Russia: Advancing Innovation in the Republic of Tatarstan

July 9, 2010

MOSCOW,  Friday, July 9, 2010 - The new World Bank reportAdvancing Innovation in the Republic of Tatarstan: A Framework for Competing and Thriving in the Global Economy proposes a number of measures to ensure Tatarstan leverages its strengths by addressing a number of existing challenges to innovations. Today, the Report was launched by The World Bank in cooperation with the Government of Tatarstan.

“Tatarstan’s  strength are well known, including its e long history as an industrial powerhouse in such sectors, as helicopter, automotive and petrochemical industries,” says Jean-Louis Racine, The World Bank’s  Senior Specialist and one of the main authors of the report. “All the above-mentioned - coupled with Tatarstan’s elite universities and research work - creates a unique critical mass of assets that could be leveraged.”

The study identified several areas in which regional innovation policy could differentiate itself from Federal innovation policies, to address regional peculiarities but also to complement some of the gaps in existing Federal policies. Namely, sets of measures were provided to increase sources of innovation, to stimulate the diffusion of knowledge and innovation, and to create demand for innovation in the regional market. Policy coordination and strengthening measures were identified as a first step to implementing successful innovation support programs.

“Our successful cooperation with The World Bank on this study comes at at a critical  time when the Federal Government has clearly articulated its vision of a modern economy and all sails are set towards innovation and diversification”, stated Marat Safiullin, Minister of Economy of the Republic of Tatarstan. “We have already taken the important steps to   to turn this vision into reality. The Report provides us with practical tools to take  this work forward”, he added.

 The gap analysis showed that significant growth potential lays in the fact that the Republic is still under-exploiting its different assets. The community of decision-makers will strongly benefit from developing policies, strategies and actions that are designed to stimulate international competition. Developing structured links with international business and institutional partners could be strengthened to facilitate the integration of the Republic into the global economy.

This vision is based on the fact that Tatarstan has already highly invested in its knowledge economy and is already hosting a significant number of private and public organizations that could be reengineered to compete in international markets. This ambitious goal can be achieved if serious and continuous changes are introduced to develop a solid entrepreneurial cultural at all levels of Tatarstan’s society (including governmental agencies and civil servants). Some of these changes have already been  introduced with positive accomplishments but much more can be undertaken to move from a place with many assets to a successful story.

Three measures that Tatarstan can take to stimulate demand for innovation in enterprises are to:

  • Support technology upgrading in SMEs and large companies: Enterprises cannot innovate if they have weak technological and organizational capabilities. The final report outlines a mechanism to provide hands-on support to firms that are willing and able to grow, helping them diagnose their needs and absorb new technologies, as well as to penetrate new markets. 
  • Financing knowledge-based entrepreneurship: There is a significant gap in Russia in the public financing of R&D and innovation. The Regional innovation funding agency can help fill that gap by providing matching grants, loans and collaborative grants to enterprises on a competitive basis.
  • Cultivating start-ups: There are few technology-based start-ups in Tatartarstan and those that do exist are particularly vulnerable in their early stages of growth. A program can be developed to stimulate entrepreneurial culture, providing hands-on support to start-ups and stimulating exchange of ideas.

Moreover, two measures can help build the value added of innovation support institutions that already exist in the Republic of Tatarstan but that have yet to be fully exploited:

Establish a joint commercialization team: This is an independent team of innovation brokers who catalyze business deals between researchers and industry, at the local and global scale.

Strengthening existing support institutions: The existing technoparks and venture funds do not have the types of expertise needed to be of service to firms. Capacity building measures are required.

The disclosure of this Report, which came as a result of recently-completed World Bank’s fee-based service, fits within the World Bank’s ongoing process of opening more information to the public and testifies of the Republic of Tatarstan’s serious commitment to promoting a dialogue on innovation.