation companies 2,175 5,125 8,075 271% - infrastructure companies 13,5 22,675 40,5 200% Total: 281,125 403,4 500,775 78%

Recommendations on monitoring of realization of the programs Measures for the implementation of innovative development programs: Drafting of the medium-term plan of IDP Linking IDP with the investment program and financial plan Developing the IDP adjustment mechanism Linking management rewarding with the implementation of IDP Developing mechanisms of validation of data, provided by companies: Selective auditing of the implementation of PIR Involvement of interested organizations (SME associations, universities, TP) in the monitoring of IDP Monitoring of innovative development programs Monitoring of the key performance indicators Monitoring of the declared amount of financing Monitoring of the medium-term plan of realization of innovative development program Monitoring of the usage of external innovation sources by state-owned company

(Russian large business) Club of innovative directors Goals Club members (Russian large business) Growth of the role of innovative directors in making decisions about the company development Professional informal community of chief executives on innovations and R&D State-owned companies Creation of mechanisms of cooperation and coordination Examination of government initiatives and improvement of legislation Private companies(Expert400, Forbes200) Exchange of the best practices Intersectoral problems solving: standardization, employees, management, communications, etc. Supporting organizations Activities MED RF NRU “HSE” “RVC” ltd. SKOLKOVO etc. Issue-related sessions Working group sessions Special events Online forum

101000, Россия, Москва, Мясницкая ул., д. 20 Thank you! mgoland@hse.ru 101000, Россия, Москва, Мясницкая ул., д. 20 Тел.: (495) 621-7983, факс: (495) 628-7931 www.hse.ru